How to Avoid the 5 Most Common Mistakes When Selling a Dental Practice

When it comes to selling your dental practice you will only get one shot to get it right so it really matters you are well informed and prepared.

It is absolutely possible to sell your dental practice yourself without the need for a sales agent, however, given the value of this asset most tend to bring in some specialist help.

Based on our extensive experience here are the five most common mistakes made by practice owners when they sell their practice privately:

1.       Allowing the buyer to value your business – this is the first cardinal sin. Whether the buyer is your friend down the road, an associate or corporate you must take control of the valuation. It is vital to ensure it has been prepared on an independent basis and reflect what your practice is worth in the open market. A corporate that could own hundreds of practices offering to ‘value your practice for free’ may have a vested interest in being less than generous with the valuation as they will be the buyer.

2.       Keep it confidential – selling your dental practice could take up to nine months and during this process it is really important that you keep it private. Without being able to present a full picture to your staff it could well cause unrest to the point where someone leaves. Equally, you don’t want patients to be disturbed and find another practice. Both of these factors impact on of the goodwill value of your business if poorly managed.

3.       Sharing too much information – a buyer will want financial and non-financial information about your practice and the sharing of this needs to be carefully managed to ensure that only truly interested parties get the nitty gritty detail. You need to filter out those who are just searching for information with no desire to buy – with over 4,500 dentists looking to buy a practice this can be a daunting task.

4.       Negotiating – this is core to getting a good deal. The overall deal isn’t just about the price either. Some buyers will lead you to believe that part (could be 30%) of the purchase price being deferred is normal – it isn’t. There could well be restrictive covenants and you need to know what can be negotiated and those that are non-negotiable (which is very few).

5.       The power of the open market – when selling privately it can be difficult to manage the expectations of different interested parties. However, this is vital if you are to secure the best price for your practice. By starting with a wide audience and filtering this down to the 2-10 who are seriously interested will ensure the process remains competitive and provide a Plan B should things not work out with the preferred buyer.

With careful management and a considerable investment of time there is no doubt you can self-manage a sale. On the flip side, if you would like to focus on doing what you do best (dentistry) and engage a team of specialists to manage the end to end process we would love to hear from you.

You can speak to a member of our team by calling 0330 088 11 56 or have a look at our website for more details - www.ft-associates.com

I want to buy a dental practice - how do I make a winning offer?

If you’ve found the practice of your dreams, then now’s the time to put in an offer.  You may find that as there is high demand for dental practices at the moment others will have also put in offers for the same practice.  So, if this situation arises, you will be invited to place a ‘sealed bid’. This is your best and final offer and is considered to be the fairest and most ethical way to achieve the best price for a practice. Our belief is that this approach is far better than an auction, where each buyer is told the highest bid through to the deadline as this often leads to offers being made from the heart (rather than the head) and at some point through the purchase process the buyer then looks to re-negotiate after they realise that they may have overpaid!

During the sealed bid process you will be invited to make your ‘best and final offer’ so it’s crucial that you consider this carefully as this will be your last chance to secure the practice.  Sadly, we have lost count how many times potential buyers have said things like:

·         ‘If I’d have known another £3,000 would have secured it, I would have paid it.’

·         ‘I could have paid a bit more.’

·         ‘I should have paid an extra £8,000 as this was the practice of my dreams.’

The list is endless, but in all these cases the prospective buyer put in what they thought was their best offer, but not a winning offer.

There is of course a fine balance between paying just enough and missing out – no one wants to pay more than they need to. However, if you have found the practice of your dreams and it requires you to put in a winning offer to secure it then this needs to be done BEFORE the final deadline for offers. After that it will be too late as the practice will be sold to someone else.

Many buyers who have been bold and made winning offers take the view that the additional amount paid factored in over the period they will own the practice is certainly a price worth paying.

There is no right or wrong approach; it’s about what is right for you. However, next time you are in a position where you have the potential to secure the practice of your dreams make sure you do three things.

1.      Stop

2.      Take a breath

3.      Ask yourself – is this the special practice that warrants a winning offer?

Good luck in buying the practice of your dreams.

