If you own a dental practice, you’ll almost certainly be expecting to sell it one day. Your exit may not be for twenty years, or you might already be thinking longingly of lie-ins and lazy lunches. However, many clients we work with have certain expectations around a practice sale – and often, these expectations don’t quite live up to reality.

The biggest misconception around a practice sale is how long it actually takes. Traversing the rocky road from initial ideas and preparation to final exit could take you up to a decade. But why? And what should you really expect when you’re planning your exit?

Before you sell

I’d honestly say that it’s never too soon to think about your sale. That’s because the process doesn’t begin when you officially get the ball rolling. In fact, for optimum results, we need to wind the clock back around three years from your expected “for sale” date. For your practice to achieve its best possible price, it needs to have a year’s best possible performance (and the well-kept records to prove it). But paving the way for this stellar year can take up to two years.

This all comes down to good preparation and forward planning. Before you do anything (it may even be before you definitely want to sell), we’d advise asking our partners Christie & Co for a status check valuation. This will give you a starting point to work from, and help you know when the market is strongest, to sell at peak price. Following this, we offer a range of services to get your practice into shape, from kick-starting an initial discovery process to taking a fresh look at your tax structure. All of this means that you’ll be in the best possible position to negotiate when it comes to putting your practice on the market.

During the sale

The sale itself often takes longer than people expect; typically, between six and twelve months. The Care Quality Commission (CQC) doesn’t turn things around quickly, and the same will likely be the case if the NHS is involved in your practice. On top of this, there’s a huge amount of due diligence to take care of, especially if yours is a share sale. As practice owner, many of the essential questions can also only be answered by you. An accountant or solicitor can help with some elements and a practice manager with others (for instance, collecting information), but much of the inevitable information gathering will fall to you.

A final expectation to face is the eleventh-hour hurdle. There will almost always be something – usually, seemingly trivial – that threatens to halt the sale. For one client, long ago, this was a last-minute buyer/seller scuffle over a £1,000 item of equipment. It can be stressful, but it’s normal: the key is not to sweat the small stuff (after all, you’re better off spending £1,000 on a replacement than losing your sale) and to keep your eyes on your destination.

And after…?

Of course, in most cases you can’t simply walk off into the sunset when both parties sign on the dotted line. Depending on who your buyer is, they’re very likely to expect you to stay on in your practice. This time frame varies, but the larger a practice is, the longer your buyer will typically want you to keep working. For a small practice sale, with a buyer who’ll be taking over as principal, the period may be very short (they’ll be keen to start doing things their own way). If yours is a large practice, transferring to a large corporate, it might be as long as five years.

This can be frustrating for sellers, who have their money (or most of it) in their hands and plans to realise. However, it makes good financial sense for a buyer and contributes to your final sale price. As principal, you’ll be responsible for the day-to-day running of the practice, as well as generating a clinician’s revenue; cutting these ties immediately would represent a huge risk to turnover. A corporate buyer will be looking to you to maintain your practice’s good track record, rather than installing a new management team. This way, you can finally leave knowing that your life’s work is in good hands, and likely to succeed.

Thinking of selling?

With all this in mind, the sooner you begin thinking about your exit, the better. It may be years away, but to get the best possible sale, with the best possible outcome, it pays to think ahead and (like every good Scout) be prepared.

If you’d like help making improvements to your practice, or advice on how to start preparing for sale, get in touch to ask for our help.