Should I Buy Leasehold or Freehold?

In these episodes of the Dental Business Guide podcast, we take a look at the differences between leasehold and freehold properties and which one is better for a dental practice.

You can listen to all of the the Dental Business Guide podcast episodes here.

I often get the question should I get a leasehold or a freehold for a new start up practice? Whilst getting a freehold is something that many want, it’s not always the best premises to get.

Choosing how you own the place where you run your dental practice is a really important decision. There are two main ways people usually own property: leasehold and freehold. Each has its own good and not-so-good parts. The choice you make depends on your situation. In this guide, we’ll look into the differences between leasehold and freehold, their pros and cons, and what you should think about before making a final decision. Whether you’re just starting out or planning to move your practice, this guide will help you find the best way to own your dental space.

Understanding the difference between leasehold and freehold

When starting your dental practice, a big decision is whether to get a leasehold or freehold property. It’s crucial to understand the difference between these options to make a smart choice that aligns with your long-term goals and finances.

Let’s break down the terms. A leasehold property is like renting—you pay the owner to use the space for a set time. With a freehold property, you own both the land and building, giving you full control without dealing with a landlord.

Both options have their pros and cons. Leasehold properties often have lower upfront costs, which is great for new practices or those with limited funds. They also offer flexibility for moving or expanding. However, lease agreements come with restrictions, and you may face challenges when the lease ends.

On the other hand, owning a freehold property provides stability and potential value growth. You have full control to make changes and avoid ongoing rent payments. But the initial investment is high, and selling a freehold property can be more complicated than ending a lease.

Ultimately, the choice depends on your unique situation, finances, and long-term goals. To make a successful decision for your practice, carefully consider the pros and cons of each option and seek professional advice.

Click here to read our article on Should I Start or Buy a Dental Practice?

Pros and cons of leasehold for dental practices

When setting up or moving a dental practice, a crucial decision is whether to go for a leasehold or freehold property. Before you decide, it’s important to carefully weigh the pros and cons of each option.

Let’s look at the perks of leasing a dental practice building. One major advantage is the flexibility it offers. Leasing lets you choose a location that suits your needs, whether it’s in a busy commercial area or a quieter suburban spot. Leases also usually have shorter terms, making it easier to move or adjust to changing business needs.

Another plus is the lower initial costs linked with leasehold properties. Leasing generally requires a smaller upfront investment compared to buying a freehold property, making it especially beneficial for new dental practices or those with limited finances.

However, there are some drawbacks to leasehold properties that you should be aware of. The possibility of regular rent increases is a significant downside. Since leases often have set terms, landlords might raise the rent at the end of each term, impacting your profitability. You might also face restrictions on making changes to the property, as these alterations would need the landlord’s approval.

Moreover, leasehold properties come with the inherent risk of lease termination or renewal. If the landlord decides not to renew the lease or sell the property while you’re still there, you could encounter challenges based on your lease terms. Such situations have the potential to disrupt your dental practice, forcing you to relocate, which can be both time-consuming and costly.

In the end, whether you choose a leasehold or freehold for your dental practice depends on your specific circumstances and long-term goals. Analyzing your finances, growth expectations, and desired level of control over the property is crucial. Seeking advice from professionals like realtors, attorneys, and accountants can provide valuable insights and help you make an informed decision that aligns with your practice’s needs and aspirations.

Check out our podcast on How to set up or buy a dental practice

Flexibility in location and premises

When starting your dental practice, a big decision is whether to go for a leasehold or freehold property. This choice affects where you can set up and how you can use the space.

Location is the fundamental point when doing a start-up. If a freehold is available, ask yourself, why is it available in the first place? Is it because the current owner cannot rent it out, as it’s not in a great position or location? Or is it in a bad state of repair that needs much work to make it habitable?

Of course, a freehold in a strong location usually features a higher price tag, but sometimes you can get a good deal, but it’s rare, even in these times.

Leasehold properties offer flexibility in choosing a location. You can pick a spot that’s convenient for your patients, whether it’s in a busy city center or a bustling suburban area. Leaseholds often come ready to use, saving you money on setting up the space.

On the flip side, choosing a freehold property gives you long-term stability and control over your practice’s space. With a freehold, you own the entire property and can make any changes without asking the landlord. This lets you customize the space to fit your needs and create a unique environment that reflects your brand.

Consider your future plans and the growth potential of your dental practice. If you expect to expand your services or patient base, a freehold property may offer more room for growth compared to a leasehold, where you might be limited by the lease terms. However, keep in mind that freehold properties usually come with higher initial and ongoing maintenance costs, so it’s crucial to think about the financial side before deciding.

Ultimately, your specific needs and goals should guide your choice between a leasehold and freehold property. Consider factors like location, long-term plans, and financial feasibility as you weigh the pros and cons of each option. Making an informed decision ensures that you choose the option that best suits your practice and puts you in a good position for the long haul.

Lower upfront costs

When deciding between leasehold and freehold for your dental practice, the initial costs are a crucial factor.

Cheap rent, or a cheap freehold, usually means it is not going to be in a strong enough location to get the new patient visibility you desire, ultimately, you do get what you pay for. Whilst it may be tempting to get some premises for a squat, especially as there are so many empty units at the moment, do your research and make sure you choose a strong location with high visibility.

Leasehold arrangements usually mean renting a space for a set period, often with the option to renew the lease. Compared to buying a freehold property, leasehold options typically have lower upfront costs. Instead of a big lump sum payment, you’ll likely need to pay a security deposit or advance rent, making it more affordable for new dental practices or those with limited capital.

Moreover, leasehold agreements often make the landlord responsible for the property’s upkeep and repairs. This can shield you from unexpected expenses related to building renovations or fixes, as those are usually the landlord’s responsibility.

