There has been considerable growth and demand in the dental practice market over the last few years, recognised as one of the strongest growing trading sectors, with a growth of 12.3% in 2017. The demand and interest of financial investors makes it an attractive time for a practice to join over 400 others that come to the market in the UK each year.
The marketplace is diverse, with around 12% of UK practices being owned by large Dental Body Corporates. For single site practices completion prices average at around x6 and x7 EBITDA. I’ll take a look at EBITDA in more detail a little later. For now, it’s sufficient to say that there is money to be made from selling a practice, if the process is completed in the right way.
So, is selling the best option? It’s up to the individual to answer that question. There could be several reasons why deciding to sell is a suitable option.
Retiring from dental practice
Planning for retirement from dentistry can be difficult. There is no legal requirement to stop at a certain age, so it can be tempting to simply carry on. I’ve spoken to several clients about this over the years, and produced some advice to help with the decision. The fact is that at some point, slowing down has to be a consideration. There is a choice available that involves selling the practice, often to a corporate buyer or an existing Dental associate, and continuing as an associate, in the short term. This can make transitioning to retirement a lot easier.
Selling a dental practice due to health issues and burn out
I recently read an interesting survey in the British Dental Journal which referenced the fact that “High levels of stress and burnout were found in UK dentists.”(2) There can be many reasons why this stress emerges, including high levels of regulation and fear of litigation. The fact is owning and running a dental practice can become a burden if stress has become an issue, or if other health issues are present.
Quality of life is important, and for anyone who is suffering from ill-health or burnout, selling the practice, and moving on to something new, may be a good idea.
The burden of legislation and the CQC
I’ve already touched on the fact that legislative considerations are becoming more of a burden in the world of dentistry. The constant number of regulatory changes, especially involving the CQC, are causing many people to feel as though they do not have enough time to concentrate on actually being a dentist. Escaping from these pressures can be reason enough to sell.
Selling a dental practice to relocate
Selling can simply be a practical consideration, if a dental professional is looking to relocate. This can involve moving to an area of the country where profits are likely to increase, or moving abroad. Either way, the money from the sale comes in useful.
Changing career direction
It’s a fact that less people are choosing dentistry as a career. You can take a look at more information about this. There are many pressures in the world of dentistry which are undoubtedly a contributing factor and which can also contribute to many current dentists looking for a change of career, and selling a practice as a result. With the future of the NHS so uncertain, many dental professionals are selling up and looking to invest their money elsewhere.
If one or more of these circumstances apply, it may be time to think about selling. However, it’s not a decision that should ever be taken lightly, and the timing of the sale also needs to be considered.