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MediEstates Pharmacy - Time to move on?
Time to move on?

Time to move on?

 

Dean Barker discusses ways to build an effective exit strategy by maximising untapped practice potential


Life working as a dentist can be very demanding, especially for those who own and manage a busy NHS practice.

With so much uncertainty around the NHS contract reforms, combined with the unknown outcomes of Brexit, it’s no wonder that many principals and practice owners are considering their options and looking to make the transition to a new career path, or even into retirement.

Despite the uncertainties of the wider economic environment, an NHS practice that is comfortably fulfilling its contract with a proven income stream remains an attractive proposition to potential buyers. This is good news for practice owners, who are in the driving seat when it comes to determining their future.

Whatever stage you find yourself at – be it wanting to get away from the stresses of business ownership or deciding to give it all up and head for pastures new – it makes sound business sense to plan an exit strategy at the earliest stage possible.

Planning your exit
An ‘exit strategy’ is a term often used in business and financial circles and although it has a suggestion of finality about it, it does not necessarily refer to the time when an individual leaves the profession for good. An exit strategy is just as applicable to an individual selling a practice, brokering an associate buy-out or simply choosing to do something completely different.

The value of your practice is likely to form a significant part of your total assets and ultimately fund your future chosen lifestyle. So just as many of us make improvements to our homes to increase their value when the time comes to sell, it makes sense to maximise the value of your business to increase the profit from the sale of your practice.

Untapped potential in the practice
As well as continuing to meet UDA targets and controlling costs, in order to maximise turnover and profits it pays dividends to look at the untapped potential in your practice.

Fully maximise all chair time
An empty chair is a lost opportunity to generate revenue and actually costs the practice money as overheads and staff still need to be paid whether the chair is in use or not. If your surgeries are already working at full capacity, consider extending opening hours to create additional chair time.


 

It makes sound business sense to plan an exit strategy at the earliest stage possible continued growth throughout this year and on into the foreseeable future

 




Utilise your hygienists and therapists
This can generate far more profit than the use of associates alone. By concentrating on the most cost-effective treatment options profitability can also be increased.

Focus your efforts on high-grossing treatments
Maintaining or increasing the level of turnover in the practice can be achieved by reviewing those lucrative treatments and finding ways to further promote them to your patients.

Try to keep referrals in-house
If you refer just one dental implant a month at £2,500, this has a value of £30,000 per year, which often is revenue that can be ’lost’ to another practice. Consider bringing in an implant dentist, maybe one Saturday per month when the practice is normally closed, or more often if needed. For even better income opportunities, consider asking them to become an associate.

Don’t sit back
It can be tempting for dentists heading into retirement to reduce their time spent in practice, but this could be a mistake. A practice needs to be functioning at its peak to prove that it is a viable investment. Any signs of underperformance will be a red flag to a buyer, who may be concerned that you’re struggling to hit targets or hiding underlying inefficiencies.

Planning ahead
Today’s dentists are fortunate in that they are able to plan and execute an exit strategy much earlier than their predecessors.

Mediestates’ extensive and comprehensive understanding of the dental market and how it relates to individual circumstances allows the team to help plan and execute exit strategies at the earliest opportunity.

So, whether you want to sell outright or stay in the practice for years to come, using a specialist broker, such as Mediestates, can provide you with the knowledge and practical guidance to help you plan the exit strategy that is right for you, both now and in the future.

Posted by: Dean Barker on 15 Nov 2018

This agreement is in relation to MediEstates Limited introduction to a prospective sale of a business as a going concern. By registering through this agreement I agree to all terms set out below:

  1. To treat all information supplied by or on behalf of the Vendor in connection with the sale of the Business as confidential. Confidential information relates to: -the actual Vendors identity and all confidential information in respect of the Business; including but not limited to: any ideas, business methods, prices, accounts, finance, marketing, research, development, manpower plans, processes, market opportunities, intentions, design rights, product information, customer lists or details, employee's details, trade secrets, computer systems and software, and other matters connected with the products or services manufactured, marketed, provided or obtained by the Vendor, and information concerning the Vendor's relationships with actual or potential clients or customers and the needs and requirements of such clients' or customers' operations.
  2. Duties of Prospective Purchaser are:
    1. To take such reasonable security measures to protect the Confidential Information as it takes to protect its own confidential information.
    2. All communications are to be through MediEstates unless agreed.
    3. That they shall not, without the prior written consent of the Vendor, permit any of the Confidential Information to be disclosed, other than in confidence to its legal or professional advisers, to be copied or reproduced; to be commercially exploited in any way; to be used for any purpose other than in connection with the prospective purchase of the Business; and to pass outside the control of the Prospective Purchaser.
    4. The Prospective Purchaser must not jeopardise or re-direct the sale under any circumstances.
    5. That they will not contact any 3rd parties related to the business for which information has been provided, i.e. solicitor's, employees, accountants, clients.
    6. That they will not under any circumstances contact the Local Area Team or CCG regarding any business sale, by any means of media unless written permission has been granted by the current Vendor.
    7. To carry out own Due Diligence once any business purchase moves to forward, and accepts that MediEstates Ltd only supplies information provided by the vendor and is not responsible for its accuracy or completeness.
    8. To lodge a deposit held in a client account to secure a business sale and cease its marketing, which is refunded on completion.
    9. To not use any social media at all regarding business details.
  3. If you require finance to purchase your business, or need other financial services, MediEstates on your approval will refer you to an FA to assist you. MediEstates may be paid a fee for this service.
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