Dental Elite’s Luke Moore: “Getting the maximum for your practice”
Are you looking to secure the maximum value for your practice? Then first you need to understand the impact the current state of the market is having on valuation trends and values.
If you weren’t already aware, practice sales and acquisitions have been hugely affected in the last 18 months or so by several corporates who, due to underperformance and recruitment issues (amongst other things), have been closing or selling a number of their practices, some at a heavily discounted value. This has allowed independent buyers to come to the fore.
Importantly, however, it is not just corporates that have been struggling to recruit dentists and dental professionals. Practices all across the UK have experienced resourcing issues to some degree over the last 18 months or so, resulting in problems with UDA output and access to care.
Reasons for this include: fewer applications from EU citizens; delays in processing Performer Numbers; and a reduced UK workforce that isn’t large enough to replace outgoing professionals. Unfortunately, however, it’s not just an issue of recruitment. Businesses are also struggling to retain staff once they have them – predominantly because competing practices are using bigger remuneration packages to entice professionals to join their team.
As a result of all this, some practices are finding it much harder to maintain the same level of profit they had previously, which could have a serious impact on
growth in the future. If this is the case, goodwill values will likely be affected, potentially impairing a principal’s ability to grow and sell their practice. This suggests that if vendors are to get the maximum price, they must concentrate on demonstrating that they have a stable team, so retention and prompt recruitment is key.
Luckily, there are a number of steps that can be taken to grow and sell a dental practice – including reviewing expenditure. For instance, you could offer discretionary bonuses based on performance instead of a pay rise, helping to save money and increase profit margins. Alongside this, take a smarter approach to recruiting and retaining your team by implementing a three-pronged approach.
Firstly, attract candidates (active and passive) with competitive packages and through the appropriate channels; second, interviews are a two-way thing so sell your practice by highlighting the benefits of working there; and third, dedicate time to good onboarding practices to create a great environment that professionals want to work in.
Finally, get a practice healthcheck that includes an in-depth analysis of your dental practice and offers suggested changes that would help to boost the valuation price. Dental Elite offers this as a complimentary service, taking into consideration the impact of current trends and the state of the market. The dental landscape may be changing, but with the right support from a specialist broker and valuations agency and a savvy approach, you should hopefully be able to minimise losses and protect the value of your practice.