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MediEstates - Why Selling Your Dental Practice Now Could Be Your Best Decision
Why Selling Your Dental Practice Now Could Be Your Best Decision

Why Selling Your Dental Practice Now Could Be Your Best Decision

 

 

We all know that times change, and the dental market is a prime example of this. The last two years have seen unprecedented challenges for dental professionals, with the Covid-19 pandemic creating added pressure. With the many changes to how dentists are able to operate their businesses, these last couple of years will no doubt be remembered as some of the most challenging in the history of the profession.

 

Although lockdowns are now thankfully over, dentists are still subject to a significantly higher amount of regulations than ever before - from the requirements for more stringent hygiene protocols and restrictions on the number of patients that can be seen on a daily basis. Such regulations are likely to continue for the foreseeable future.

 

 

Increased Costs and an Uncertain Future

 

The cost burden of these new regulations only adds to the already high cost of running a dental practice. Dentists have had to adopt new technologies, update their equipment and hire additional staff to meet these demands and obligations. In addition to these challenges comes a lot of uncertainty about the future. This has led many dentists to reconsider their business model and; whether they can continue providing high-quality dental care at a sustainable profit.

 

The uncertainty and change have prompted some dentists to consider their options and explore whether now might be a good time to sell their dental practice. If you are feeling overwhelmed by these changes and unsure about what the future may hold for you and your dental career, selling your dental practice may be a good option for you. When done correctly and at the right time, it can provide you with the financial security you need to retire or transition into another career.

 

 

Is Now The Right Time to Sell Your Dental Practice?

 

When it comes to selling a dental practice, timing is everything. Sell too early, and you may not get the best return on your investment - sell too late, and you may miss out on the current high demand.

 

Selling your dental practice is a big decision. It’s typically not something that dentists think about often, but if it is something you have been considering, there are many reasons why now may be the optimum time to do so.

 

In this blog post, we will explore the top six reasons why selling your dental practice now could be the best decision you ever make.

  

 

1. Goodwill Values are at an all-time high

 

One of the main reasons why now could be a great time to sell your dental practice is because goodwill values are at an all-time high. This increased demand for Private, Mixed and NHS practices is due to demand exceeding supply.

Sellers can capitalise on this high level of goodwill by commanding a higher price and being able to negotiate a better deal.

 

2. The market multiples being paid have never been higher

 

Dental practice valuations are calculated by using financials, practice information, operation information, patient numbers and types, plus any assets that are included as part of the sale. Industry multiples are then applied to these figures to establish a sale price. The dental practice market is red hot right now with high multiples being paid for practices. Sellers can therefore be confident that they are receiving a maximum price for their hard work and investment in the business. Reports from various industry sources, all point to a trend of increasing prices being paid for NHS, Mixed and Private dental practices.

  

3. Get out now while it’s a seller's market

 

The current market conditions make it a seller's market, which means you can be assured of achieving a good price for your practice. Sellers are in the driver’s seat and can command a higher price than they could have even a year ago. The longer you wait, the bigger the risk that market conditions could change and reduce your potential selling price. Sell now while the market is still strong.

 

4. More buyers registered than ever before

 

Over the past year, more buyers registered to acquire dental practices than ever. Demand is significantly higher than supply in most areas. Remember also; it is not only private buyers interested in purchasing dental practices but also corporate dental groups whose main aim is growth by acquisition. Sellers looking to exit their practice for more flexibility or retirement can take advantage of this heightened interest and maximise their selling price.

 

 

5. NHS contract is posing more pressure on dental practices

To add to the burden of the last two years and all its effects, dentists in England have now to deal with an NHS contract which has been described by many as onerous. The key areas of concern are that practices will be penalised if they fail to meet the newly set targets of 85% of pre-Covid activity levels targets. For many smaller practices, this is simply unachievable.

In a recent survey commissioned by the BDA, more than 40% of NHS dentists have signalled an intention to pursue early retirement or a career change due to the current pressures imposed on dental practices by the NHS contract.

 

 

6. If you are having the best year in revenue, it means you will have the best valuation

 

If your dental practice is doing well and you have seen an increase in patients, your practice is likely becoming more valuable. Sellers who can demonstrate a pattern of growth and increasing revenues are typically rewarded with a higher valuation. So if your revenue this year is the best it has ever been, you can be sure that your dental practice is worth more now than ever before.

 

If your revenue is not at its peak; but is growing steadily and in line with what other similar dental practices are achieving, there should be no worry about any impact on value or saleability either.

 

 

Conclusion

 

All these factors mean that now could be an excellent time to sell your dental practice if you are looking for a quick and profitable sale.

 

If you are considering selling your dental practice, it is important to get a valuation from a qualified and experienced company. If you would like to know more about dental practice valuations or how to go about selling your dental practice, please contact us for a free consultation. We will be happy to answer any questions you may have.


Posted by: Dean Barker 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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