Paul Graham, head of dental at Christie & C0, explains what you can do now to maximise your practice’s potential for future sales, and how a broker can help.
If you’re considering selling your dental business somewhere down the line, but feel that it’s too early to really begin the process, then think again. As with most things, planning is key. The earlier you start to prepare your business for sale, the better the outcome.
There may be things that you can do over the coming months/years to maximise your practice’s potential. This will enable you to negotiate the best post-sale conditions when you’re really ready to sell. That’s also where we, as brokers, can help.
Often, our advice to clients is not to sell straight away, but to work with us to identify practice improvements. Doing so will ultimately maximise future value for when it does come to selling. So, engaging in an early conversation and building a professional relationship with a sales broker who considers the bigger picture is vital.
Why consult a broker so early?
A benefit of this is that the broker can get to know your business and understand your objectives. They can then suggest areas within your business that need to be improved to enhance the demand and value.
The broker can also share market intel on what buyers are looking for, which will allow you to constantly adapt your practice. Doing this well ahead of any sale is highly recommended and will allow for a more informed outlook.
How can a broker help?
Here are some things that a Royal Institute of Chartered Surveyors (RICS) regulated broker, such as Christie & Co, can do for you:
Financial performance review and optimisation
A combination of revenue and cost optimisation to ensure that the practice operates at optimal profitability and all potential upside is realised.
Cost review and benchmarking
An independent review of the cost base of the practice and benchmarking against national and local trends to identify cost improvements and efficiencies.
Analysing the patient profile, chair usage and contract performance to evaluate products and services which can be offered to increase the practice income.
Independent operational and strategic review
A detailed review of the operations and strategy of the practice, including analysing the current design and layout of the practice. This is conducted alongside the marketing strategy and staffing profile to identify areas for improvement.
Ongoing support and advice
Ongoing financial and operational support through frequent monitoring and reviews of practice performance, to ensure the full upside potential.
Understanding the value of your property and making sure you have the right rent is critical to a successful sale. We have a team of chartered surveyors based across the UK, offering a range of valuation and property related services to the dental sector.
These include accredited ‘Red Book’ valuations for loan security purposes, valuations for partnership set up and incorporation, dispute resolution/expert witness assignments, rent reviews for landlord or tenant, and freehold ‘bricks and mortar’ valuations.
Advice from sector leaders
At Christie & Co, we analyse hundreds of dental practices, of all shapes and sizes, each year. We have therefore worked with sector leaders who sit at the forefront of some of the UK’s best dental businesses. Here are some common themes and pieces of advice from figures who we’ve had the pleasure of working with:
First and foremost, investment in yourself is so important. You’re always a clinician, so invest in yourself and do good dentistry.
Mentorship and advisors
Find a mentor: someone who will help you along your journey, walk alongside you and show you the ropes so that you can achieve what they’ve achieved in half the time.
Speak with a specialist dental solicitor, accountant and RICS regulated broker. They are dental sector specialists and have a wealth of knowledge. It is essential that you surround yourself with these professionals and tap into the right advice and support.
Aside from having the best clinical equipment to carry out dentistry, investment in practice IT is crucial. Data is power, and knowing how the practice runs will help maintain its cutting-edge capabilities.
Practice owners incorrectly consume a multitude of responsibilities and get inevitably bogged down. However, the best dental businesses are surrounded by leaders. Empower your workforce for the most efficient operation.
This is pivotal in driving new patients and repeat business enquiries.
Both of these factors underpin the profile of the practice, financial forecast assumptions, and wider strategic decisions.
Brokers as negotiators
While it is significant, working with a sales broker isn’t just about accessing potential buyers. Negotiating the post-completion terms in a dental sale is a highly sensitive and specialist area.
Experience has taught us at Christie & Co that the devil is in the detail.
The stark truth is that sellers dealing directly with a buyer are highly likely to receive unfavourable and unrealistic conditions attached to a mediocre offer.
It’s even worse for those who ‘sell their practice free of charge’, as the sales agent often takes a fee. In such a fast-paced market, it’s more important than ever before to seek accurate advice.