Mistakes to avoid
There are several factors to consider when preparing a dental practice for sale. It is important to understand how not to sell your dental practice.
There are frequent mistakes that sellers make that can compromise the sale of their dental practices.
How NOT to sell your dental practice
The first thing to do is to make plans in advance if you are considering selling your practice.
There are, of course, certain situations when the sellers may have to sell quickly due to family or health issues, but failing to think in advance and plan will certainly have an impact on the attractiveness of the practice when it comes to the market.
For example, specialist dentists not willing to commit to helping the new buyers with a transitional period of a handover of patients for a limited period of time will certainly attract fewer buyers than if they are willing to stay at the practice post completion in order to guarantee a continuation of patients care.
Informing your staff too early
When the terms are agreed between sellers and buyers, sellers often feel the need to communicate with their staff and patients that they are selling.
Although this decision is down to the seller's discretion, we would always advise continuing as business as usual until exchange of contracts has taken place, as informing staff too early can cause unnecessary uncertainty and disruption, and can possibly lead to some staff feeling upset or leaving.
Using the services of general accountants instead of specialist dental accountants.
This point follows on from the previous point about planning and is linked to failing to plan the exit. Any buyer looking to buy any practice will want to have visibility of at least the last 3 years sets of accounts, and these need to be presented in a very clear and simple way.
Specialist accountants are available to plan and prepare their accounts with their clients who are ready to sell. They can assist in restructuring the accounts in the best possible way so that the last 3 years that any buyers will look at, will give the best possible picture of the practice.
Presenting the figures in the best possible way will speed up the process and will minimise the number of questions that any buyer could ask.
Failing to have a long lease in place
One of the most common reasons for a delay in practice sales comes from issues arising from the property lease.
In certain cases, when the Standard Purchase Agreement is ready, and buyers and sellers are in agreement on all points and terms, the delay of deal completion comes from the landlord or their representative.
The landlord is the third party, and their timetable and urgency may differ from that of the seller or buyer.
Ideally, if selling a dental practice that has a lease on the property, it is advisable to either have a long lease in place of at least 9-10 years or to engage with the landlord early on in the process to explain that you will be selling soon.
Last Minute CQC application
The CQC application is another potential reason for a delay in dental practice sales, which can sometimes result in up to 3 months delay 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 within the last 12 months.
The process of selling the dental practice involves de-registration 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 we always advise having everything ready and a valid and recent DBS that is not older than 6 months when planning to sell.
Never sell without professional help
When thinking about selling your dental practice, it is imperative to surround yourself with a professional team.
Carefully select your accountants, lawyer and selling agent.
We always advise clients that as soon as the Heads of Terms document has been agreed, a date is secured between the buyer, seller, lawyers, agents and lenders.
Every deal is different and clear communication is important to achieve a successful completion.
Having a great team working together will ultimately achieve success.