Workplace Pensions – The Key Facts

If you’re a business owner or employer, you will hopefully by now be well aware of Workplace Pensions. If not then it’s important you find out more information as soon as you can as you could be staring in the face of an immediate £400 fine if your business isn’t compliant in time!

Here’s a quick summary for you.....

As an employer/practice owner you have a legal obligation to provide, manage and contribute to a pension scheme for all eligible staff working within your dental practice.

Workplace Pensions are already well under way for a number of businesses in the UK and with thousands more reaching their staging date imminently, it’s important that you act now and start preparing – there’s a lot that can be put in place earlier. As part of your duty as an employer, taking some initial steps now will certainly help you along the way.

·         ‘Staging Date’ - Make sure you know when yours is.  This is the date on which your workplace pension scheme has to be up and running for your business. Check your date on our website.

·         Determine which employees in your practice are eligible to join your scheme.

·         Communicate with your staff and start to tell everyone as much as you can early on.

·         Make sure your systems/processes are in place.

·         Get the right advice and explore your options. Many clients assume NEST is the obvious choice but be aware there is a 1.8% levy on all pension contributions and you will need to set up an in-house system to ensure you remain compliant and communicate with you team any important updates.

·         Benefit from cost savings by putting plans in place early.

If you want to find out more, a FREE Workplace Pensions FAQs report is available on our website.

It is a legal obligation for a Workplace Pension to be set up and the Pensions Regulator is quick to issue £400 wake-up call fines for all though businesses that are non-compliant.  And that’s before big daily fines of £500 or more!

It’s therefore essential that you get good advice.  We’ve already spoken to many practice owners who have ended up short of time to enrol in a workplace pension scheme due to either attempting to do it themselves or assuming that their accountant or payroll provider was dealing with it.

Don't get caught out - ACT NOW!

To speak to a member of the Frank Taylor & Associates team about Workplace Pensions, please call 0330 088 11 56.

Selling your dental practice - everything you need to know

Planning is vital. Ideally you should be considering your options three years in advance. Therefore think ahead about the next steps for the future of your practice in advance.

A Valuation is important. Do not accept any offers until you know your practice’s worth from an independent valuation. Many principals are amazed at the attraction their practice has to the open market. A principal once was about to sell for £815,000 when his practice was worth in excess of £1,500,000, meaning he would have lost nearly £700,000!

Time is essential. Allocating time to sell needs discipline. It takes a lot of time and skill to manage a deal through to completion. It may require several months of your dedicated attention. Because of this, it is well worth looking into the support you could get from an agent. It could save you a significant amount of time and stress.

Understand the market in your area. There are currently over 4,500 dentists looking to buy a practice in England or Wales with Frank Taylor & Associates. And when you consider that 14 banks are lending to dentists, we know they are genuinely interested and have sufficient access to funds.

Think about your premises. Are they freehold or leasehold? If leasehold, check there are at least 10 years left to run. If this is not the case, then look into seeing if a shorter lease will impact on the goodwill value.  Or if you want to sell the freehold, arrange a commercial valuation.

Consider your future. What are you planning to do once the practice is sold? Are you planning to stay on at the practice? What hours would you like to work? What associate fee would you charge?

Have you thought about due diligence? This is very important to make a start on as soon as possible. It is the assembling of all the essential paperwork required to sell your practice.  Usually this takes as long as 3-8 weeks to complete. So the sooner you start the better!

Engage a specialist dental solicitor – it will make a huge difference to your transaction speed.

Look around and find the right agent. Check they have access to a good supply of dentists looking to buy. Make sure they take the practice to the full open market. Look into if they work for both the buyer and the seller as this creates a conflict of interest. Chat to a number of agents and decide which is best suited to you.

Maintain positivity. Potential buyers will be looking at the practice performance through the process of the sale and could ask for a reduction in the sale price if your figures drop. Therefore it is vital to stay positive and keep the practice running to the best it can be so that you receive the best price.

For more help and advice on selling your dental practice, give us a call on 0330 088 11 56 or visit www.ft-associates.com 

Are you prepared?

