As the government begins the process of reforming NHS dentistry, some practice-owners may be thinking about selling their business. However, there are several key issues to consider as you prepare to make a sale.
Build your team of experts
Selling a dental practice is not something you will do by yourself. As a dentist selling a practice is not your day job. However, it is the day job of many experts in this area. Solicitors, accountants and brokers who are experienced in the sale of dental practices will make sure the process runs smoothly and take a significant element of the pressure off you.
Ensuring that you have a team of professionals on board that you can trust to guide you through the process is essential.
Your own accountant should be advised of the potential sale at an early stage and a broker and solicitor can be appointed even before a buyer is found. A solicitor can act only for a buyer or a seller on a particular deal so appointing your team early means that you get the pick of the experts.
Know what is expected for due diligence
Dealing with the requests for due diligence is one of the most time intensive parts of a practice sale. A buyer will raise what seem to be extensive enquiries about the business. This covers a long list of issues, such as ensuring that appropriate x-ray testing has been carried out, or asking for proof of indemnity insurance for associates.
Dentists may find it hard to find the time to collate these documents, particularly when they have a full clinical diary.
Practice managers may be helpful in collating the documents but many dentists do not wish the staff to be advised of the sale until there is a binding deal as they are concerned about the disruption to the business this might cause if the sale does not proceed.
It is correct to say that most specialist dental lawyers have a similar set of enquiries and even before a buyer is found you can start to collate the documents that are likely to be needed.
Ensure that you have taken good valuation advice
There are many specialist dental brokers in the UK. Each broker may use a slightly different system for valuing the practice.
Your accountant can also help to prepare the business for sale as a valuation is likely to be based on a profits within the business. If you are considering a sale into the future, some efficiencies within the business at an early stage can make a significant difference to the price the business can achieve.
Prepare your staff
If you sell the goodwill of your business your staff will transfer to the buyer by way of a the Transfer of Undertakings (Protection of Employees) Regulations. This requires you to consult with the staff about the sale at the earliest possible opportunity.
Different views are taken as to what the earliest possible opportunity is, but many will wait until exchange of contracts when the deal is binding upon both parties.
The sale may be conditional upon key members of staff remaining in the business following the sale and in those instances it is important to ensure that staff are gently eased into the idea of a new owner.
Self employed associates and hygienists do not automatically transfer to a buyer under the regulations. However, in most circumstances you will breach your obligation to an associate if you terminate their agreement with no notice.
Prepare yourself
For many of our clients the sale of a dental practice marks the end of a long career in dentistry. It can be an emotional time.
We often find clients who have sold wishing to return to the business or becoming upset if the buyer makes changes to day to day running of a practice. This applies whether the business seller is actually still working in the business or not.
It is important to prepare yourself for this change and to leave what may have been your life’s work in the hands of another.