On the flip side, freehold properties involve buying both the building and the land. While this may require a significant upfront investment, there could be financial benefits in the long run. By owning the property, you have the potential for its value to increase over time, and you can also make changes or additions without needing approval from a landlord.

The decision between leasehold and freehold should be based on your specific situation, financial capacity, and the long-term goals of your dental practice. It’s crucial to carefully assess the upfront costs and consider how they align with your budget and plans.

Potential limitations and restrictions

When picking a leasehold or freehold property for your dental practice, it’s crucial to think about the potential downsides and restrictions that come with each choice.

One possible restriction of a leasehold property is the length of the lease agreement. Depending on what you negotiate with the landlord, you might only be able to use the property for a set period. This can limit your flexibility and long-term security, as you might need to rethink or find a new space when the lease ends. Also, leasehold properties often come with rules set by the landlord or property management, restricting certain activities or changes you can make.

In contrast, freehold properties give you ownership and control. Owning a freehold property means you can do whatever you want with the space without needing permission. This is especially valuable if you have specific needs for your practice layout or equipment. However, keep in mind that owning a freehold property also means taking on responsibilities and costs like property taxes, maintenance, and repairs.

Another potential obstacle to consider is the financial aspect. Leasehold properties often involve regular rental payments, which can impact your cash flow. On the other hand, buying a freehold property usually requires a larger upfront investment, including mortgage payments if financing is needed. To figure out which option is more financially viable for your dental practice, carefully assess your financial situation and projections.

Strong locations in town centers still command good rents. Yes, they may have dropped, but going in with a ridiculously low offer for a premium space may be tempting, but it’s likely to be ignored promptly too. Do your research properly, see who are the other occupiers, what terms can you realistically negotiate, are you in competition with others. Location is paramount when doing a start-up. Get this wrong and you will be facing an uphill battle from day one.

Ultimately, the choice between leasehold and freehold depends on various factors, including your long-term goals, financial capabilities, and the specific terms offered for each option. It’s advisable to consult with professionals like realtors, lawyers, and financial advisors who can provide valuable guidance and help you make an informed decision that aligns with your unique needs and circumstances.

Risk of rental increases and lease renewals

When deciding between a leasehold or freehold property for your dental practice, it’s crucial to think about the potential risks tied to rental increases and lease renewals.

Leasehold properties often come with the downside of regular rent reviews. These reviews can lead to significant hikes in rental costs, impacting your profit and long-term financial stability. It’s important to carefully review your lease agreement, especially regarding how often rent reviews occur and the potential magnitude of increases.

Lease renewals can also be a gamble for dental practice owners. When your lease term ends, negotiating a new lease with the property owner may be required. This can bring uncertainties and potential disruptions to your business operations. If property owners decide to raise rent, change lease terms, or not renew the lease at all, you might have to relocate your practice.

Choosing a freehold property, on the other hand, eliminates the risk of rental increases and lease extensions. As the sole owner of the property, you avoid the uncertainties that come with lease agreements. This provides more stability and allows you to plan for the long-term growth and success of your dental practice without worrying about unexpected changes in rental terms.

In the end, your dental practice’s specific situation and long-term goals should drive your choice between leasehold and freehold. It’s crucial to carefully weigh the potential risks and benefits associated with rental increases and lease renewals when making this important decision. Consulting with a legal expert and considering your financial capabilities will help you make an informed choice that best suits the unique needs of your practice.

Pros and cons of freehold for dental practices

Deciding between a freehold or leasehold property is a big deal if you want to own a dental practice. It’s crucial to think about the pros and cons of freehold before making a decision, even though both options have their perks.

One major advantage of owning a freehold property for your dental practice is the security it brings. You have the freedom to make any changes to the property without asking the landlord, as you fully own it with a freehold. This is especially helpful if you have long-term plans for your practice and want complete control over its physical space.

Additionally, owning a freehold property can be a wise investment. Property values usually go up over time, and if you decide to sell your dental practice later on, you might benefit from the increased property value. This can give you more financial flexibility and a significant return on your initial investment.

However, freehold ownership comes with its own considerations. The upfront cost of buying a property outright is a significant downside. It requires a substantial capital investment, which may be challenging for some dental professionals, especially those starting their practice or looking to expand.

Moreover, as the freehold owner, you’re solely responsible for the property’s upkeep. This means you’ll have to take care of any needed renovations or repairs, which could cost you more money and take up more of your time.

In summary, choosing a freehold property for your dental practice can provide a sense of security, investment potential, and full control over the space. However, the upfront costs and ongoing responsibilities of freehold ownership need careful consideration. By weighing the pros and cons, you can make an informed decision that aligns with your long-term goals and financial capabilities.

Did You Know?


  • Rarely owned by the dentist: A 2022 survey by the Dental Elite found that only 40% of UK dental practices are freehold, highlighting the prevalence of the leasehold model. (Source: https://dentalelite.co.uk/)
  • Potential hidden costs: Leasehold contracts often involve ground rent and service charges, which can significantly impact your annual expenses. (Source: https://www.ft-associates.com/)
  • Potential for additional income: Owning the freehold allows you to rent out unused space to generate additional income, such as by partnering with another healthcare professional. (Source: https://dentalelite.co.uk/)
  • Greater flexibility for expansion: Owning the freehold simplifies obtaining planning permission for property extensions or renovations to accommodate your practice’s growth. (Source: https://www.ft-associates.com/)
  • Impact on borrowing costs: Lenders typically offer lower interest rates for freehold properties, reducing your long-term financing costs. (Source: https://www.ft-associates.com/)
  • “Marriage value” can be significant: This additional value, reflecting the specific use as a dental practice, can substantially increase the property’s selling price. (Source: https://dentalelite.co.uk/)

Full ownership and control over the property

When starting your dental practice, one of the major decisions you’ll face is whether to have complete control over the property or go for a leasehold arrangement. This choice can have a long-term impact on the financial growth and stability of your practice.