If you have a leasehold practice that you’re thinking about selling in the near future, then it’s really important that the terms and conditions of the lease are fit for a sale when the time comes. 

More and more practices are now coming to the market as leasehold and whilst banks are happy to lend against a lease, they do insist the lease has at least seven (ideally ten) years remaining as they will secure the loan around the years left on the lease.  So, if your lease has less than ten years to run, we suggest that now might be a good time to get the term extended without telling the landlord your long-term plans.

Alternatively, if you own the freehold and are your own landlord that will certainly make life much simpler.  And if you are considering retaining the freehold (possibly to put it into your SIPP) and will be creating a lease you should be clear what your terms will be.  Make sure you discuss the property with a chartered surveyor.

We tend to see issues arise mainly from a third party landlord who is either disinterested and not engaging in the process, or sees it an opportunity to benefit financially from the sale by holding the principal to ransom.   Issues with a lease and landlord can delay a practice sale considerably as we’ve seen recently with a leasehold sale we were involved in.  Once the sale was underway, it was disclosed that the lease contained a clause stating that on any application for consent to assign, the tenant must first offer to surrender the lease to the landlord and as soon as the landlord realised it was a sale, he insisted on this.  The principal’s lawyer thought the provision was un-enforceable and sought Counsel’s opinion to confirm this (yes, not cheap!) and sadly it wasn’t quite as black and white as they had hoped.  Counsel said that the landlord could insist that the principal had to offer to surrender the lease to the landlord first, but that if he accepted, the landlord then couldn’t force the principal to actually surrender it, he could however block the assignment. This left a bit of a stalemate and eventually the landlord did agree to surrender and re-grant the lease, but for a shorter term and with additional changes.  Whilst all of this was happening the principal continued with his usual workload and was kept busy ensuring that his practice remained on track.  Added to the fact that the sale was delayed by many weeks!

For more advice on selling your dental practice call 0330 088 11 56 or visit our website www.ft-associates.com

CQC Inspections

In April 2015 CQC (Care Quality Commission) introduced new fundamental standards and key lines of enquiries for monitoring the dental sector as a result of a review that saw the CQC recognise that dentistry could be classed as low risk compared to other areas it covers. 

As a result of this change in regulation, this now means that all dental practices have to provide evidence they are fully compliant at all times across five key lines of enquiries.  These are:

Is this practice....

• Safe
• Effective
• Caring
• Responsive
• Well-led

Practices are expected to be able to evidence that their policies and procedures are fully incorporated into the practice, are “living” documents and that all of the staff are fully aware and conversant on what the policies and procedures entail.

Going forward, the CQC inspections undertaken at a practice are to be very different.  For example, six weeks before an inspection takes place (and four weeks before the practice is even aware that an inspection is to take place) CQC will start gathering information from a number of different sources such as:

GDC
NHS England
NHS Choices
Consumer websites – such as Yell.com

In terms of the actual inspections....they will take all day and the inspector undertaking the review may be accompanied by a dentist who will interview all staff members (both clinical and administrative) and any patients who are prepared to be interviewed.  

Given these important changes, it’s vital that dental practice owners understand the new regulations and are prepared.  At Frank Taylor & Associates, we’re providing a series of one day seminars (CPD points available) where we cover all the key issues on running a successful practice in today’s marketplace.  For more details on these seminars, please call 0330 088 11 56 or visit ft-associates.com

Top Tips on Selling Your Dental Practice

If you've decided that it’s the right time to sell your dental practice, have a read of our step by step guide on how to go about it.

1.       PLAN in advance (preferably before you make any plans or book your round the world cruise!).  Succession planning is vital and ideally you should be considering your options at least three years in advance.

2.       Keep motivated in running your practice.  It is vital to keep the turnover up as any potential buyer will be looking at your figures all the way through the sale process, and could demand a reduction in the sale price to reflect a drop in turnover.

3.       Get a valuation.  This is important so you know exactly what your practice would be worth on the open market.  And even if you are approached privately make sure you still get an independent valuation and do not accept any offers until you’ve done this.  You might just be amazed at the true value!

