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MediEstates - Thinking About Selling Your Dental Practice? You Need an Exit Strategy!
Thinking About Selling Your Dental Practice? You Need an Exit Strategy!

Thinking About Selling Your Dental Practice? You Need an Exit Strategy!

 

When and how to exit the business. It's a choice that almost every dental practice owner will face at some point in their career. Whether you're looking to retire, move on to a bigger or better opportunity, or take some time away from the dental world and pursue a different path, planning your exit strategy is essential to ensuring a smooth transition.

 

With many dentists expressing frustrations with the increasing pressure to deliver high-quality, cost-effective care alongside the administrative burdens of running a practice it's no wonder we're seeing an increase in the number of practice owners considering their options. The prolonged impact of COVID-19 and the current dental recruitment crisis have also put further stress on many practices, making the decision to sell and have less responsibility even more appealing.

 

Making the decision to sell your dental practice is often a difficult one. Years of hard work and dedication go into building a successful practice, and it can be extremely hard to part ways with something you have put so much time and effort into. However, if you've decided it's the right move for you, there are certain things to consider when planning an exit strategy.

 

 

Deciding on the best deal structure

 

Depending on whether you want the entirety of the proceeds right away or you're comfortable with taking payments over an extended period with the appropriate retentions and guarantees included as part of a post-sale agreement, the sale structure can vary. You may decide that you want to continue to be involved in the practice post-sale, either as a mentor to the new owner or with ongoing contractual arrangements as an associate. Alternatively, you may prefer a cut-and-dried structure that allows you to move on without any further ties to the practice.

 

 

Finding the right type of buyer

 

The type of buyer your business attracts will be dependent on its size and annual turnover. If you have a smaller practice with between 1-3 surgeries, you'll likely be looking for an individual (owner-occupier) buyer wanting an affordable entry into the dental industry. If your practice has 4 or more surgeries and an annual turnover of £750k+, then you're likely to attract larger corporate entities who may have plans to expand and acquire other practices in the area. There are, however, an increasing number of small groups and mini-corps purchasing smaller practices as part of their growth strategy. Sellers need to be aware of the implications of each type of buyer, sale structure, and post-sale agreement, to understand the relative benefits associated with each.

 

 

Another important consideration is that (depending on the type of buyer) in some cases transfer of ownership can take up to 12 months due to the various legal complexities involved. With this in mind, exit strategy planning should ideally be started before you are ready to sell to eliminate unwanted delays further down the road.

 

 

Valuing your practice correctly

 

Knowing the true value of your dental practice is an essential part of any sale process. Valuations can be complicated because there are a lot of variables to take into consideration. These include - the practice's location and patient base, its profitability, equipment and technology, future growth projections and competition in the area.

 

 

Value your dental practice with no pressure to sell

 

At MediEstates, we have over 15 years of experience as specialists in dental practice brokerage and valuation. By providing practice owners with the latest market insights, we can assist them in making well-informed decisions about the future of their businesses. We offer a bespoke, confidential valuation service, analysing factors such as day-to-day running costs, treatment types, growth potential, sustainability of goodwill, property type and location. We then compare these to benchmark figures and market sales data from our extensive database to find the true value of your practice. Our appraisals also include detailed financial forecasts and advice on maximising profitability to get the most value out of your business.

 

We fully understand the emotional and financial investments required to succeed, which is why we make it our mission to structure the best possible deal that meets the needs of individual practice owners. Whether you are looking to sell straight away or simply want to discuss the available options, MediEstates can offer free, expert advice.

 

 

Conclusion

 

Selling your dental practice is a big decision, but with the right strategy in place, it can be an opportunity to set yourself up for future success. Exiting the business doesn't have to be a stressful process - by taking the time to develop an exit strategy, find the right buyer, value your practice correctly, and know the legal obligations of selling a dental practice, you will be well on your way to ensuring a smooth transition. The team at MediEstates would be delighted to discuss your individual needs and offer our expertise in helping you to decide on the best options for your future.

 

Why not call us today to get the conversation started?