Full ownership, also known as freehold, means you have total control over the property. You don’t need permission from a landlord to make any changes or improvements to meet your specific needs. This level of control allows you to create a space that reflects your practice’s brand and vision.

Moreover, full ownership offers the potential for long-term capital appreciation. As the property owner, you can benefit from any increase in its value over time, which can be a valuable asset for your business. Additionally, you won’t have to worry about rising rental costs or the possibility of being asked to leave when your lease ends.

However, it’s crucial to consider the financial impact of full ownership. Buying a property outright requires a significant upfront investment, which may not be feasible for every dental practice. Before choosing this option, carefully evaluate your financial situation and ability to secure financing.

Also, owning a property comes with additional responsibilities. You’ll be responsible for all costs related to upkeep, repairs, insurance, and property taxes. When assessing the financial viability of full ownership, it’s important to factor in these ongoing expenses.

In the end, the decision between full ownership and a leasehold arrangement depends on your specific circumstances and long-term goals for your dental practice. While full ownership provides unmatched control and potential financial benefits, it comes with a significant upfront investment and ongoing obligations. Take the time to weigh the pros and cons, consult with experts, and make an informed decision that aligns with the needs and expectations of your practice.

Potential for long-term financial benefits

When deciding between a leasehold or freehold property for your dental practice, it’s crucial to think about the potential long-term financial benefits. Each option has its pros and cons, so it’s important to assess which aligns best with your business goals and financial situation.

Leasehold properties often provide more flexibility in terms of location and budget. With a lease agreement, you can choose an ideal spot for your dental practice without the upfront costs of buying a property. This can be especially helpful if you’re just starting out or want to focus on marketing and equipment. Additionally, leasehold properties may come with shared maintenance responsibilities, reducing potential financial burdens in the long run.

On the flip side, freehold properties offer the potential for long-term financial stability and value growth. You have complete control over how the property is used and developed because you own it. You can benefit from both rental income and potential capital gains as property values increase over time. Owning a freehold property also gives you the flexibility to make changes and improvements without needing permission from a landlord.

However, the financial implications of owning a freehold property should be considered. Upfront costs, such as a larger initial investment and ongoing maintenance expenses, need to be factored into your decision-making process. Additionally, the property market can be unpredictable, and the value of your freehold property may fluctuate over time, impacting your long-term financial benefits.

In the end, the choice between leasehold and freehold for your dental practice depends on various factors, including your financial capabilities, business objectives, and long-term plans. To thoroughly evaluate your options and make an informed decision that aligns with the requirements and goals of your practice, it’s recommended to consult with a property specialist or financial advisor.

Higher upfront costs and maintenance responsibilities

When choosing between leasehold and freehold for your dental practice, a crucial factor to consider is the higher upfront costs and ongoing maintenance responsibilities associated with each option.

In the case of a leasehold, you might need to pay a lease premium and other upfront expenses like agent and legal fees. This initial financial commitment can be significant, requiring careful financial planning. You might also have to provide a personal guarantee or a rental deposit, adding to the initial costs.

Moreover, as a leasehold tenant, you’re responsible for ongoing upkeep. This includes following lease terms related to maintenance and improvements, as well as handling property repairs and maintenance. These costs vary based on the property’s condition and lease agreement terms. It’s important to factor in these ongoing costs when considering a leasehold option for your dental practice.

On the flip side, freehold ownership comes with a higher upfront cost but eliminates the need for ongoing rental payments. When purchasing a freehold property, you should consider the purchase price, legal fees, inspections, and potential renovation costs. Although the initial investment may be higher, you gain the advantage of complete ownership and control over the property.

Maintenance responsibilities for a freehold property rest solely on the owner. As the owner, you have the freedom to manage and maintain the property according to your preferences and needs. However, it’s crucial to allocate sufficient funds for any necessary repairs or improvements over time.

Your preferences, long-term goals, and financial situation will all play a role in deciding between leasehold and freehold for your dental practice. Before making an informed decision about which option is best for your dental practice, carefully evaluate the higher initial costs and maintenance obligations associated with each option.

Limited flexibility for relocation

When deciding between leasehold and freehold for your dental practice, consider how much flexibility you might need for potential moves.

With a leasehold property, you’re bound by the lease agreement’s terms, often for a set period. If you decide to relocate your dental practice during the lease, you could face challenges and costs associated with breaking the agreement. Moving a dental practice involves keeping patients, finding a suitable location, and transferring equipment and records. So, if you anticipate needing flexibility in the future, a leasehold property might not be the best fit.

On the flip side, opting for a freehold property provides more freedom and control. You can move your dental practice to a new location without being tied to a lease agreement because you own the property and can sell or lease it. This flexibility is valuable if you foresee the need to expand, downsize, or relocate your practice.

However, owning a freehold property comes with its own responsibilities, like covering the costs of repairs, upkeep, and property taxes. Owning a dental practice can be expensive, and it’s crucial to keep these factors in mind.

Are freeholds available in the UK? It depends where you are in the country. If you are in central London, then there’s not a lot of freeholds around. There are mostly leaseholds. But if you are out outside London, then there can be freeholds available. When people are looking at a leasehold, they seldom ask if the freehold is available, because very often the seller owns the freehold. Now, initially, they might not want to sell it, but when they realise how much it’s actually worth, they might want to sell it. And also just putting that idea into their head makes a big difference. And probably there are more freeholds becoming available around the country, mainly because shops and offices are becoming more vacant and high streets are becoming more occupied by service industries. So there’s every opportunity, especially if someone owns, let’s say they have four or five shops in a row, and three of them are vacant. You got to look at that and say, well, they’re not getting any rent. So they might be willing to sell one. So it’s always worth asking.

