Selling a Practice FAQs

How do I value my dental practice?

If you want to know how to value a dental practice, you need to know firstly that every single practice is unique, and every single dental practice has a range, where a lower range and a higher range. This will be determined by of course, the financial accounts, so we always ask for at least the last 3 years sets of accounts, and the most up to date management accounts.

Alongside, we create a comprehensive and time-effective kind of questionnaire with a visit of the dental practice where we also analyse and discuss with you in potential, we will create together a valuation report where you will understand the exact market value of your dental practice. If you are selling a practice and want to know what it is worth, please do get in touch.

How long does selling a practice take?

The length of time that it takes for selling a dental practice in the UK last year, 2016, was 5 and a half months from beginning to end. From the initial inquiry to the completion of the deal. Obviously, in the length of time, it varies depending on the type of practice that you’re selling. However, on average at the moment, up to the end of last year, 2016, the length of time is 5 and a half months.

How do I maximise the value of my practice?

In order to maximize the value of your dental practice, you need to know that every single dental practice has a price range. In order to maximize the price, the first and most important thing to do is to value the practice properly according to market value. Generating a loss of interest, creating a successful and strategic marketing campaign.

We at Samera Practice Sales, we have a huge database of active registered buyers. Most importantly, we have a personable and sustainable relationship with our buyers that keep coming back and buying practices from us. We had a very successful year last year. We sold all valued in excess of £100 million worth of practices, with most of the practices achieving above asking price. If you are selling a practice and want to know how to maximize its value, please do get in touch.

What do I need to sell my practice

If you are selling a practice, there are a few documents and contracts that you should have prepared for any potential buyers to look at. For example, any buyers would want to have visibility of their last 2 years sets of accounts, the latest 12 months of management account. Also, make sure that if you have a verbal agreement with any of your support staff, do make sure that this agreements are documented and written down in a contract, so that any potential buyer will continue to pay and remunerate your staff as you are.

Most importantly, if you are thinking of selling a practice, perhaps you should think that if you were a buyer, what would you want to know about your practice? This is always a good question to ask yourself alongside the reason for selling your practice. If you want to know more about what documents and what contracts should be prepared ahead of selling a practice, please do get in touch.

Why do some buyers choose to pay over a deferred period?

A deferred payment on a dental practice sales completion is when part of the agreed price is paid over billable time over a number of years. That is always subject to either target for personal target achieved in terms of income, or practice turnover. We see more and more a deferred payment applied to some of the deals completed over the years.

This is usually done by some corporates and often some individual buyers where they think that there might be an element of risk associated with the full price. They might want to protect themselves by applying for the deferred payment. If you want to know if your practice qualifies for deferred payment, or it might be subject to a deferred payment negotiation, and how to 01:06 terms when negotiating a deferred payment, please do get in touch.

Should I get a practice evaluated when selling to an associate?

If you’re thinking about selling a practice, and even if you’re thinking about selling to your associate, you should always have a valuation carried out of your practice. Imagine if you’re selling a practice to your associate, and perhaps you decide to stay and work together for a number of years. You perhaps sell below market value, and you realize a year or two year later 0:34 above market value then clearly, it’s going to create some animosity with you and your associate.

But even if you don’t decide to stay, it’s always advisable to achieve the best price, the best available price, and the best deal structure. If you want to know what your practice is worth and if you want any support in how to negotiate with your product associate, please do get in touch.

Why should I use a broker for selling my practice?

A broker will help you to achieve the best price and the best possible deal structure available on the market by engaging with as many buyers as possible to create a loss of interest and examine about the practice you’re thinking of selling.

Why should I use Samera as my broker?

We at Samera Practice Sales had a fantastic year last year with sales and valuations of dental practices worth in excess of £100 million. We have a huge database of active registered buyers, corporate buyers or an individual buyer looking to purchase a practice. Most importantly, we have a personable and sustainable relationship with all of our buyers. We always match the right buyer with the right practice for the best price and for the best deal structure available in the market. We work on success. Your success is our success.

What is EBITDA?

EBITDA is earnings before interest, taxation, depreciation, amortization. It’s a standard way of determining profit. It’s one of the variables that are used when we evaluate practices.

What should I consider when buying a corporate practice?

I think you should consider buying an ex-corporate practice. With corporates, they always have a good marketing strategy, they are usually very CQC compliant. They’re great with their policies and procedures. They really know how to run a day to day dental practice. The cons that you should consider is why are they selling their practice in the first place? Consider it just might not fit in their strategy or there might be other reasons, and that’s something we could help you with to see whether this purchase would be suitable for your needs.

What do I do with my equipment still leased?

If all or part of your equipment is leased you could either transfer the arrangements to the buyer, if they are in agreement or paying it off, which is usually most buyers preferred choice.

What are the legal warranties?

Most solicitors acting on behalf of their clients as buyers will advise their client to include in the Standard Purchase Agreement ( SPA ) document, a warrant from you as a seller that all information provided including any financial and contractual aspect of the practice is true and accurate.
On the other hand, the seller’s solicitors should negotiate and deal with the warranties in a way that protects the vendor and minimise their risks against potential claims in the future.

