Top tips for selling your dental practice
Martyn Bradshaw, of top dental practice brokerage PFM Dental, gives his top tips when getting ready to sell your dental practice
1. Valuation
Regardless of whether someone is selling on the open market or simply selling to their associate, I always suggest that they instruct a valuation from a reputable valuer. This is the time to ensure that you get the pricing right and take advice from someone who deals with dental practice sales on a daily basis. Valuers like us will happily undertake a valuation for clients as a stand-alone service.
2. Identify Buyer Types
When getting a practice ready to market, understanding who your practice will be suitable for, and therefore the likely buyers, will ensure that you or your agent are targeting the correct buyer type. The practice should be analysed both under an associate-led and principal-led model – determining the suitability of corporate vs principal buyer. A good agent or valuer will be able to discuss and advise accordingly.
3. Suitable agent
Using a specialist dental practice sales agent should cover the related agency cost multiple times over. Most agents will have thousands of dentists looking for dental practices and can therefore reach a wide audience of potential buyers. As well as helping to achieve the best price, having a choice of multiple buyers also allows you to choose the right fit for your practice. The agent should also deal with the sale from marketing all the way through to completion, making sure that the sale stays on track and resolving any issues.
4. Solicitor
Similar to having a specialist agent if you are selling on the open market, there are a number of good, specialist dental solicitors. Within the sale agreement a vendor will provide indemnities and warranties, and it is the responsibility of your solicitor to minimise the risk of these. A non-specialist solicitor is not likely to know what is expected or overkill.
5. Get Organised
The legal work involved in a dental practice sale is certainly getting more onerous, and we see that the majority of the time spent is actually on the ‘due diligence’ – the information that a buyer’s solicitor is asking about the practice. The more prepared you are the better. If you are coming up to selling your practice, starting to keep documents to hand will make the process significantly easier.
6. Think Tax
While getting the best price for the practice is the key driver for most people, the way in which the deal is drawn up can affect your tax liability. The most important thing for you is the net proceeds from the sale. There is no point in getting an extra £20,000 if you don’t take good tax planning advice and spend an extra £30,000 in tax. Your accountants should be informed of the sale at your earliest opportunity. An agency such as PFM Dental will liaise with your accountant to assist where possible.
7. Timescales
Ensure that you are thinking about the sale of the practice early enough. If you are looking to sell to a dentist who is going to take over from you then you need to leave enough time to find a buyer and go through the legal work. If you have a large practice and are looking to sell to a corporate, not only will you have the time to get to completion but will likely have a tie-in afterwards. Again, if you are unsure, a good valuer or agent will be talking through the timing to ensure that you don’t start the process too late for your circumstances. Many dentists wishing to sell will instruct a valuation around one to two years before they wish to sell.
8. Conclusion
A well-considered plan for selling your practice should never be underestimated. Start early, have a valuation of the practice and work with a valuer and agent to determine your likely timescales. When you are ready, make sure you have a suitable team around you (specialist agent, solicitor and accountant) to ensure that the sale goes through as smoothly and efficiently as possible.
Author
Martyn Bradshaw is a Director of PFM Dental and undertakes hundreds of valuations every year. With more than two decades of experience, Martyn understands the intricacies of dental practice sales to corporates, private buyers, partners and associates alike. His days are spent valuing and dealing with the sales of dental practices.
PFM Dental is one of the leading dental sales agencies in Scotland.
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