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Posted by: Dental Design 29th January 2024

Selling your practice is a complex process but help is at hand at the BDIA Dental Showcase 2024

Planning for the sale of your dental practice may seem daunting but the sooner you start preparing – and planning your exit – the better, says Julie Randle, senior practice consultant at Dental Elite, the dental consultancy specialising in dental practice valuations and brokerage services.

Julie boasts 30 years’ worth of in-depth knowledge of practice management – having run large practices herself – and will be sharing her extensive financial acumen and expertise with visitors to BDIA Dental Showcase on 22^nd – 23^rd March 2024, London ExCeL.

In the Business Theatre, Julie will be exploring the ins and outs of dental practice valuations and sales. She will highlight key areas which principals need to address to ensure a correct valuation. “Health checks are very important because we are looking at key indicators within a valuation,” she says. “We can then give pointers on how to increase turnover or how to have guaranteed income streams but also look at their core costs and how that spend is reflected in their accounts.

“A lot of accountants are not dental specialists – they don’t always know what can be added back into a valuation, such as depreciation, staff welfare and training costs.”

“It’s really about drilling down and helping the practice owner look at what’s in their accounts and making sure it’s in the right place. We can make sure the percentage of turnover is sitting at the right level. The valuation process is also about giving them an idea of what their buyer may look like.”

Julie urges principals to consider a number of questions: whether they are going to be staying after the practice sale or leaving on completion? Who do they want to hand their legacy over to? And if the sale is of a large practice, is it going to be a corporate buyer and what could that deal structure look like?

“Even if you’re not thinking about selling right now, if your practice is going to be sold to someone who needs you to stay on or there’s a tie-in period or deferred element, that’s likely to be five years so you really need to think about these things now.”

Julie will outline the differences between owner-occupier deals and associate-led sales. Owner-occupier is where someone comes in and takes over from the practice owner entirely while an associate-led deal keeps the owner in as an associate but someone is coming in and running it.

“In an owner-occupier transaction, they will pay 100% on completion, whereas a corporate will look at protecting their asset and offer around 70% on completion with the rest typically over a three-to-five-year period,” Julie points out. “A lot of practice owners are not aware of this structure.”

She highlights that the buying and selling landscape in dentistry has changed and that this particular deal structure has stuck with not only the corporates but with people who have two or three practices already.

“A lot of principals don’t understand where they sit in the market. A good valuer can come in and indicate where their turnover is, where their clinical profit is and oftentimes point out if it’s highly unlikely that a first-time buyer will be able to afford their practice,” Julie explains. “If your practice is small and situated in a village location then that’s more likely to attract a first-time buyer but if you’re city based it’s more likely to be a corporate one.”

In her Business Theatre session, Julie will also explore ways of growing the value of a practice. Aside from increasing NHS revenue, Julie says that banks are looking for diverse income streams. “An in-house loyalty plan or plan provider is a good example of a guaranteed income stream,” she says.

She recommends examining a practice’s cost base. “With regards to remuneration, perhaps consider profit-related bonuses rather than give hourly rate increases.

“Examine the costs of materials and labs too. We don’t recommend a lot of bulk buying when planning for sale. You need to plan ahead,” she emphasises. “At Dental Elite, we can help you look at costs and grow your turnover, and also help you to not take a foot off accelerator – even once a sale is agreed.”

Julie is passionate about her subject and her advice is invaluable. Make sure you come along to the Business Theatre at this year’s BDIA Dental Showcase to hear her and learn more. You can also engage with the entire expert team at Dental Elite on stand D31 if you have any follow up questions or are looking for bespoke advice.

To discover the full conference programme visit the website. Register for BDIA Showcase 2024 for free today at https://dental-showcase-2024.reg.buzz/register-free-pr!