Ultimately, the choice between leasehold and freehold for your dental practice depends on various factors, including your long-term goals, financial situation, and the flexibility you desire. Carefully weigh the pros and cons of each option and consult with professionals, such as realtors and financial advisors, to make an informed decision that aligns with your specific needs and circumstances.

Factors to consider when choosing between leasehold and freehold

When deciding between leasehold and freehold for your dental practice, there are key factors to consider. Understanding the pros and cons of each option can help you make a well-informed decision aligned with your practice’s long-term goals.

Firstly, assess your financial situation. With freehold ownership, you have full control over the property and no ongoing rent payments. However, purchasing a property outright requires a substantial upfront investment, which might be challenging for many dental practices, especially those in their early stages.

On the other hand, leasehold arrangements offer more financial flexibility initially. Leasing allows you to save money that can be allocated to essential aspects of your practice, like staff and equipment. Nevertheless, carefully review the lease agreement, including rental terms, renewal options, and any potential restrictions imposed by the landlord.

Next, consider your long-term strategies. Leasing may be preferable if you plan to expand your dental practice or anticipate a future move. Shorter lease terms can help you assess your practice’s viability before committing to a long-term property investment. However, freehold ownership provides stability and the potential for property appreciation over time.

Also, factor in market dynamics and location. Evaluate the cost and availability of suitable properties in your desired location. Purchasing a freehold property can be a good investment, especially in sought-after areas with limited options. Leasing, on the other hand, offers flexibility and reduces financial risks in areas with a volatile market or uncertain growth prospects.

Lastly, seek professional guidance from real estate experts or attorneys experienced in commercial property transactions. They can guide you through the intricacies of leasehold and freehold arrangements, ensuring you are aware of your legal responsibilities, potential challenges, and negotiation opportunities.

The choice between leasehold and freehold for your dental practice depends on factors such as your financial capacity, long-term plans, market conditions, and preferences. By carefully considering these aspects and seeking professional advice, you can make an informed decision that best aligns with the needs and goals of your practice.

Long-term goals and plans for the dental practice

When deciding between leasehold and freehold for your dental practice, consider your long-term goals and plans. The type of ownership you choose can significantly impact the future stability and growth of your practice.

If you have a clear vision of expanding your practice, adding new services, or even opening multiple locations, freehold ownership provides greater flexibility and control. Owning the property outright allows you to make structural changes, expand the space, or implement necessary alterations without seeking permission from a landlord. This level of independence is valuable when customising your practice to meet specific needs and accommodating future growth.

On the contrary, a leasehold arrangement may be more suitable if your long-term plans focus on stability, maintaining your practice’s current size, and scope. Leasing offers advantages such as easier relocation in emergencies, lower maintenance costs, and reduced initial expenses. This option provides more flexibility in changing your practice’s location or downsizing if the need arises.

Consider the financial implications as well. Purchasing a freehold property requires a significant initial investment, including a down payment and mortgage payments. On the other hand, leasing typically involves monthly rental payments, which may be more manageable for some dental practices, especially those in their early stages.

Evaluate the local market conditions and trends. If property values in your area are rapidly increasing, a freehold property could be a good long-term investment with the potential for appreciation. However, if the market is uncertain or property values are stagnant, leasing might be a more prudent choice, helping you avoid potential financial risks associated with property ownership.

Understanding your long-term goals and plans for your dental practice is crucial when choosing between leasehold and freehold. By carefully assessing your growth potential, financial capabilities, and market conditions, you can make an informed decision that aligns with your vision for the future of your practice.

Financial considerations and budget constraints

When deciding between leasehold and freehold options for your dental practice, your financial situation and budget constraints are crucial factors. Both choices have their pros and cons, so it’s important to thoroughly examine the details before making a careful decision.

Leasehold arrangements typically involve renting a space from a landlord for a set period, often several years. Compared to purchasing a freehold property, this option usually requires a lower initial investment. Leasehold agreements may also provide more flexibility, making it easier to move or expand your practice if necessary.

However, it’s crucial to fully assess the financial implications of leasing. Consider monthly rental expenses, additional fees or service charges, and the possibility of lease increases over time. Renting may result in long-term costs that could impact your practice’s profitability, especially if rental rates significantly rise.

On the other hand, freehold ownership gives you complete control over your practice’s premises. It offers stability and the potential for long-term investment. Purchasing a freehold property allows you to potentially benefit from property appreciation over time and build equity.

Nevertheless, acquiring a freehold property requires a substantial initial investment, including higher mortgage payments, legal fees, and down payments. It’s important to consider the impact on your cash flow and overall budget when assessing your financial capabilities.

A financial advisor or accountant can assist you in evaluating your financial situation and provide insights into the long-term financial implications of each option, helping you make an informed decision. Additionally, consider your practice’s growth plans, future needs, and how the chosen course of action aligns with your business objectives.

Remember that every dental practice is unique, and what works for one may not work for another. By carefully assessing your financial considerations and budget limitations, you can make a decision that best suits your practice’s needs and lays a solid foundation for its future success.

Location and market dynamics

The success of any dental office relies heavily on its location. It can impact how accessible, visible, and busy your practice is. When deciding between leasehold and freehold options for your dental practice, it’s crucial to thoroughly analyse the location and market dynamics of the area.

Start by assessing the demographics of the location. Look at factors like population density, age groups, income levels, and overall dental health awareness in the area. Understanding your target market will help you estimate the potential patient base and the demand for dental services.

Market dynamics are equally important. Research the local competition, identify the number of existing dental practices, and understand their specialties. This insight will help you gauge the level of competition you might face and assess the market saturation. Additionally, explore the area’s potential for growth, considering any upcoming changes or developments that could impact the demand for dental services.