 

 

 

Posted by: Alison Bates on

General Buyer Terms 

This agreement is in relation to MediEstates Limited whose registered office is at 1st Floor, Pacific House, Stanier Way, Wyvern Business Park, Derby, DE21 6BF acting for and on behalf of our clients ("the Vendors"); and yourself (Buyer's Name) in relation for an introduction to a prospective sale of a business as a going concern. By registering through this agreement I agree to all terms set out below:

  1. Definitions
    In this Agreement the following terms and phrases shall have the following meaning unless the context otherwise requires:

    Business
    Dental Practice business providing dental care. This business is under the MediEstates Ltd sale terms.
    Confidential Information
    Means the actual Vendors identity and all confidential information in respect of the Business, including, but not limited to, any ideas, business methods, prices, accounts, finance, marketing, research, development, manpower plans, processes, market opportunities, intentions, design rights, product information, customer lists or details, employees’ details, trade secrets, computer systems and software, and other matters connected with the products or services manufactured, marketed, provided or obtained by the Vendor, and information concerning the Vendor’s relationships with actual or potential clients or customers and the needs and requirements of such clients’ or customers’ operations.
  2. Obligation of Confidentiality
    The Prospective Purchaser agrees to treat as confidential, information supplied by or on behalf of the Vendor in connection with the sale of the Business.
  3. Exclusions
    The obligation of confidentiality set out in clause 2 does not apply to:
    1. any information received from a third party who was legally free at the time of disclosure to disclose it;
    2. any information which was already lawfully in the Prospective Purchaser’s possession prior to receiving it from MediEstates Ltd on behalf of the Vendor; and
    3. any information which is in its entirety already in the public domain.
  4. Duties of Prospective Purchaser
    1. The Prospective Purchaser shall take such a reasonable security measures to protect the Confidential Information and trade secrets.
    2. The Prospective Purchaser shall not, without the prior written consent of the Vendor, permit any of the Confidential Information:
      1. to be disclosed, other than in confidence to its legal or professional advisors;
      2. to be copied or reproduced;
      3. to be commercially exploited in any way;
      4. to be used for any purpose other than in connection with the prospective purchase of the Business;
      5. MediEstates is registered under the Data Protection Act 2018. Upon Signing this agreement you agree to follow the legal obligations of this act to protect the details of the information supplied to you, with it no to be passed outside of the control of you the prospective purchaser.
    3. The Prospective Purchaser agrees to keep a record of Confidential Information received.
    4. The Prospective Purchaser will return to MediEstates or the Vendor all documents containing Confidential Information and all copies of those documents on demand at any time which are in its possession or under its control, and for this purpose the term “documents” includes computer discs and all other materials capable of storing data and information. The Prospective Purchaser agrees that such documents remain the property of the MediEstates on behalf of the Vendor.
    5. The Prospective Purchaser must not jeopardise or re-direct the sale under any circumstances.
    6. The Prospective Purchaser must not contact the Local Area Team or CCG regarding any practice sale, by any means of media unless written permission is granted from the Vendor.
    7. To carry out own due diligence on practice purchases and accepts that any information MediEstates has supplied is information provided by the vendor and is not responsible for its accuracy or completeness.
  5. This Agreement
    The existence of this Agreement and its terms are confidential and neither MediEstates nor the Purchaser may disclose anything about this Agreement or its subject matter or implementation to any person other than in confidence to their legal or professional advisers.
  6. Duties of Prospective Purchaser
    When buying Dental practices, finance is normally needed. Our organisation operated over more than one of the MediHoldings brand, by completing this from you agree that the information can be shared to our other organisations to avoid the need to register independently and provide the best possible service.

    MediEstates will refer you to the specialist dental lending team and MediFinancial who will contact the necessary banks, whom have preferential healthcare lending rates in some cases, to ascertain which funding is available to you.
    By signing this agreement you do not have to use any of the banks MediFinancial contact, it is just another service which we provide.
  7. Deposit for Dental Practice
    If you are interested in putting forward a formal offer in for a practice, once the offer is accepted there will be a deposit required to secure the practice sale which is dependant of the practice size. This deposit is held in a client account and will be returned to the buyer on completion of the practice sale. You the buyer, will be required to sign a deposit schedule which will cover the buyer and the seller in the event that the practice sale does not proceed.
  8. Changes to this Agreement
    Any changes made to this agreement must be authorised and signed by one of MediEstates Ltd Directors.
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