Practice sales Selling or buying a practice? T
he figure ‘60’ has been popular lately with the focus on the Queen’s Diamond Jubilee, but it is also a figure that looms
in many dentists’ minds as an age at which – or by which – to retire. With many practitioners being members of the ‘Baby Boomer’ generation there are a significant number of dentists considering packing away the drill and mouthwash. But these individuals have worked
hard to build a good practice and are seeking to realise the value of what they have created – can they do so? Clearly the first thing to do is identify someone to sell to; it could be to younger partners, or it could be another practice looking to expand. Either way, the purchaser is likely to need some financial assistance and the reality is that the banks are lending at lower rates than pre- recession, when ı00 per cent loans
were not difficult to find. Now, 80 per cent is a good loan. Many practices now have to be
much more commercially orientated than in the past, with investment in IT and staff resourcing increasing all the time. In general, younger dentists are more oriented towards this approach and the need to invest. Therefore, those seeking to retire might look at the trade-off of selling at a slightly reduced rate, thereby avoiding the need to invest further in the practice. The purchaser can put together a business plan based around their investment intentions, with banks being more receptive to the returns identified in a business bought at a lower price but with growth potential.
The advice of an objective third party, such as an accountant, can be helpful. Realistic valuations of the busi- ness itself and of any property involved, plus creative struc- turing o f payments, can be effective in closing the lending ‘gap’ and he lp achieve a satisfactory o utcome for buyer and seller.
® Paul Thompson is a partner with accountants and business advisers, Scott-Moncrieff. To contact Paul email paul.
thompson@scott-moncrieff.com or phone 0141 567 4500
Paul Thompson
Scottish Dental magazine 41
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