Does it take longer to find a practice as an independent buyer?
As an independent buyer finding the ideal practice can take an average of up to two to three years – much longer than it would take a corporate. The main reason being that corporates can afford to be a lot less picky about the practices that they’ll look at and tend to have a wider selection to choose from. As long as the practice is profitable and sustainable, other factors are negotiable.
They’re also less inclined to worry about business growth, particularly with NHS practices. Instead, they will tend to focus on what’s there at the time of purchase, ensuring that the business is financially sound and profitable as it is. On top of that, corporates have got better accessibility to money. Their pots are much bigger and they have much greater support from venture capitalists. This naturally makes the process of purchasing a practice much simpler, not least because it cuts out the need to undergo an affordability test with a broker and bank.
For you as an individual purchaser it is a different story, as it is most likely the case that you will be relying on financial support from lenders to acquire a practice. This immediately limits your options, because what you want may be outside of your price range. Likewise, the practice that you choose has to be able to provide adequate returns to cover the loan repayments and pay yourself a decent wage, otherwise you won’t secure the loan from the bank – nor will you be able to turn a profit.
What you’ve also got to remember is that your criterion is probably a lot more restrictive than a corporates would be, as your acquisition is a personal investment that will have a direct impact on your day-to-day personal and professional life. It’s got to be in the right area, have the right potential, and suit your personal and clinical needs. As such, it’s always going to be much harder to find a practice that ticks all the boxes.
Still, there are steps that can be taken to put yourself in a better position and speed the search process along. Firstly, recruit the help of a reliable sales and acquisitions agency that has an unrivalled knowledge of the market and access to practices throughout the UK, such as Dental Elite. It can also help to have guidance from a specialist broker. Conveniently, Dental Elite also operates a brokerage service, DE Finance, who can help you to establish your affordability and what practices might be suitable. That way, when the right practice comes along, you will be able to move quickly and decisively.
So don’t despair; yes, it might take longer to find a practice when you’re a single buyer, but with the right help you are sure to find ‘the one’ – and that’s the main thing.