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Samera Business Advisors
Samera Business Advisors
Samera Business Advisors are leading UK Dental Business Advisors. On this blog, we share our tips, ideas and expertise to our readers across the UK and beyond. This blog is a must-read for dentists seeking to buy, build, or sell a dental practice.
Blog By:
Arun Mehra
Arun Mehra

5 Quick Tips when Buying a Dental Practice

10/18/2023 4:43:04 AM   |   Comments: 0   |   Views: 65
You also need to think about your personal and business finances.

Have a look at your financial track record, and how you have managed your personal finances e.g. do you have high credit card balances? Have you demonstrated an ability to save?

How strong are your associate accounts, would they be strong enough to demonstrate that you can cover the workloads and UDAs at the target practice?

If you can show evidence of timely payments of debts, the ability to prepare cashflows, and a good understanding of accountancy, you become a much safer bet in the bank’s eyes.

Find the Right Practice
It may sound obvious, but it’s worth pointing out that you need to make sure you are buying the right practice for your vision, goals, and personal situation.

As the saying goes – location, location, location. Yes, a glamorous and famous street in Central London might have been your dream, but is it realistic, is it affordable, is it practical? Maybe you’ve always dreamed of setting up a shop in the small village you grew up in, but is there enough demand to warrant it?

You may need to move further than you planned or maybe even to somewhere you’ve never heard of. Don’t rule anywhere out and make sure you consider the entire nation. There are some great practices out there!
Think about what services you want to provide too. NHS contracts might guarantee income, but they have their own drawbacks as well. Private dentistry requires a lot more effort in terms of marketing, but the financial rewards are potentially far greater.
It’s essential that you do your own market and demographic research before you buy any practice. What services does the area want? What kind of patients are you going to be attracting? Are there more families or young professionals locally?
Make sure you’re getting the right price for your new practice. Don’t pay over the odds because the practice has room to grow. Only pay exactly what the practice is worth.
There are many factors that you will need to consider when purchasing a dental practice and it can be difficult when you have finished a long day in the practice.


Be Diligent with Due Diligence

The due diligence is one of the most important steps when buying a dental practice. The better the due diligence, the more equipped you will be as a buyer to make an informed decision.

Remember that the selling agents will make the practice seem like the best option on the market. It’s the job of due diligence to figure out how much of that is true and to discover any issues or potential problems that you need to be aware of.

In most cases, you are purchasing the goodwill of the business and this may have been undertaken by associates. Does the practice have a detailed drafted agreement in place with their associates?

Is the Practice Lease term as expected?  Banks usually match the lease term to the loan term. If the lease only has 2 years remaining, then the loan term will normally be for 2 years.

Leave no stone unturned and make sure everything is examined in microscopic detail. You cannot put enough time and effort into the due diligence!

There are so many different aspects that make up a business such as finances and accounts, staffing contracts, property agreements etc. It is essential that each one of them is examined in detail so you have the clearest picture possible of the business you are purchasing.

You can read more about due diligence when buying a practice here.

Hire a Specialist Dental Solicitor

Therefore, a good specialist healthcare solicitor is vital when buying a dental practice. Make sure your solicitor has specific knowledge and experience in the UK’s dental sector!

The healthcare sector has many nuances that are very sector-specific and you will need a solicitor with experience within this sector to make sure that they are dealt with correctly.

For example, if your solicitor has not completed the CQC and NHS contract transfer correctly then this can delay the practice purchase and may even result in you losing the practice.

The NHS requires a certain timeframe in which to complete a transaction. For instance, they usually want notice within 28 days of the first of the month. If your solicitor is not aware of the notice periods and the particular days that the NHS want notices served, this could put your purchase at risk, or at least delay it.

Listen to our podcast with Kate Ford from Rudlings Wakelam Solicitors discussing the legal pitfalls of buying a dental practice.
Category: Financial Planning and Investments
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