Life in a dental practice and for the rest of society still remains unrecognisable from the pre-pandemic day-to-day. As restrictions lift resilient business owners will be turning their thoughts to ‘what next’.
For some the burden of the additional PPE requirements and the added personal risk of continuing in a public facing role will be too much. According to a recent survey, the British Dental Associate has reported that pandemic restrictions are taking a terrible toll on the dental workforce. Nearly half (47%) of dentists indicate they are now likely to change career or seek early retirement in the next 12 months should current COVID guidance remain in place. The same proportion state they are likely to reduce their NHS commitment.
Job vacancies are predicted by many to soar and advertisements for associate roles are remaining unfilled for longer. It would be unsurprising if the profession sees higher than average numbers wanting to take either an early retirement or wishing to retrain to qualify into another profession. Recruiting replacement dentists is also likely to be impacted by fewer European migrants in the market for a new position following Brexit. Maintaining a full staff for a practice has been difficult for many and is expected to continue to be difficult whilst the FFP3 equipment is required in surgery.
However, whilst for many, life in a dental practice is too much, for others the opportunities are bountiful.
The country is expecting to see increasing NHS waiting lists, the longest in history. This is already showing in NHS dental practices. Further, the public perception of the importance of health and wellbeing will be at an all-time high. The combination of these factors is an opportunity for the entrepreneurial dentist.
Whilst it is acknowledged that practices will face issues with recruitment, the current market conditions across much of the UK will allow practices to expand. Private dental offerings can bring new income to practices that have the physical space to expand. Secondary sites might be considered for those concerned about capacity in their current location.
Banks are less hesitant to fund expansion than they have historically been for practices looking to set up a squat second site. Brabners are also seeing many existing clients looking for practice acquisitions with a view to establishing a group of small practices. Large corporate groups are also bidding against each other for practices appropriate for their financial models.
The dental market continues to operate in a highly fragmented market, despite consolidation in recent years, with only a relatively low percentage of practices owned by corporate operators. Christie & Co's latest Dental Market Review 2020/21 report described the opportunities for further consolidation, stating that "Corporate consolidation continued in 2020, from the previous year as private equity backed dental platforms and established corporates competed for quality practices with frenetic bidding for the larger businesses and premium prices achieved in the lower price ranges the independents were equally active as small groups and single independents expanded rapidly, buoyed by strong trading conditions and the availability of quick cheap finance."
It is correct to say that there have been significant concerns that the end of financial support (such as the furlough scheme) across UK business may result in a significant number of insolvent businesses, with distress sales becoming more common. However, at this stage this is not yet a trend that we are experiencing. On the contrary we have clients reporting record profit levels and considering re-pricing practices part way through the business sale process due to increased profitability of the business. The next year might be a mixed bag between the two as support is withdrawn further.
On the whole the dental team at Brabners are experiencing enthusiasm both from buyers and banks. The enthusiasm on the whole stems from those who recognise opportunities for health care providers which will undoubtedly arise following on from the largest global health crisis in living memory.
If sales, acquisitions or expansion is something you have been considering our Dental team would be happy to discuss your options with you.
