How to sell your dental practice successfully with these 5 tips
Having spent many years as a dental practice owner, you may now be looking to ease off a little.
Alternatively, you have built up an extensive patient list, have an excellent reputation, and feel the time is right to maximise your profits. Whatever your reason for selling your dental practice, you’ll want to ensure the process is well-organised and stress-free.
So, what steps should you take when selling a dental practice? Read on for our top tips from our team of dental law experts.
How to sell your dental practice
Below are five helpful tips to help you achieve the best possible outcome when selling a dental practice:
1. Organise your practice
Get your house in order before starting the sales process. Consider if you want to do this in the next 12 months or 3 to 4 years. Whatever you decide, make sure your financial information is accurate and up to date, as you will need to show your financial performance to prospective clients.
A practice with incomplete or poorly drafted accounts is bound to raise questions for any potential buyer and their accountant, which may cause delays and additional costs during the due diligence stage of the sale. Poorly drafted accounts can also create issues for the buyer when seeking to obtain finance.
If you have a patient plan, ensure it is well maintained, as a coherent plan will tell a lender that cash flow is steady. Again, this will make it easier for buyers to get funding in place.
Ensure you have copies of all contracts readily available, including your employees’ and associates’ contracts. You will have service contracts with a number of providers, and records of those should be kept, too. Having a PDF or scanned folder of all those documents on a storage drive helps immensely. Make sure to label them appropriately so they are easier to search.
2. Essential improvements
Consider what changes and improvements can be made to the business to make it more attractive to prospective buyers. Are your policies, procedures and contractual documents up to date and readily available? A prospective buyer will want to see that the practice runs effectively and efficiently and that staff members are properly managed.
Whilst there is limited benefit to upgrading equipment, ensure that any broken equipment is fixed, and servicing is up to date. It is also worth considering how the practice looks and undertaking a limited number of cosmetic repairs to ensure that the premises look clean and fit for purpose.
3. Seek advice
Get professional help early. By seeking advice on valuation and compliance at the outset, you are more likely to save money and hassle in the long run. Identify lawyers, accountants and brokers who have experience in similar transactions.
Using the same solicitor who helped you sell your home is unlikely to assist the transaction of a dental practice. Professionals such as the experts at JFH Law have a deep understanding of dental law to help you with every step of the process, smoothing the way for you to sell your dental practice.
4. Consider all offers
You may receive various offers when selling a dental practice. Reviewing these carefully and with due diligence is essential, as it is imperative that you know to whom you are selling your dental practice. Whilst you may know the type of person you want to sell your business to, you must keep an open mind.
Whilst a large corporation may offer you less money, they will likely have the resources to fulfil any offer they make to buy and to do it quickly. Your friend and associate may have the will, but simply not the way to move forward with the sale.
It is likely that any purchaser will ask you to remain at the practice for a period of time to ensure a frictionless transition. Have in mind exactly what you are and are not willing to agree to. Don’t agree to remain at work for the sake of a quick sale if, for example, you intend to retire weeks later.
5. Set Heads of Terms
Once you have agreed on a sale in principle, move quickly to put Heads of Terms in place.
These will allow the parties to put their intentions clearly in writing and avoid misunderstanding and renegotiation of terms later down the line.
Usually, the buyer’s solicitors will draft the Heads of Terms, but there may be occasions where the broker or agent does these. Ensure the document is clear and accurate, and always ask your lawyer to review it before signing.
At this stage, the parties will commence the due diligence process. This can be a complex and time-consuming process, requiring the disclosure of information relating to all aspects of your business. Therefore, you must be prepared for full disclosure and be ready to answer all questions asked of you.
Find expert support for your dental practice with JFH Law
We hope the five pointers above have helped you to consider certain aspects before deciding that selling your dental practice is the right decision.
Get in touch with the team at JFH Law today if you need assistance with a transaction you are considering, dental business support, or any other issue you may be facing. Our team has years of experience in dental law and will be with you every step of the way to work on your case.
Please note that the information contained in this article was correct at the time of writing. There may have been updates to the law since the article was written which may affect the information and advice given therein.