How to Buy a Dental Practice: A Step-by-Step Acquisition Guide for Associates

If you’re considering purchasing a dental practice, whether acquiring from your current practice principal, or buying a new practice entirely, there are a number of things that need to be considered. Practice ownership is a big step to take, and having the necessary information at your fingertips to assist you in your decision-making can be incredibly valuable.

Know your numbers

Before the process even gets underway, it’s important to reflect on two key aspects of practice ownership: your financial situation[i] and your personal values.

By having a good understanding of the numbers – the size of a potential bank loan, advice from valuers, associated costs – you’ll be able to assess whether practice ownership is the best career and financial move for you. For example, some may decide that, on balance, they’ll be able to maximise their earnings more effectively as an associate than as a practice owner.[ii]

Secondly, many people will already have their eye on a potential practice at this point. It’s important to assess whether it aligns with your values, your vision, and the types of dentistry you’d like to provide. Location is also important. This is a place where you’ll be spending lots of time, so making sure the small things – such as the commute – are realistic is essential at this stage.ⁱⁱ

Once these aspects are settled, an offer can be made, formally starting the acquisition process.

Affordability and timescale

Establishing affordability and timescale provides you with a clear idea of your options as you start your journey. By securing funding – both to cover the cost of practice purchase and any associated fees – you’ll be able to have a complete understanding of the practices in your price range which will allow you to make an appropriate offer on the practice you desire.

Understanding the expected timescale will also enable you to plan properly, and ensure everything is in place to get your practice up and running after completion. When compared to purchasing a house, which can take approximately three months on average, a dental practice can present a number of complicating factors which can draw out the process – expect 7-9 months before completion so if you have three months notice to give as an associate, you will need to think carefully about the right time to resign.

CQC and contracts

Once an offer has been accepted, a Care Quality Commission (CQC) application should be made. This can take a few months to be processed,[iii] so it’s important to complete this is a timely manner in order to avoid delaying the purchase.ⁱ

When the transfer of an NHS contract is also required (as it’s not held by a Limited Company), there will need to be a joint application between the buyer and seller. In these cases, this important asset is transferred by forming a brief partnership from which the seller will retire and leave the buyer as sole owner of the contract.

Do your due diligence

Before making an offer on the practice, you will have seen a prospectus, highlighting key information about the practice such as profitability, turnover, the number of surgeries, and the number of staff.ⁱⁱ

By doing your due diligence, you’ll discover more about the potential new practice. This stage enables you – through the seller’s and your own solicitors – to enquire about a number of things. These include the last three years of accounts, whether the practice has a private capitation scheme, and whether there are any disputes, claims, or litigation which affect the practice.

When viewing the practice, it’s helpful to have specific questions prepared, to build on what you already know about it.

With so many factors to consider when purchasing your first dental practice, it’s helpful to have experts around you who are able to offer timely and bespoke advice and support.

The Dental Elite team have decades of experience within the dental sector, who ensure the journey of purchasing your practice is as simple as possible. DE Finance, specifically, is one of the busiest specialist dental finance brokers in the UK, helping you to acquire your first practice. The team analyses your assets to provide you with a theoretical budget, stress tests practices as you view them, writes a tender for the banks once your offer is accepted, and stays by your side until completion offering support.

Purchasing your first dental practice can involve encountering a range of complications along the way. Understanding the various stages required and the support available is beneficial to ensuring your journey is as smooth as possible.