Could your Medical or Dental Office Practice sell for much more, and quicker? Just a little planning gone into preparing the practice for sale can bring in big returns. Too often I call on practices who want to sell ASAP but have spent little time in the two to three years building up to sale on planning for the event says Luke Moore, Director of Dental Elite in the UK. The result is owners who don’t get their full return on investment, and practice sales which take up to a year to complete beyond the initial sale being agreed.
Admittedly the time frame quoted is now largely due to Dental Office funding issues but often once these are resolved the vendor has rested on their laurels and considered the deal done; where actually it is far from it. This often results in another month sitting around whilst all of the ancillary staff due diligence is prepared for example. With this in mind I have compiled five things to review as early as possible in planning for your sale in order to ensure a faster and more fruitful process;
1) Get a valuation! Sounds strange to do this at the beginning of the process but every practice is different so I believe it imperative that you understand where you are now and what is bringing down your valuation so you have ample time to make the changes and report this in your financial accounts prior to marketing the practice. We offer this service for free.
2) Sort out your PCT contract! There is no harm in doing this. If you are PDS convert to GDS as soon as possible. You will not sell your practice without converting to a contract without an end date. If this means a reduction in your UDA rate – take advice and a reasonable view on what this will mean. If it is a 40p reduction in UDA rate, what is this based on? Remember to negotiate and take a view. Could 40p be £1.50 next year?
3) Ensure that all of your capitation-plan patients are in the right categories and go through a re-categorising process if necessary, as otherwise you could leave yourself exposed to a warranty claim.
4) Make sure your associates and all of your employed staff have contracts! They will need them and it is actually better for you if they do have them.
5) Put your paperwork in order and start filing efficiently. You will be asked for schedule after schedule when you do sell so if you have had three years of filing efficiently then it will make your life so much easier in three years time.
6) Comply! Comply! Comply! It is true that capital investments rarely realise a return when it comes to ultimately selling the practice but you must comply with HTM01-05 and the CQC or you will be penalised in the ultimate valuation. However, do this as cheaply and effectively as possible.
If you find this topic of interest to you or you are considering buying a practice I will be speaking at 10.15am on the Friday of the Dentistry Show in the Business Conference Area and would really like to see you there!
7) Boost the gross! Remember any extra pounds over the till now will likely add £1.40 to £2 to your valuation so give it that last extra push!