Owning a dental practice – do it right
Owning your first dental practice is an impressive milestone in your personal and professional life. It is a long process, and being prepared is the key to making the transaction as smooth as possible.
So, what does the road to owning your own dental practice look like?
First things first
Once your offer has been accepted, the process of managing various different documents begins.
The Heads of Terms agreement usually commences at the start of the transaction, once the preliminary terms have been agreed and before the process of due diligence begins. Whilst this documentation is not obligatory, more often than not deals that do not have it have a significantly higher abortive rate. The Heads of Terms highlight all of the key commercial points that both the buyer and vendor have agreed to.
Immediately after the terms have been approved, the Care Quality Commission (CQC) application should begin, as it is commonly one of the slowest aspects of the transaction. This process involves an in-depth assessment of both the buyer and vendor, an enhanced DBS check, references and often an interview.
The legal side
The legal process can be challenging, as there are various different things to juggle at once.
The due diligence process is infamous for being the most difficult aspect of buying and selling a dental practice. Nonetheless, it is an integral stage in the transaction and will help you as the buyer to obtain everything you need to know about the business. This procedure commonly occurs at the beginning of the legal process.
The due diligence will cover key areas regarding the dental practice, including: the property, equipment, insurance, contracts, employees, litigation and associates. These areas will be thoroughly investigated, so you are fully confident to proceed with the sale. Working with an experienced dental solicitor is hugely advantageous as they will know exactly what to ask and what to look for during the due diligence process. This will save you significant time in the long-run and provide peace of mind that all bases are adequately covered.
The Sale and Purchase Agreement is the main document that solicitors will spend time negotiating. Some solicitors won’t even create the first draft until most of the due diligence enquiries have been dealt with, though others will get a draft in circulation earlier. This document will outline the terms of the sale, in addition to the obligations and liabilities of each party. A well-drafted Sale and Purchase Agreement will include: the purchase price, completion conditions, warranties and liability limitations.
Choosing the right lender is another important process as they will look at competitive rates, affordability and which bank best suits your requirements, depending on your long- and short-term goals. Stress testing potential practices will enable you to confidently put an offer on a practice, while also showing the vendor that you can realistically afford it. Lenders will want to build a clear picture of your professional and personal background, which may include them asking for your earnings, how you manage your personal finances, your business management experience and your current living situation. Generally, a deposit of 10% is required when purchasing a dental practice and the bank will finance the rest, although there are banks that will lend 100% of the value or accept a lower deposit.
The financing process is equally as important as the other aspects of the transaction. Acquiring the aid of a lender that understands the nature of your profession will help immensely, reducing the risk of complications and confusion further down the line.
Now, over to you
When you arrive at the point where contracts are exchanged, both you and the vendor are now legally committed.
As you are now nearing the end of the line, you can finally look forward to becoming the practice owner. It is certainly a long process, with many potential trials and tribulations along the way. However, by being prepared with the right help at hand, you can proceed with confidence. For expert guidance during your journey, Dental Elite provides exceptional services with a team of experts in the field. Plus, they offer a range of resources on their website, such as free guides that cover a range of topics, including what to expect when acquiring a dental practice. Regardless of your requirements, Dental Elite strives to minimise stress and help you achieve your goals assuredly and successfully.
Buying your first dental practice introduces you to a new area of dentistry, with a host of new skills and experiences involved. Setting off down the path of owning your own dental practice can be an epic ordeal. Challenges will arise, but by being sufficiently prepared for the road ahead, you can navigate these issues confidently and constructively.