Consider accessibility and convenience factors. Evaluate proximity to public transportation, parking availability, and major roads. An easily accessible location with ample parking options can attract more patients and enhance their overall experience.

The visibility of the practice is another aspect to consider. Being in a popular commercial area or on a busy street can increase brand awareness and attract new patients. However, if your practice relies heavily on referrals, being situated in a medical complex or close to other healthcare providers may be advantageous.

In summary, conducting a thorough analysis of the location and market dynamics is crucial when choosing between leasehold and freehold options for your dental practice. Understanding demographic factors, competition, growth potential, accessibility, and visibility will help you make an informed decision that aligns with your practice goals and target market.

Click here to read our article on How to market a dental practice.

Personal preferences and risk tolerance

Choosing between leasehold and freehold for your dental practice involves considering your personal preferences and risk tolerance. These factors are crucial in determining the best option for your practice, as each choice comes with its own set of advantages and disadvantages.

Some dentists may prefer the flexibility and lower upfront costs associated with a leasehold arrangement. Leasing allows you to occupy a space without the long-term commitment and financial burden of purchasing a property. It provides an opportunity to test the viability of a location or practice before making a full commitment. Additionally, lease agreements often include maintenance and repairs as part of the contract, relieving you of these responsibilities.

On the other hand, dentists who value stability and long-term investment may lean towards freehold ownership. Complete control over your practice’s location and the ability to make necessary changes or improvements come with owning the property outright. Furthermore, it offers the potential to build equity and generate additional income by renting out unused space.

Considering your risk tolerance is also crucial. Property ownership entails risks such as market fluctuations and responsibility for upkeep and repairs. If you are willing to take on these responsibilities and have a higher risk tolerance, freehold ownership might be a better fit for you. Conversely, if you prefer to focus solely on your dental practice and have a lower risk tolerance, leasing may be a more suitable option.

Ultimately, the decision between leasehold and freehold depends on your personal preferences, financial situation, and the long-term goals of your dental practice. Carefully evaluating your needs and weighing the pros and cons of each option will help you make a decision aligned with your vision for the future of your practice.

Examples of dental practices choosing leasehold or freehold

Let’s explore some examples to help you make an informed decision on whether to choose leasehold or freehold for your dental practice. These case studies offer valuable insights into the experiences of dental practice owners who have opted for these choices in the past.

Case Study 1, keeping costs lower: Dr. X, a well-trained dentist, decided to establish her own dental clinic in a bustling downtown area. After careful consideration, she opted for a leasehold property. Her decision was mainly influenced by the prime location of the building, ensuring a continuous flow of potential patients. By choosing a lease, Dr. Smith avoided the high initial costs associated with purchasing a freehold property in such a sought-after location.

Case Study 2, more control: Dental Group X, a multi-location group practice, chose the freehold option for their main clinic. With plans for long-term customization and expansion to accommodate their growing patient base and specialised services, they wanted the freedom to make necessary changes without landlord approval. Owning the property gave them control, allowing them to save costs in the long run and have more say in their practice’s physical space.

Case Study 3, more flexibility: Dental Practice X, a newly established dental practice opted for a leasehold property in a suburban area. As a startup, they were attracted to leasing due to lower initial costs. The flexibility in lease terms allowed them to relocate or expand as their practice grew. This choice enabled them to focus their initial investments on acquiring cutting-edge equipment and hiring skilled staff.

These case studies highlight that factors such as location, financial considerations, long-term goals, and the need for flexibility all play a role in the decision between leasehold and freehold ownership. By examining your specific needs and learning from real examples, you can make an informed decision aligned with the unique circumstances and expectations of your dental practice.

Expert advice and considerations from industry professionals

When deciding between leasehold and freehold options for your dental practice, it’s crucial to seek guidance from experts and consider the insights of professionals in the field. These specialists can provide valuable advice based on their experience and knowledge of the dental industry.

Financial considerations are paramount. Consulting with a financial advisor specializing in real estate and business properties can help you understand the long-term financial implications of each option. They can analyze your practice’s financial health, projected growth, and market conditions to determine which option aligns better with your goals.

Additionally, connecting with a commercial real estate agent experienced in dental properties is a wise move. They can offer insights into your location, market trends, and potential opportunities that may influence your decision. Their expertise can help you assess the pros and cons of leasehold and freehold properties in specific areas and identify any potential challenges or advantages.

For legal aspects and consequences related to leasehold and freehold options, legal professionals, particularly those specializing in commercial real estate, can provide invaluable assistance. They can review contracts, lease agreements, and property documents to ensure you are fully aware of your rights and any limitations as a tenant or owner.

Industry associations and dental practice experts can also offer valuable insights into the practical considerations of buying or leasing a dental practice. They can provide information on licensing requirements, regulatory compliance, and operational considerations tailored to the dental profession.

In conclusion, seeking advice from these industry experts will help you make an informed decision that considers market conditions, growth plans, location, legal considerations, and other factors crucial to the success of your dental practice. Their expertise will ensure that you choose the option that best suits your unique needs and goals.

Assessing the potential return on investment for leasehold and freehold options

When deciding between leasehold and freehold options for your dental practice, it’s crucial to assess the potential return on investment. This evaluation will help you determine the option that best aligns with your long-term success and financial goals.

When considering a leasehold option, carefully examine the terms and conditions of the lease agreement. Factors like the lease term, lease accelerations, and potential limitations affecting your practice’s growth should be taken into account. Additionally, assess the costs associated with leasehold improvements and ensure they fit within your budget.

On the other hand, opting for a freehold property means you have complete ownership of the premises, providing stability and the potential for long-term financial gains. However, it’s vital to evaluate the initial investment required to purchase the property and any potential ongoing costs for maintenance and repair.

