During a practice sale, you will be tasked with the challenge of maintaining and keeping the business stable as well as preparing for the processes associated with a dental practice transaction. Getting on with your usual everyday tasks whilst considering how they could affect the sale is a huge part of this.
It may be that an associate resigns and you have to recruit to fill that position. The main priority, of course, would be to find a candidate that is appropriate for the role as quickly as possible and to adjust the treatment diary to accommodate for the temporary shortness of staff. However, what you need to remember is that as soon as a sale is agreed, it’s no longer just yourself that you have to answer to. Indeed, any decision made after heads of terms will need to be done in collaboration with the purchaser, because if they agreed to take on staff salaries at a certain cost, you can’t then alter them without first consulting the buyer.
You therefore need to ensure that everyday tasks such as recruitment are handled in such a way that the purchaser is taken into consideration. So, if for example your associate leaves, you will need to either ensure that the contract for the person coming into the role remains the same, or if there are any changes that need to be made that the buyer is aware and happy with your decision.
Needless to say, recruitment of any sort would need to be carried out without giving any indication of the practice changing hands, both for confidentiality purposes and to protect goodwill. Likewise, existing team members should not be made aware of the sale until the later stages of the transaction, otherwise staff can become very unsettled. As such you should always endeavor to handle tasks related to the sale outside of office hours. That will inevitably mean longer working hours and extra weekends, but in doing so you will achieve a smoother sale.
Even regular practices that you may have always done such as an annual pay rise can’t be done without the say so of the buyer, because if you agree on figures during the heads of terms you can’t change them without consulting the buyer first. So it’s about managing the practice in a way that ensures the daily routine continues as normal without deviating from the agreed terms.
The other aspect that you will need to take into consideration in order to successfully navigate your way through the practice sale is the impact of your clinical day-to-day responsibilities. All too often principals make the mistake of reducing their surgery hours and reducing the amount of patients that they see, resulting in stagnation of growth and loss of income. Naturally, this can unsettle both the buyer and lending bank, as a business with falling profits is not a safe option to lend against. As such, you must ensure that you maintain the exact surgery hours and patient base you were doing before putting the practice on the market. These are the sorts of everyday considerations that you have to give thought to when managing your practice during a sale.
Of course, there are also bigger changes that sometimes need addressing such as NHS contract performance and turnover. If your NHS contract is underperforming, you will need to deal with that before you approach the end of the contract year, which might only be half way through your transaction. With management of this kind it is always advisable to notify both your legal and sale representatives of the situation, as they can offer guidance on how best to ensure contracts are met and the sale is successful. It may be that their advice is different to the approach you would normally have taken to resolve the issue, but where the outcome of the sale is at risk, it’s important to seek professional support. Equally, you may need to put extra precautions in place such as evaluating figures on a weekly basis rather than monthly. That way if underperformance looks like it might be an issue, it can be resolved sooner rather than later.
As for turnover, it is always advisable to negotiate an agreement during the heads of terms that it will stay within 5%. That allows for some minor deviations in the turnover throughout the sale, though it will of course need managing so that small issues don’t escalate into anything bigger.
Dental Elite will work with you closely during all stages of the sale to both guide you through the transaction and offer advice on the best way to deal with changes and problems as well as the everyday management of the practice. With an experienced representative at your side you are sure to strike a good balance between your responsibilities as a vendor and as a principal.