The process of acquiring a dental practice is long and often stressful, but is nonetheless an outstanding achievement. There are many options available, which can make choosing a suitable dental practice more challenging, alongside considerations such as the size and type of practice you’re looking for. Plus, with current social issues causing alarm across the country, professionals looking for a dental practice now have additional concerns they must take into account.
There is no right or wrong answer; however, it is important to choose a practice that is best suited to your budget, your way of working and your strengths, as well as taking into consideration your short-term and long-term plans.
NHS or private?
One of your first decisions will be whether to acquire an NHS, private or mixed practice, which will ultimately depend upon your experience and your future plans. Of course, new concerns have been brought to the fore over recent years compared to pre-pandemic, resulting in issues with recruitment and staff pay expectations, to name but a few, which must be considered as well.
Private practices can be attractive propositions for more entrepreneurial buyers, as there is the potential to expand treatment options, especially in larger practices. Statistics from our most recent Benchmarking Survey report show that laboratory fees and materials in private practices sit at almost 8% of total revenue, compared to NHS practices sitting below 5%. However, for NHS practices this could partly be due to the lower volume of work, as well as the type of work they produce compared with that of private practices. Lab fees are likely to rise again by the next survey, as NHS practices work through the backlog of patients.
NHS practices are generally considered as positive acquisitions for a range of buyers, as they usually have low patient turnover in addition to guaranteed income. However, as you well know, recruitment and retention in NHS practices are currently poor, just one of the many results of the pandemic and the increasing demands of the profession. For larger NHS practices, who require more associates to meet their NHS contracts, this is especially worrying. As a result, buyers may have to be more deliberate when choosing not just what type of practice to buy, but where. More urbanised areas will likely have a larger pool of professionals looking for work, whereas this may be smaller in more rural areas.
Despite this, NHS practices are still strong businesses, especially ones smaller in size; this is because the security of a definite cashflow every month is an attractive proposition, especially when you consider the turbulence of the last few years. Therefore, in places like London and the South East, competitive bidding remains for these kinds of practices, with the average multiple paid for them outweighing other kinds of practices.
Depending on the composition of the practice, acquiring a mixed practice will give you a combination of both private and NHS qualities. For instance, statistics from our latest Benchmarking Survey report show that staff costs for a mixed practice with a 53% NHS ratio sits at just over 17% of total revenue, compared to 20% and 15.6% for NHS and private practices respectively.
What else to consider?
Acquiring a dental practice, regardless of whether it’s private, NHS or mixed, has always been a lengthy process. With the rise in the cost of living, as well as the strain on dental care providers due to the pandemic, new buyers have even more to grapple with alongside processes for due diligence and the Care Quality Commission (CQC) changeover.
Owning your own dental practice still remains an impressive career milestone, and there are things you can do to ensure you make the right choice. You’ll want to make sure that your choice of acquisition suits your experience level and caters to your preferred way of working. The importance of specialist advice cannot be understated, especially in light of the current issues faced by the profession.
Don’t go it alone
With professional, tailored advice, you can receive guidance from a team who know the dental market inside out. Dental Elite has extensive experience and proficiency for acquisitions, recruitment and valuations, and is well-equipped to find you a practice that satisfies all of your needs and requirements. The expert team will help you navigate the changes in the dental market and reach your goals confidently.
There will undoubtedly be many fluctuations across the dental market in the coming months, and by the next Benchmark Survey report we’ll be able to see how the market has changed once again.