A lot of people look at the asset value and say, oh, that’s a marvellous asset value, but then look at the damage to kind of cost you. So, if you’re buying a three- or four-pound freehold, as opposed to buying a 2-million-pound freehold, there’s a big difference in cost. So, you’ve got to be careful. The lenders will want to look at what profit the business makes, how that will play out, how profit will be distributed between the owner of the business because obviously, you need to get paid for doing the work, and also the bank. And they will build certain things into that, and they will build certain buffers and reservations in there to protect them and to protect the owner. There are things other people don’t understand, they think the rent or the business can afford just to cover that mortgage but, in most cases, the banks will want that covered one and a half, one and a quarter time, because that buffer allows for interest rates to go up even further in and not hurt the business. If you’re buying the business without the freehold, obviously, they require a huge amount of information. Because they’re going to lend it unsecured. 

The lenders will lend you the money for a freehold for over 20-25 years, on average, sometimes a bit longer. If you’re buying the practice at the same time, they will often then give you 20 years to repay the purchase price of the practice as well. Whereas if it’s leasehold, it will be a maximum of 15 years. So that extra five years would bring down your costs on purchasing the actual business quite considerably. The fact is that on most freeholds when you’re buying premises for your binding existing practice, lenders will give you 100%. So you haven’t got to put a deposit down and that is a huge advantage. Because if you are doing a startup, for instance, any sort of startup business, the banks will then lend you 70%. So being an owner gives you the advantage of them lending you all the money, so you don’t put any money in yourself for the freehold, you only have to find the money for the purchase of the business and you get the extended term for the actual business as well.

To make an informed decision, consider conducting a thorough cost-benefit analysis. Calculate the expected return on investment for both leasehold and freehold options, taking into account factors such as your practice’s expected growth, market trends, and the potential resale value of the property.

Seeking advice from professionals, such as financial advisors or commercial real estate specialists, is advisable. Their expertise can provide valuable insights and guidance in navigating the complexities of evaluating the potential return on investment.

Remember that every dental practice is unique, and what works for one may not work for another. By carefully assessing the potential return on investment for leasehold and freehold options, you can make an informed decision aligned with your practice’s financial objectives and set the groundwork for its long-term success.

Practical tips for negotiating lease agreements or purchasing a freehold property

When deciding between leasehold and freehold for your dental practice, it’s crucial to consider the practical aspects of negotiating lease agreements or acquiring a freehold property. Utilise these tips to navigate the process and make an informed decision that aligns with your practice’s requirements.

  1. Clarify your long-term goals: Before entering negotiations or making purchases, have a clear understanding of your dental practice’s long-term objectives. Plan for growth, potential expansion, and financial security. This clarity will help you determine which option aligns better with your goals.
  1. Seek professional advice: Consult with experts like a dental-focused commercial real estate agent or real estate attorney. Their expertise can provide valuable insights and guidance throughout the buying or negotiating process, ensuring informed decisions based on accurate information.
  1. Analyse the local market: Thoroughly investigate the local real estate market, including lease rates and property prices for dental practices. Understanding market dynamics will empower you to negotiate or purchase with confidence.
  1. Evaluate lease terms or freehold conditions: Carefully review the terms of a lease agreement or the conditions for purchasing a freehold property. Pay attention to any restrictions that may impact your dental practice, such as rent increases, lease duration, and maintenance obligations. Ensure the terms align favourably with your practice’s requirements.
  1. Negotiate favorable terms: If opting for a leasehold property, negotiate the details of the lease agreement. Work closely with your agent or attorney to secure favourable conditions, such as rent caps, renewal options, or the inclusion of necessary equipment or fixtures. These terms can significantly impact your dental practice’s long-term success and profitability.
  1. Consider financial aspects: Compare the costs associated with both options. Contrast leasing costs, such as monthly rent and maintenance, with the expenses of purchasing a freehold property, including mortgage payments, insurance, and property taxes. Evaluate your practice’s income, budget, and long-term financial projections to make an informed decision.

Remember, your dental practice’s choice between leasehold and freehold ownership is significant and can impact its success. By following these helpful tips and seeking professional advice, you can confidently navigate the negotiation or purchasing process and select the option that best suits your practice’s needs and goals.

Our Expert Opinion

Sadly, I have seen too many people focus on buying a freehold for their dental clinic at the detriment of getting the right location.

If you are going to be running a dental clinic the most important thing is to get the location right as this will help the business grow and thrive.

Often the best locations are not available as a freehold but instead as a leasehold. In my view, go for the best location to make your business work. However, if the freehold is available, and you can fund it, then of course buying the site can be a good idea if you are certain on the location.

One good idea we tell our clients is if they find a location, take the leasehold, but have drawn up in the agreement that if you the landlord does decide to sell, that you have the first right of refusal to purchase it. This can allow you to set up your business under a leasehold and then potentially down the line buy the freehold.

Bottom line, focus on the location to make your clinic thrive, and if the freehold is available then go for it – otherwise tread carefully!

Conclusion: Making an informed decision for your dental practice’s future

In the big picture, choosing between leasehold and freehold for your dental practice is a decision that should not be taken lightly. It requires careful consideration of various factors, including your long-term goals, financial capabilities, and the specific needs of your practice.

For those who are starting out or uncertain about future plans, leasehold might be attractive due to its flexibility and lower initial costs. Leasing allows you to use the space for a defined period, offering the option to relocate or expand as your practice develops. However, a thorough review of the lease agreement is crucial to ensure it aligns with your practice’s goals and is financially viable, considering factors like lease term and rent escalations.

On the flip side, freehold provides ownership and stability. It eliminates the risk of rising rental prices and grants full control over your practice’s location. Property ownership can also present future investment opportunities. Nonetheless, it comes with a significant upfront investment and ongoing maintenance costs, making it unsuitable for all dental practices.