Will the dental sales process trigger a new CQC inspection?

The Care Quality Commission is another potential reason for a delay in practice sale, even sometimes 3 months delays if either the buyer or the seller don’t have their DBS check ready and available to submit, or the practice has not been inspected lately.

The process of selling a practice will involve deregistration of the seller and registration of the buyer to work at the practice, and this process will likely trigger a new CQC inspection unless one was carried out recently. So have everything ready and DBS not older than 6 months when planning to sell a practice.

Do I need to have all my certificates ready and available?

During the due diligence process, you will be asked to provide and show your certificates such as the GDC registration for you and your qualified staff, professional indemnity insurance, employer’s liability cover, autoclaves, compressors and X-Rays.

Have all those ready and it will save you time when selling a practice.

What if I have a lease on the property?

If there is a lease on the property and the lease is less than 15 years to the expiry date, it is advisable to talk to your landlord about a potential extension and engage the landlord at an early stage.

Any buyer would want at least 15 years lease or more if possible and the likelihood is that the landlord would ask for his legal costs to be covered.

What if I own the property?

The options are either selling the property or have a lease in place with the buyer. If you are selling to a Corporate you should know that the property aspect of the deal is not their main interest, however, they may acquire your property if you wish to sell it. The property will be valued as a commercial property and not on a residential basis so this is a point to consider when thinking about selling or not.

What issues do you come across when selling a practice?

We have never encountered an issue that we cannot resolve.

No practice is the same but we have never encountered an issue that we cannot resolve, sometimes it just takes a little longer. Any problems usually come to light at the due diligence stage when all documents are thoroughly inspected.

What is the sales process of a dental practice?

We like to simplify the process to 8 major steps.

Initial enquiry – The vendor sends the completed data collection form to Samera and initial discussion with our team takes place.

Valuation and practice visit – This is when we confirm the key variables and arrange a visit at the practice and our report is discussed with the vendor(s). Phase one of Samera marketing process is explained and begins straight after the meeting.

Viewings – Phase 2 of Samera marketing process consists of appointments making with potential buyers already been screened and viewings.

Offer stage – We negotiate the best financial package and best terms, then Heads of Terms are negotiated and agreed.

Due diligence – Key information and documents are reviewed by legal teams.

Ongoing Support – We are there at every step of the way, supporting sellers during the financial and legal due diligence for a smooth completion.

Completion – Sales and transfer of funds to the vendor’s bank account.

When should I inform my staff of the sale?

Selling a dental practice is a very emotional and challenging time in any dental owner’s life.

Informing your staff is a crucial step in the dental sales process and this must be done at the appropriate time.

If the timing is wrong, it could create unnecessary stress and uncertainty amongst your loyal and faithful staff, and what if the sales are not completed? The risk is ending up with creating disruption and loss of trust and loss of revenue and more costs.

Your solicitor will be able to advise you when the right time to inform your staff of the sale.

What if I have an NHS contract?

If your contract is time-limited (PDS ) instead of open-ended (GDS) it may be worth considering a conversion as a GDS contract (if possible) may attract more buyers. There are risks when converting the contracts so it is always advisable to seek legal and financial experts support.

Regarding the sale of the dental practice with the NHS contracts, there will be 28 days’ notice between exchange and completion to add to the NHS element of the deal.

Do I need to prepare an inventory?

Yes most certainly so, it takes some time and is boring but it will create clarity with regards to the items you are leaving at the practice and the items you are taking with you, also it will avoid any potential arguments and dispute further down the dental sales process.

What do I do after selling my practice?

Consider accurately life after selling your practice, and make plans ahead of marketing the practice.

Whether you are retiring or want to cash in, or want to continue working in the practice or wish to set up a new practice, consider your options prior marketing your practice, and talk to a professional advisor who has helped others make the best choice before.

Do I need a specialist dental lawyer?

Never consider the services of a solicitor or a firm with no experience with dental practice sales.

It’s that simple, but occasionally we have experienced some dental principals going down the route of a solicitor who may be brilliant dealing with selling houses but could slow down the process of selling a practice.

Using an expert dental solicitor will ensure you get the right advice at the right time within budget.

What is due diligence?

Due diligence is a very important exercise carried out during any dental sales and acquisitions process.

It is divided into legal and financial due diligence. It is an exercise to confirm that all information provided at the time of discussing and agreeing on offers is accurate and precise. Information such as accounts, management accounts, patient numbers, staff contracts, NHS contracts and any legal issues such as change of control clauses, lease and property contracts, just to name a few of the documents are usually checked at this stage. An expert legal and financial team will know what to look for in a professional and time-effective way.

What is EBITDA?

Earnings before interest, tax, depreciation and amortisation.

EBITDA is essentially the true operating profit of the practice, it’s the number that you see after deducting the running costs from the gross profit. It can vary and it can be adjusted as each business owner could have different costs and different way of running a business. It is commonly used in valuing a dental practice.

Selling a Practice with Samera

For help with selling a practice, contact Samera today! We can make sure you get the best value for your dental practice.

If you want to learn more about selling a practice, check out our Learning Center here.

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