If you’ve taken your first steps towards selling your dental practice and have already begun preparing your exit strategy, then you’ll most likely be well acquainted with the possible pitfalls and words of wisdom from specialists and past vendors. The question is; have you given consideration to what buyers of today are looking for?
The dental practice market has changed significantly over the years, and demand, economical climate and recruitment trends are different to what they used to be. This changes things for everyone – including you – so if you want to sell comfortably for the optimal price, you’re going to need to put yourself in the shoes of a potential buyer. What are they looking for in a dental practice?
Take a trip down memory lane for a second and cast your mind back to your own purchasing experience – what was your list of requirements? It may be that you wanted a small practice that needed a bit of work and you could build from the ground up. Or perhaps it was the opposite and you narrowed your search to practices that were already well established. Whatever your preferred specification, there were no doubt a few boxes that needed to be ticked – and it will be the same for current prospective buyers scouring the market. Here are some of the areas they might consider:
Location
Where your practice is situated and in what part of the country will play a huge part in buyers’ interest. An affluent area with a thriving community, for instance, will always be more desirable than somewhere with low socioeconomic status. Likewise, a practice in an attractive setting that is surrounded by businesses and likely to attract a lot of passer-by traffic is far more appealing than a dingy building next to deserted shop fronts. If the latter description matches your practice it’s not the end of the world, of course, but it may mean that you have to work extra hard in other areas to boost your appeal.
From a geographical standpoint, the South West, North East and East Anglia are less favourable with buyers as of late due to ongoing issues such as recruitment, which could be a problem if your practice is located within these areas. Unfortunately if the demand isn’t there there’s not a lot you can do, but it’s certainly worth seeking the advice of a specialist who can help you maximise your chances of a lucrative sale. Call Dental Elite today on 01788 545 900.
Staffing
Do you have written contracts with associates? Buyers will want to know that the team plan to stay with the business for the foreseeable future, so if you’re currently working to verbal agreements it might be worth drawing up the paperwork sooner rather than later.
Patient list
A well-maintained patient list is far more incentivising than a practice with a high turnover of patients. Not only because it’s better for their own pockets, but because it makes the buyer a much more attractive candidate to lending banks. As such, a good patient plan and marketing strategy should not be underestimated during your exit planning, as it’s an area that prospective buyers will be hugely interested in.
Turnover
Alongside your patient list, buyers will look for a practice with a healthy turnover and potential for growth; again, this is an area that you can work on years in advance to boost interest. If you can prove to potential purchasers through detailed accounts and records that the business is profitable with the possibility of increasing turnover further, you should have no problem selling. Buyers and lending banks simply won’t consider a failing business – it’s as straightforward as that. Find out what your practice is worth with a free valuation.
One in, one out
The most enticing practices are those that can function successfully as a business without the presence of the Principal, as they can hit the ground running and be making money straight away. If you want a big payout when you sell, this is the direction you need to be heading in.
Buyers want the most from their money at the end of the day, so be prepared to come under scrutiny. For expert advice on planning an exit strategy and a complimentary health check to determine areas that could maximise your potential, contact Dental Elite.