4.       Make time to sell - if you have agreed to sell to an associate, private individual or corporate don’t underestimate the time and skill it takes manage the deal through to completion. It will require your attention for several months. A reputable agent acting on your behalf could make all the difference to the deal.

5.       Make sure you understand current market dynamics in your area.  There are currently over 4,300 dentists registered with us who are looking to buy dental practices in England or Wales, and with 14 banks actively lending to dentists we know they are not just looking, but have a genuine interest to actually purchase as well as sufficient access to funds.  For more details on funding contact FT&A Finance.

6.       Freehold or leasehold premises? If leasehold, make sure there are at least 10 years left to run. If not, then establish if a shorter lease will impact on the goodwill value. If you want to sell the freehold, arrange for a commercial valuation.

7.       Due diligence – make sure you have all the essential paperwork required to sell your practice. This routinely takes 3-8 weeks to complete so the sooner you can start the better – ideally before you've found a buyer for your practice!

8.       Engage a specialist dental lawyer - it will certainly make all the difference in the long run.

9.       Think about what you want to do in the future?  For example, do you want to stay on at the practice? If so, how many days will you want to work? What associate fee would you work for?

10.   Select the right agent - some agents work for both the buyer and seller which clearly creates a conflict of interest.  It’s worth also checking that they have access to a good supply of potential purchases and that they always use the open market when the time comes to the actual sale.  

For more information on selling your dental practice visit our website - ft-associates.com 

Your Essential Guide to Workplace Pensions

If you’re an employer you should hopefully by now have heard all about workplace pensions (auto enrolment) particularly as you have a legal requirement to provide, manage and contribute to a pension scheme for all eligible staff working within your business.

But don’t panic, it’s not as daunting as it seems as long as you act now and start preparing. 

A few tips:

·         Make sure you know your ‘Staging Date’ – this is the date on which auto enrolment goes live for your business.

·         Determine which employees in your practice are eligible to join the scheme.

·         Communicate early with your staff and start to tell them as much as you can about auto enrolment beforehand.

·         Put in place systems/processes ready for when auto enrolment takes place.

·         Get the right advice – a crucial factor in getting it right!

·         Put in place your plans as early as possible and benefit from cost savings.

If you want to find out more you can have a read of our FREE Workplace Pensions FAQs click here.

And it’s worth noting - auto enrolment is a legal requirement and the Pension Regulator is quick to issue £400 wake-up call fines for non-compliance – this is before big daily fines kick in for any employer who hasn’t got their scheme up and running by the required deadline (staging date).

Finally, getting good advice from the outset is critical.  We’ve already spoken to many business owners who have ended up short of time to enrol due to either attempting the DIY route or being under the impression their accountant or payroll provider was dealing with it.  Don’t make that mistake!

For a limited time you can reserve your enrolment place for FREE.  To be eligible for this limited time offer your Staging Date must be after October 2015. Space for 100 businesses only. Registration deadline is 30 June 2015 - register today

Where There’s a Will, There’s …. Peace of Mind

Before our time is up we have a moral obligation to ensure our affairs are in order.  This can very easily be achieved by putting in place a Will that provides clarity, formality and a legal structure. Without one, loved ones can potentially be left with chaos to sort through, family arguments to deal with, a dramatically extended legal process and payment of unnecessary inheritance tax.

It is estimated that 70% of the UK population don’t have a Will - with this number rising to 84% for the 18-34 age range.  It is quite concerning that there is such a low take-up rate for getting a Will sorted and that the majority haven’t got one!

There are many high profile people who have died without writing a Will, from the musical legend Jimi Hendrix (the battle for his estate raged on for more than 30 years) to more recently the comic genius Rik Mayall.

Then there is the tragic case of Jade Goody – reality TV star who passed away at the age of 27 from cervical cancer.  Her estate was completely wiped out as she did not have a Will.  The money Jade Goody earned should of been enough to ensure her two sons had a good education and a degree of financial security, but sadly this was not the case.

Don’t let this happen to you.  A situation like this is completely preventable through the creation of a Will in conjunction with the use of Trusts.

