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MediEstates Pharmacy - Valuations – not just for sellers
Valuations – not just for sellers


Valuations – not just for sellers


Investing in a dental practice is, in its purest form, the same as investing in anything else, be that a hedge fund, an ISA or a simple bank account.

Whatever the investment, it's unlikely that you would leave it unmonitored for several years without even thinking to see if its value had increased.

Most practice owners only think about valuing their business for a specific and particular reason – for example when considering selling – but a realistic, professional valuation can have many more applications than simply the desire for an immediate sale.

An annual valuation for example can assist with exit planning, even if that exit is some way in the future. It can also provide an understanding of what changes are required to increase profits in the latter stages of your career, giving time for any such changes to be made. It will also give comfort and confidence that the ultimate value of a practice will meet your needs and wants in retirement and also helps small groups to transition and acquire other practices which protects the whole business.

There are also many more insurance related reasons why an annual valuation can prove valuable. For instance, have you ever considered the impact on your practice should you suffer the loss of a key employee due to illness, accident or death? In the worst case scenario, this can turn a successful practice into a failing one and cause untold damage to the lives of the family and fellow employees left to pick up the pieces.

Take, for example, a practice that holds an NHS contract and relies solely on that income to keep the business running. If anything untoward should happen to the contract provider and the practice can no longer fulfil its obligations, the contract will be rescinded and the income will cease. However, the staff and the multitude of overheads to which the business is committed still remain and need to be paid.

And of course, the loss of a key person in a business applies equally to the private sector. A business that has been many years, even decades in the making, can suffer badly in such circumstances, with profits falling and increased workloads for the remaining staff.

Insurance providers have long understood the importance of protecting businesses from the loss of key personnel by offering insurance policies that provide an immediate lump sum to protect next of kin and the business itself from financial turmoil. Key man insurance is one such policy, designed to provide financial security when owners or key employees are unable to work due to illness (terminal or critical), accident or death.

This is just one example of an insurance product that will benefit from having up-to-date information when policies are renewed and an accurate valuation of the business, in this case, will ensure you have the precise level of insurance needed to protect your business.

For busy practice owners, having the time to undertake a valuation for insurance purposes can seem a lot like hard work, so having a broker do this for you makes good sense. Firstly, because it will be done in a timely manner, but also because it will be thorough and accurate and will ensure that should the worst happen you won’t be left short at a critical moment. At MediEstates we conduct a large number of practice valuations every year – of course many of these are for dentists looking to sell, but an increasing number are being produced for other reasons including insurance.

Ultimately, the right insurance cover is one that covers what matters to you most. But you also want peace of mind that your business can continue to operate both financially and culturally should the unexpected ever happen. An accurate, up-to-date valuation will help you keep on track when agreeing insurance premiums and help you plan the future of your business with confidence.
Posted by: Anne Barker on 26 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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