How long will my dental practice sale take?
In the build up to a practice sale it’s natural to wonder about time frames and fantasise about the completion date. You might have even circled a date on the calendar when you’d like to be finished by if you’re a wishful thinker. Unfortunately, when it comes to dental practice sales it’s not always possible to pinpoint an exact date or calculate how long the transaction will take, as it all depends on the events that unfold along the way.
What you can do however, if you want a general ballpark estimate, is to break down the component parts of the process and look out for key milestones that indicate you’re heading in the right direction.
When you decide to actually sell, a dental practice sales consultant can work with you to organise all the relevant paperwork required to go to market. This will include up to date NHS and plan statements, recent financial statements and an Energy Performance Certificate. If it’s a timely sale you’re after it’s a good idea to make a start on your due diligence right away and find a dental solicitor. That way, you can hand over the required paperwork as soon as the deal is agreed.
Agreeing the sale
The time it takes to agree the actual deal will vary, but for popular practices the terms are often settled in four weeks, after allowing time for viewings and a bidding process. Others, however, can take up to three months so already you can see that timings are anything but easy to predict. Once a deal has been struck and deposits have been taken, it is often much easier to track your sale as to where it should be in relation to the average sale. Though, again, time frames will vary depending on whether you have an NHS or private contract, are a Sole Trader or Limited Company and if you have a freehold or leasehold.
Where possible you should aim to submit all due diligence documentation to your solicitor within one month of the agreed sale. The buyer’s solicitors will almost always come back with questions so the quicker you can get everything back to them the sooner your sale will finish.
Sale purchase contract
Time frames are more unpredictable at this stage as the outcome is completely at the mercy of the solicitors. The more experienced and knowledgeable the solicitor the less likely you are to experience problems, so it is always best to utilise the services of a trusted dental specific firm.
The CQC application process can be lengthy at the best of times (three to four months on average if everything is completed to the letter), but if the application ‘times out’ or has to be resent it could take much longer. Best case scenario would be that CQC processes your application within the usual 10-12 weeks, but if you need to give notice to the NHS that could add on a further four weeks to your end date. To give yourself the best chance of keeping on track you will need to have the forms ready at the same time as your due diligence, and submit your DBS (Disclosure and Barring Service) application at least four months in advance to give yourself time to procure a counter signature.
As you might have guessed securing practice finance isn’t a walk in the park either. There’s a lot to it, that we won’t go into now, but from a time perspective you can expect the process to take around three months from the point the bank agrees the loan to offering the cash. As a vendor, your main indication of where you are in the process will be when the bank requests another chartered valuation.
Exchange and completion
Nearly there! Once the paperwork and lease (if necessary) have been agreed, the buyer’s bank is happy and the CQC application is complete, completion can take up to a month. Typically, the time difference between exchange and completion for private practices is much smaller, so if you are selling a practice with an NHS contract, be aware that it can take longer.
Every sale is unique
The important thing to remember is that every sale is unique. Just because it took one of your peers six months to sell it doesn’t mean yours will. True, there are rough guidelines to follow as we’ve highlighted here, but there are so many variables that it’s impossible to predict exactly how long your sale will take.
What Dental Elite can do, however, is work with you to guide you through the entire process. Experts ensure that each and every aspect of the sale is carried out efficiently so that you can achieve the best possible outcome. If you’d like any more information about the areas we’ve touched upon or want to make a start on your exit strategy, call the Dental Elite sales team today on 01788 545 900.
Book a free practice valuation and find out how much your practice is worth. Or if you’re looking to buy a new practice, take a look at our latest listings.