Ultimately, the decision between leasehold and freehold should be based on a comprehensive assessment of your practice’s unique circumstances. Seeking professional advice from a commercial property expert and financial advisor is advisable to evaluate the financial implications and long-term viability of each option.

Remember, choosing the right property arrangement for your dental practice can significantly impact its success and growth. Making an informed decision sets a solid foundation for your practice’s future, creating a conducive environment for delivering quality dental care to your patients.

Additional resources and references for further exploration

There are numerous extra sources and references available to help you make a well-informed decision if you’re still unsure about choosing between a leasehold or freehold option for your dental practice. To learn more about the pros and cons of each option, consider exploring these resources.

Connecting with industry experts, such as real estate professionals or property advisors specialising in commercial properties for dental practices, is a valuable resource. With their market experience, they can offer tailored guidance based on their knowledge.

Additionally, there is a wealth of online articles, forums, and blogs discussing leaseholds and freeholds in the context of healthcare practices. These resources often feature case studies, expert opinions, and real-world examples, providing deeper insights into the implications and factors associated with each option.

Industry affiliations and associations related to dentistry may have resources available to their members. These resources, including publications, webinars, and workshops on property ownership, can offer valuable insights from dental professionals and assist in understanding the nuances of each option.

Lastly, engaging in conversations with other dental practice owners who have navigated the decision between leasehold and freehold ownership can be beneficial. Their firsthand experiences can provide practical advice and a better understanding of the potential challenges and benefits associated with each choice.

By utilising these additional resources and references, you can ensure that you have all the information needed to make a well-informed decision aligning with the specific needs and goals of your dental practice.

Ultimately, the right choice depends on your unique situation and long-term goals. Each option has its pros and cons. By thoroughly pondering the factors highlighted in this post—like financial implications, flexibility, and potential for future growth—you’ll be equipped to make a well-informed decision that aligns with your dental practice’s needs. Remember, seeking advice from a real estate agent or attorney is crucial to ensure the best decision for your practice’s future prosperity.

Buying a Dental Practice: Get Started

When buying a dental practice (especially if it’s for the first time), you need the competent hands of qualified professionals. Not only have we been helping the UK’s dentists to buy, start and sell dental practices for over 20 years, we are dental practice owners ourselves! We know what it takes to buy the right dental practice, we can help you find it, buy it and get it up and running.

Book a free, no-obligation consultation with one of our team at a time that suits you (including evenings). We’ll call you back and have a chat about how we can help buy your dream practice.

With Samera Business Advisors you can rest easy knowing that your investment is secure and your future is brighter. Contact us today so we can help plan for your tomorrow.

Learn More: Buying a Dental Practice

For more information please check out the articles and webinars in the buying a dental practice section of our Learning Centre like the Guide to Buying a Dental Practice.

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The Guide to Buying a Dental Practice

Buying a dental practice is the most thrilling, and the most difficult, aspect of your professional life. Providing vital oral healthcare and cosmetic treatments to the public both rewards you and helps local communities.

Whether you are buying your first practice or you are building a dental group, Samera Business Advisors are here to help you to achieve your goals and build your future.

We’ve been helping the UK’s dentists start their own dental practices for nearly 20 years and, as dental practice owners ourselves, we’ve learned a thing or two about buying dental practices.

For our friends and colleagues who are looking to embark on the journey of dental practice ownership, we hope this guide helps to start you on the path to your future in dentistry!

Click here to read more about why dentists want their own practices.

Starting or buying a dental practice can be a big task, especially if you’re new to the field. The dental market is always changing, so it’s important to stay updated on the latest trends and rules. In the UK, the dental business is growing, and there’s a high demand for good dental services. However, finding the right dental practice to buy can be challenging.

In this guide, we’ll give you all the information you need to understand the dental practice market in the UK. We’ll cover everything from current market trends and regulations to finding the right dental practice that fits your needs and budget. Whether you’re a first-time buyer or an experienced professional looking to expand your business, keep reading to learn how to navigate the dental practice market.

The Current State of the Dental Practice Market in the UK

The dental practice market in the UK is always changing and growing. More dentists are thinking about owning their own practice, whether it’s starting their own practice or expanding an existing one. Whether you’re a new dental graduate looking to set up your own practice or an experienced professional aiming to acquire one, it’s crucial to understand the current state of the dental practice market.

Recently, the dental industry in the UK has seen significant changes. One key factor is the increasing focus on oral health and the growing awareness among the public about the importance of regular dental care, as well as the difficulties faced by many patients in getting NHS dental care. This has led to a higher demand for private dental services like check-ups, cosmetic procedures, and specialized treatments.

Another important factor shaping the market is the changing demographics of the UK population. With an aging population and longer life expectancy, there’s a growing need for dental services that cater to the specific needs of older adults.

Advancements in dental technology and treatment methods have also transformed the industry, offering new opportunities for practitioners to provide high-quality and efficient dental care. Innovations like digital imaging, CAD/CAM systems, laser dentistry, and implantology have not only improved patient outcomes but also changed the way dental practices operate, making many highly specialised in the treatments they offer.

However, despite these opportunities, there are challenges in the dental practice market. The rising costs of running a dental practice, including overhead expenses, regulatory compliance, and insurance requirements, pose financial obstacles for both newcomers and established professionals. Moreover, the competitive nature of the market means that dental professionals must stay updated on the latest trends and developments to attract and retain patients.

In this comprehensive guide, we’ll delve deeper into the various aspects of buying a dental practice in the UK. From understanding the key factors to consider when evaluating potential practices to navigating the legal and financial aspects of the acquisition process, this guide aims to provide aspiring practice owners with the knowledge and tools needed to make informed decisions in the ever-changing dental practice market.

