From Sea to Study: Read this Vendor’s Journey
With nearly nine years’ experience working as a Royal Navy Officer in the Defence Dental Service and five years as the director and co-owner of a private dental practice in the heart of Exeter, Michael Hesketh has developed himself into a healthcare entrepreneur. Here, he details his journey from principal to vendor and the knowledge that he has picked up along the way…
I purchased the practice in 2012 with my wife and business partner Lara. The turnover was shrinking and there was a lot of work that needed to be done to turn it into a profitable and sustainable business. With hard work, perseverance and some business savvy, our turnover increased five-fold, the team expanded from two associates to ten and our client base grew by approximately 200 patients a month. We transformed ourselves from a stereotypical cottage industry practice to a larger business with huge profits – all within the space of five years.
And all the while this was going on, we both had begun to decrease our presence in the practice. Lara started to reduce her roles and I successfully stopped practicing clinical dentistry, until eventually we were able to step back altogether and leave the day-to-day running to a practice manager. So how did we supercharge the turnover and maximise our chances of success for selling the practice? It boiled down to three things: smart marketing, wise investments and slick systems.
Naturally, it did take a couple of years to get ourselves into a position where we were ready to sell, so for anyone in a similar position I would always advise setting aside a bit of time to implement an exit strategy, as not doing so will limit your profitability and your sale price. Moreover, you’ve got to think about potential buyers and what they will want from your business. With the Exeter Dental Centre, for instance, we had created a turnkey solution whereby the practice could run efficiently without a principal. Between that and the fact we had priced ourselves out of the single market due to our turnover, we knew that our buyer would be one of the corporates.
In the end, there were two corporates involved in the bidding process, which was handled very skilfully by our agent. Our eventual buyer was equally as professional, putting their official offer in writing. Given the stories that you hear about how some corporates behave, the way that they handled the transaction was refreshing to say the least. Everything was dealt with in a mature fashion, every query was answered quickly and communication was impeccable throughout the whole transaction – the process was just incredibly slick.
Even the due diligence was straightforward – though this was largely due to the fact that we had a fully digital, paperless practice. All we had to do was share the Dropbox folder to our lawyer who then indexed it in the way that had been requested by the corporate’s legal team. Instead of a complicated few months, due diligence was over and done with in a matter of days.
As for our completion price, the main goal for us was to get the money up front and be able to walk away at the end of it, not to get tied into a contract for three to five years afterwards like most principals do. Thanks to Dental Elite that’s exactly what we achieved. I’m now a full time student studying for my master’s degree in business administration; I don’t intend to work for two years and Lara and I have plans to travel the world with our two children for eight months. Interestingly, another agency we approached initially told us we wouldn’t achieve our walk away deal, yet with Dental Elite, our valuation was exactly what we hoped for and the sale price exceeded the asking price.
It just goes to show that if you put the work in and execute your exit plan carefully, you can achieve a lot more from your practice sale.
For expert advice when it comes to buying or selling your dental practice, speak to Dental Elite. Call us now on 01788 545 900 or download our free practice sales guides.