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Most dental practices and surgeries are owner-operated, meaning that if you’re looking to dispose this is likely to be your first foray into selling a business. Fortunately, there is plenty of help and guidance that will ensure even the most green seller can ace the process and secure a fair price.

Begin by establishing your goals for the sale

As with any successful project, the first step is to lay out the goals and objectives. This includes the price you’re hoping to sell for, and the path you’ll take next - whether that’s retirement, buying another practice, or perhaps continuing dental work as an employee.

Even seasoned entrepreneurs that buy and sell on a regular basis will call in the expertise of a business advisor at this stage. A good advisor will be able to give you an expert’s view of the value of your practice, and will establish a framework for the sale that allows you to achieve all your objectives. They will also be able to advise on the most tax-efficient methods, too, as selling a business can result in crippling tax bills if planned badly.

Once you’ve decided that a sale is on the horizon, it’s time to prep your business for sale. This can take several months, even a year or more in some cases, but it’s worth the effort - all energy employed now makes for a quicker and smoother sale process. It’s better to get things in shape on your own terms than to find yourself firefighting when you’re at the negotiating table.

Preparing a business for sale

When selling a business, much like when selling a house or a car, it’s advisable to give it a spring clean. Presentation is everything, and a slick and appealing operation will impress potential buyers as they deliberate whether to part with their hard-earned money.

Your visual presence is crucial, so your premises should be tended to, both clean and well presented. If your practice as a homely feel, it may be best to minimise the number of personal items around the place in order to give the business a more professional feel. A buyer needs to be able to picture themselves in your role, and a more neutral approach will enable them to do that.

Now is also a time to ensure your finances are in order. The most valuable aspect of a dental practice is its revenue stream, so getting your books straight, including calling in overdue payments, will increase its appeal.

And if you haven’t already, now may be the time to explore online marketing with a website and social media. More and more dental practices are utilising these tools, and it’ll position your organisation as forward-thinking and with the the potential for growth. Online marketing gives existing customers more ways to keep in touch, allows you relatively cheap access to new prospects, and whether you’re aware or not, your business has likely been reviewed online - for better or worse - by customers already. You’re better as part of the conversation than it taking place without you. If you don’t feel like you have the time or expertise, plenty of online specialists are available to help, ask your business advisor for recommendations.

The sale process

You’ve set your objectives and your practice is looking great, now you need a buyer. Whether you’ve already had interest or you’re starting fresh, a business broker will be able to scour the market for potential candidates. Testing the market will give you a feel for the best price you can command, and competition can even spark a bidding war.

Once you’ve accrued a shortlist of interested parties, and narrowed them down to serious candidates with access to appropriate financing, it’s time to invite them to inspect your business. This won’t just mean simply poking around your premises either - any buyer who knows what they’re doing will want to undertake a full due diligence process. This means combing through recent financial records, checking your licences, leases, legal records and every last piece of information so that they (and any financial backers) know exactly what it is they’re buying.

This may seem invasive at times, and it can be a lot of hard work, but it’s where all your preparation in advance pays off. Having all this information in order and well presented means you’ll be able to quickly and confidently field all questions thrown your way. But even in the best case scenario, this can prove to be a huge drain on your time, so if you’d rather focus on running your business, or you’re just not confident fulfilling this duty, then this is another area in which a trusted business advisor can prove invaluable, and they will lead this process and handle enquiries on your behalf.

Securing the best price

Most dental practices will sell for between 50% and 100% of their annual income.

Higher prices are paid for businesses that can prove healthy levels of profits in recent years, are in desired locations, are operating out of well-maintained premises and using up-to-date equipment. This is another good reason to invest a little in your business before it goes to market.

General practices attract more interest than those with specialist niches as, inevitably, there are more dentists out there with the skills to be able to move seamlessly into a generalist’s practice. A narrow specialism can limit the number of interested buyers, unless you can guarantee some level of staff continuity, either from key employees or even you yourself.

The final price won’t be the only factor in determining how successful your sale is. The structure of the deal, including whether there’s one up-front payment or installments paid over a period of time, your exit or continued role within the practice, are also key factors to consider. This will affect how much money you receive, but can also affect your tax liability.

Negotiations can be undertaken by a business advisor on your behalf. They’ll have the experience and ability to secure a deal at the highest possible price, and which meets your objectives - both personal and tax-related.

If you own a dental practice that you’re looking to sell, contact BTG Corporate Finance for a free consultation to find out how our advice, guidance and expertise can help you achieve a successful sale.

Martin Kennedy

About the author

Martin Kennedy

Director

Meet our Team of Experts

Martin has nearly 20 years’ corporate finance experience specialising in advising owner managed businesses. Martin has considerable experience advising on business sales as well as management buy-outs and acquisitions across a wide range of sectors and deal sizes.

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