As you well know, treatment planning is arguably the most important aspect of any successful dental procedure. It takes into account the patient’s health, what their desired outcomes are, your own competency, any potential risks or complications and, finally, costs and the treatment timeframe. Now, think of selling your dental practice in exactly the same way.
Selling your legacy is a hefty decision, and it might be one that you approach with trepidation. The selling pathway is made up of many different processes, all of which are important and must be conducted correctly to ensure a prosperous final result. One of the most time-consuming aspects of both sales and acquisitions is the due diligence process. It has quite the reputation, but it’s an essential stage that can make or break the sale. However, just think of it as another step in your sales plan. As long as you remain prepared and organised, you can ensure a smooth and successful sale.
Due diligence – it’s not your enemy
Due diligence is an important appraisal conducted by the buyer to find out as much as they can about their potential acquisition. It’s a vital step in the process, as it allows the buyer to determine exactly what they’re buying, and whether there are any potential risks regarding the business that they should know about. It may feel like you and your business are being intensely scrutinised. But see it from the buyer’s point of view – they’re planning to invest a large amount of money and time, so going from what they see at face value isn’t enough.
Due diligence is often conducted at the early stages of the transaction, once both parties have agreed on a deal in principle. The buyer’s solicitor will issue a due diligence questionnaire, and there is much to cover in this document. The buyer will likely want to know more about the property, the practice, equipment/compliance information, employment, money and insurance, among plenty more. It’s also worth noting that, to aid you during this process, it’s vital to employ a solicitor who has a background in the dental market. If you don’t, there will be a higher potential for mistakes and delays.
One of the key areas of interest will be the property. This includes information and essential documents on the office lease (if applicable), whether the property has planning permission, who owns the premises (yourself or a third party) and whether it’s in a good state of repair and condition. Then, information will need to be gathered about the practice itself, about its location, décor and its equipment. An inventory will most likely be required for equipment and tools, in addition to details of ownership of assets. Another key area will cover staff records, complaints, regulatory and patient information.
In the case of an adverse finding, the commercial viability of the practice may change. The buyer may seek a reduction in the purchase price, or obtain legal protection in the sale documentation, meaning you’ll be responsible to reimburse them for certain liabilities that could arise post-sale. In the worst-case scenario, the buyer may withdraw from the sale. But, if the due diligence process does highlight an issue, you’ll have a chance to rectify it or re-negotiate.
A career in dentistry will have taught you that being as prepared as possible is key, and it’s the same for the due diligence process. Do your homework and have your paperwork sorted as soon as possible (ensuring it’s in date and correctly filled in). Also, your buyer may be particularly pedantic, which is understandable as they’ll want to ensure they’re making a wise investment. So, this could prolong the process, with questions going back and forth. Make sure your responses are comprehensive, covering as much detail as possible, so that the buyer has as much information as they need and will be unlikely to come back with further questions.
Also, it’s important to have a specialist solicitor at your back. Because they know the field, they’ll be able to prepare you for what to expect, and ensure you get the most from your sale. Even better, a specialist sales and acquisition agency, such as Dental Elite, can give you the peace of mind that your sale is in the most capable hands. Dental Elite has years of experience helping dental professionals navigate the sales process, ensuring that their comprehensive services are expertly tailored to every one of their clients.
Put on a brave face
At the time of writing, there are many changes happening in the dental field, which may make selling your practice a particularly daunting proposition. Couple that with an arduous process like due diligence, and you may rethink putting your practice on the market. However, with careful preparation, organisation and the right support, you can sell your business with confidence.