Selling your dental practice is a major milestone in your life, regardless of whether it is being done to allow you to reap the benefit of your hard work and dedication by retiring from practice, or simply to take a step back from the additional strains that life as a practice owner can bring. As with most things in life, it is useful to plan ahead and have a full understanding of the steps involved in selling your practice.
Step One: Organisation
As part of any sale process, a purchaser will ask for certain information and documentation relating to your practice. Common examples include 3 years’ worth of accounts for the practice, signed employment contracts and associate agreements and the latest practice inspection report (or Healthcare Improvement Scotland inspection, if the practice is fully private). It would be hugely beneficial to take some time at the outset to organise the documentation in your practice, so that it is readily to hand when the sale process begins.
Step Two: Finding a buyer
Some practice owners sell their practice privately, either to an existing associate or via a confidential advertisement, for example in the specialist dental press. However, the more common route to finding a buyer is through a specialist dental sales agent who will market your practice for you and maximise the value you will receive. At Thorntons, we have strong relationships with all of the dental sales agents within the Scottish dental market and so would be happy to provide you with the relevant contact details should you require these.
Step Three: Professional Team
Selling a dental practice is different to selling any other type of business and you need solicitors and accountants with a proven track record in the dental sector in your corner in order to maximise your return and ensure that you are fully protected against any adverse outcomes once your sale completes.
Step Four: Negotiations
Once your practice has been marketed, you will usually receive a verbal offer from any interested potential purchasers. Once you have accepted a verbal offer, your solicitors will then assist with the review of any formal written offer or Heads of Terms you receive from your potential buyer, which sets out the main commercial terms on which you are willing to sell your practice. Once Heads are agreed, the due diligence process begins and the asset purchase agreement (or share purchase agreement, if the practice is owned by a company) is prepared by the buyer’s solicitors and is negotiated between all parties until it is in an agreed form – this can take a few months to achieve.
Step Five: Completion
At the end of the road, you will reach the stage where completion can take place and your hard work over the years will result in you hanging up your drill in exchange for a well-earned payment. The effort involved in selling a practice shouldn’t be underestimated, but with the right advice and good preparation, it is possible to make the process smooth and stress free.