You can start the process very quickly now by visiting our website – www.ft-associates.com 

Workplace Pensions Compliance – 5 Essential Tips

Workplace Pensions aren’t an option and with the threat of big fines for those businesses who are non-compliant, it is vital you have a plan of action.

Here’s a few essential tips to ensure you’re on the right track:

1. Make sure you know your Staging Date and that you have started to implement an appropriate, compliant scheme at least 15 months ahead of this date.  If you’re not sure when this is for your business, we can help – www.ft-associates.com
2. Assess all your employees to see if they quality for Auto Enrolment.  There are certain criteria they need to meet in order to be eligible.
3. Ensure you have a written proposal detailing what is involved in running a compliant Workplace Pensions scheme.
4. Understand that using Salary Exchange can mitigate your costs in running your Workplace Pensions scheme.
5. Ensure that your scheme provides all the ongoing automated communications needed so that when an employee’s situation changes you remain legally compliant.

Many business owners assume the set up and management of their workplace pension scheme is being managed on their behalf by their accountant or payroll provider, but as this matter relates to pensions most are not qualified to deal with this matter.  As a business owner you are the one legally responsible to implement a compliant scheme.

If you are unsure where you stand and want to find out more about workplace pensions visit our website at www.ft-associates.com

For a limited time you can reserve your enrolment place for FREE.  To be eligible for this limited time offer your Staging Date must be after October 2015. Space for 100 businesses only. Registration deadline is 30 June 2015 - register today

Is It A Good Time To Sell My Dental Practice?

If you’re thinking about selling your dental practice, don’t attempt to do so without enlisting the help of a well-established and professional dental practice sales agent, one that specifically specialises in the dental industry.

Of course, that advice sounds like common sense but it doesn't hurt to state the obvious sometimes.

Frank Taylor & Associates - Specialist Dental Sales Agents

Over the years, dental sales agents Frank Taylor & Associates, have established themselves with a proven track record since their business was established in 1988. It's a record of achieving top prices for the sale of their client's dental practices and in doing so earning a nationwide reputation for professional competence and ethical conduct. It also speaks volumes when you consider that Frank Taylor & Associates sell more dental practices than any other broker in the UK.

Those dentists who decide to sell their practices through Frank Taylor & Associates are always pleasantly surprised at the effortless way in which the stressful process of  valuing and selling a dental practice is alleviated as Diarmuid Lavery, a dentist practicing in Manchester,  recently discovered when he decided to sell his dental practice through Frank Taylor & Associates.

“From the moment we picked up the phone to the Frank Taylor & Associates team, we knew it was the right choice and they were the right team to work with us on the sale of our dental practice."

Diarmuid chose to sell his dental practice at a time when values were increasing and he wanted to be sure to get the best possible price. The team at Frank Taylor & Associates worked tirelessly to make that happen, producing informative and good looking sales literature and organising viewings with interested parties who were genuinely interested in making an offer.

Leave It To The Experts

After deciding to "sell my dental practice," Diarmuid was happy to leave the entire process to the skilled, knowledgeable and experienced team at Frank Taylor & Associates, before, during and after the sale, saying "once we’d found our buyer, the good service from Frank Taylor & Associates didn't end there.  We always felt that someone was “fighting our corner” and the sales process was driven forward persistently.  From viewings to completion, it was all very organised, efficient and professional.  We wouldn’t hesitate to recommend Frank Taylor & Associates to others.”

The sale now having been concluded, Diarmuid and his wife Helen can spend time to plan the the next phase of their lives together.

It goes without saying that selling a dental practice is one of the most important and life-changing steps a dentist can take during their career, with the value of a dental practice representing much more than just money, often after many years of hard work and dedication spent building up and developing that practice.

Find Out More - Get The Guide

So, if you've started to think, "is now a good time to sell my dental practice?" and you do make that important decision to proceed with a sale, or at least finding out more about what it entails, then it’s very important that you do everything possible to get all the right information and professional help throughout the sales process, from start to finish, and beyond.

To download the free guide to selling a dental practice - your dental practice - visit our website.