Business and financial
Buying a practice – two different views
Martyn Bradshaw from PFM Dental considers practice purchases from a buyer’s viewpoint and his own as an experienced sales agent
B
uying a practice can be lengthy and challenging. I asked a recent purchaser their opinion on the buying process, and I also offer my view as a
practice sales agent on the issues raised – in the form of ı0 top tips.
Why did you want to buy a practice? I’ve seen associate pay and job security come under pressure in the last few years and I didn’t want to be in a position where I had to take a pay cut. Apart from, that I liked the idea of buying a practice I could develop and put my own mark on.
How long were you looking? Overall, for about two years. I missed out on a couple of practices and was surprised at the competition. There seem to be a lot more buyers than practices, especially in Glasgow, Edinburgh and Aberdeen.
Was location important? Not especially, although I didn’t really want to be in a remote location. Being flexible about the location certainly opened up my options.
Were you looking for a specific type of practice and, if so, why? Yes. Buying an NHS practice was definitely a priority. I’ve worked in the NHS system for a few years and felt that this would be a stable base for my business. I’m developing the private fee income now that I’ve been in the practice for six months.
How did you finance your practice purchase? I borrowed money from a bank as well as putting in a deposit of about ı0 per cent. I used a broker to find the best finance deal, which was helpful as I was turned down by one high street bank initially.
What was the most challenging thing about buying the practice? It all took longer than I’d expected – about nine months from my offer being accepted to completion. There were a lot of hoops to jump through from the legal side.
Jon’s 10 top tips for prospective purchasers ı. One of the most challenging things
about buying a practice is finding the right practice. Most buyers have a specific prac- tice type in mind – NHS, private or mixed. Popular locations are the major cities with a higher concentration of dentists looking to buy – hence the competition for practices. 2. There are a few things a prospective
buyer can do to get ahead of the field, such as registering with practice sales agents and keeping a close eye on practices coming to market. 3. When viewing a practice, it is impor-
tant to create a good impression as the vendor may have a number of offers to choose from. Being flexible about the handover timescales and positive about the practice in general is likely to help here. 4. The more specific your requirements,
the longer it is likely to take to find a suit- able practice. However, as most dentists will work until retirement at the practice they buy, be patient and make sure the practice you purchase is right for you. 5. Solid finance arrangements are often
key to supporting an offer to buy a prac- tice. If you buy through a practice sales agent remember that the agent acts on behalf of the vendor. They have a duty to verify that the buyer has credible finance arrangements in place. The vendor may accept a lower offer from a buyer who can demonstrate finance is in place. 6. Most agents will issue sufficient finan-
cial information on the practice (usually by way of a prospectus) to allow buyers
Scottish Dental magazine 79
to approach banks prior to making an offer. Approaching the right bank and the right bank manager is important. Banks with dedicated healthcare lending depart- ments are most likely to understand your finance requirements and quickly provide an outline finance proposition. 7. Once an offer has been accepted, the
legal requirements of the purchase will take several months to complete. Solici- tors for the buyer and vendor will need to agree on a sale-purchase contract, which includes protection for the buyer and vendor ‘post purchase’. 8. Your solicitor will conduct ‘due
diligence’ on the business, which involves asking a lengthy series of questions. Failure of the vendor to provide adequate answers can lead to delays or even the transaction collapsing. Engaging a solicitor experi- enced in dental practice transactions is likely to speed up the process, especially where both you and the vendor instruct dental solicitors. 9. If the vendor is trading as a limited
company there are additional require- ments which can also cause delays. ı0. Despite the challenges, most buyers
are positive about practice ownership and find this a rewarding career path.
ABOUT THE AUTHOR
Martyn Bradshaw is a director of leading practice sales agents, PFM Dental, with offices in Edinburgh, York and Oxford. For information on practices for sale in Scotland, visit www.
pfmdental.co.uk
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92