With current affairs very much focused on possible rises in interest rates and other mounting costs, Paul Graham explores how the dental market may be affected in the coming months.
Earlier this year, the Royal Institution of Chartered Surveyors (RICS) reported that rising interest rates and the cost of living will affect the UK commercial market.
With this in mind, it seems prudent to consider how the dental sector is likely to be impacted. But also what it may mean for those looking to sell or buy a dental practice.
The good news is that dentistry, with its needs-driven nature, is robust when it comes to economic fluctuations. So, despite current economic headwinds and operational challenges, demand amongst buyers remains at an all-time high.
No small part of this confidence is a result of the forensic due diligence process that is typically carried out by a buyer’s team of experts to ascertain whether the business is viable and sustainable under new ownership.
I anticipate an even more microscopic approach going forward. This has already evolved significantly as a result of the pandemic.
It shouldn’t come as too much of a surprise or be too challenging, therefore – as long as a seller has taken the correct steps, and aligns themselves with a specialist dental broker, someone who is RICS-regulated, and is experienced in selling dental practices.
What about timing?
Daily, hard-hitting headlines regarding the economic state of the UK can understandably knock confidence. But those with entrepreneurial spirt often look beyond the noise.
Sellers and buyers could easily fall into the trap of thinking this is a bad time to make big changes. However, the truth is that there is no textbook ‘perfect’ time to buy or sell. It’s more a case of assessing the market, the opportunity, and personal objectives. But also, importantly, the supply and demands at that particular time.
Allowing time to process so your dental broker can assess every aspect of the business is vital. This is an opportunity for the broker to understand the business and opportunity ahead of a potential sale.
It will also identify any possible hurdles and actions to be taken to ensure the best possible outcome is achieved.
A new perspective
Within all the moving parts of the sales and purchase process, we are always looking to see what’s hot or on the horizon in the dental sector market.
Being eco-responsible is an issue close to many people’s hearts. It has started to be embraced by the dental sector without reservation. For example, the British Dental Association (BDA) states: ‘The NHS has announced its vision to enable a Net Zero NHS by 2040, and an ambition to reach an 80% reduction of emissions directly under NHS control by 2028 to 2032. Many private practitioners have expressed an interest in reduction of emissions.’
No one can afford to overlook green issues. There are a number of factors that can affect a practice’s environmental impact, as highlighted by the Centre for Sustainable Healthcare’s how-to guide, which the BDA contributed to (available at www.sustainablehealthcare.org.uk/dental-guide), including:
- Travel
- Equipment and supplies
- Energy
- Waste
- Biodiversity and green space
- Measuring and embedding sustainability
- Webinars.
These are the kinds of topics that up-and-coming buyers may well have on a non-negotiable list of what they are looking for in their new practice.
Carbon efficiency, for instance, is now embedded in the psyche of younger generations. This kind of efficiency, alongside other sustainability issues, will only become more of a focus as time goes on.
We shouldn’t underestimate the importance of all that to a buyer. The good news is that issues that influence the buying and selling process, given enough time, can be identified and resolved where appropriate.
Don’t stop now!
Are you considering selling your dental practice in the next few years? It’s not too early to reach out to the business experts.
With that in mind, if you are interested in selling your practice, or for further information about the market in general, please email [email protected] or call 07739 876 621.