Action Points:

  • Conduct a thorough market research assessment of the areas you in which you want to buy.
  • Assess and be honest to yourself about your financial situation.
  • Develop a detailed business plan.
  • Seek professional guidance from a dental practice sales agent.

Understanding the different types of dental practices available for purchase

When thinking about buying a dental practice, it’s important to understand the different types available for purchase. Each type has its own unique qualities, and making an informed decision will greatly impact your success as a practice owner.

  1. Solo Practice:

This is a dental practice owned and operated by a single dentist.

It allows complete independence and control, making it a popular choice for dentists who prefer working on their own.

  1. Partnership Practice:

Involves two or more dentists owning and running the practice together.

This arrangement allows for shared responsibilities, accountability, and financial risks. It’s great for dentists who want to collaborate with colleagues and share costs.

  1. Group Practice:

Involves multiple dentists working together under a single practice name or brand.

These practices often have a centralized management structure, providing operational efficiencies and support services. They may offer a wider range of dental services and the potential for more patients.

  1. Associateship:

A form of employment where a dentist works under the ownership of another dentist or practice.

Dentists can gain experience, build their patient base, and learn from established professionals. It can be a stepping stone to owning a practice in the future or a long-term career choice.

  1. Specialist Practice:

Focuses on providing specific dental services, such as orthodontics, periodontics, endodontics, or oral surgery.

These practices require additional training and expertise in specific areas of dentistry. Buying a specialist practice can be a rewarding opportunity for dentists with specialized skills or those looking to expand their service offerings.

Understanding these types of dental practices will help align your goals, preferences, and skills with the right practice. It’s crucial to carefully evaluate each option, considering factors like your experience, financial capabilities, desired level of independence, and long-term objectives. Taking the time to research and consult with professionals in the field will ensure you make an informed decision and position yourself well in the dental practice market.

Action Points:

  • Solo Practice Analysis: If considering a solo practice, evaluate your readiness for complete independence. Assess your ability to handle both the clinical aspects and the business management side of running a practice. This includes financial management, staff hiring, and patient acquisition strategies.
  • Partnership Practice Considerations: When thinking about a partnership practice, it’s crucial to identify potential partners whose vision, work ethic, and business goals align with yours. Draft a clear partnership agreement that outlines roles, responsibilities, profit sharing, and conflict resolution mechanisms.
  • Group Practice Dynamics: For those interested in a group practice, research the operational structure and management systems of existing group practices. Understand how patient care, administrative tasks, and financial responsibilities are divided among the dentists. Consider the scalability and diversity of dental services offered.
  • Associateship Pathway Exploration: If leaning towards associateship, look for practices that offer growth and learning opportunities. Evaluate the terms of employment, including the scope for future partnership or ownership possibilities, mentorship availability, and the practice’s patient demographics and case types.
  • Specialist Practice Viability Assessment: In case of a specialist practice, conduct a market analysis to gauge the demand for the specialized services you intend to offer. Ensure that you have the required certifications or are prepared to invest in additional training. Also, consider the potential referral networks and collaborations with general dental practices.

How Long Does it Take to Buy a Dental Practice?

The short answer to this question is: it takes as long as the buyer and seller allow it to take.

Like any important transaction, buying a dental practice hinges on whether or not the buyer and seller can agree upon a price and contract terms. As the buyer, you are expected to make the initial offer on the practice, with negotiations to follow.

However, there are many tasks that you, or a representative like Samera Business Advisors, must perform in order to make sure that your transaction is legal and your resources are secure. These include:

Factors to consider when buying a dental practice: location, patient base, and competition

When thinking about buying a dental practice in the UK, there are important things to consider that can greatly affect its success. These factors should be carefully thought about during the decision-making process.

  1. Location:

The first thing to think about is where the dental practice is located. A convenient and easily accessible location is crucial for attracting and keeping patients. It’s best if the practice is in a well-populated area known for dental services. Being close to public transportation and having enough parking options can also make it more convenient for patients.

You need to be honest and realistic about your goals. Most of you may want to own a practice on Harley Street and live in Central London, but how realistic is that? If you want to own a practice at a good price, you may need to consider living in a part of the country you never envisioned yourself in.

You’ll need to reconcile your business goals with your lifestyle and family goals.

  1. Patient Base:

Another important factor is the existing patients of the dental practice. Understanding the demographics of the current patient base gives insights into the potential for growth and success. Things like age, income level, and dental insurance coverage can help plan marketing strategies and services that meet the specific needs and preferences of the patients.

  1. Competition:

It’s equally important to assess the competition in the area. Analyzing the number and types of other dental practices nearby helps determine the level of competition and how saturated the market is. It’s also important to consider the services offered by competitors and any unique features that can make the practice stand out.

  1. Growth Potential:

Evaluating the growth potential of the dental practice is essential. Factors like population trends, economic indicators, and the potential for new patients can impact the long-term viability and profitability of the practice. Conducting market research and seeking expert advice can provide valuable insights into growth prospects in a specific geographic area.

By carefully considering the location, patient base, competition, and growth potential, potential buyers can make informed decisions when navigating the dental practice market in the UK. These factors will help ensure that the purchased practice has a solid foundation for success and long-term profitability.

Action Points:

  • Location Evaluation:
    • Map potential locations, assessing their accessibility, visibility, and proximity to public transport and parking.
    • Balance your ideal location aspirations with realistic financial and lifestyle considerations.
    • Visit different areas to understand local dynamics and lifestyle fit.
  • Patient Base Analysis:
    • Obtain demographic data of the existing patient base, focusing on age, income, and insurance types.
    • Develop targeted marketing plans based on these demographics.
    • Conduct surveys or focus groups to understand patient needs and preferences.
  • Competition Assessment:
    • Identify and visit other dental practices in the area to gauge services offered and client volume.
    • Analyze market gaps that your practice could fill.
    • Plan unique services or approaches to differentiate your practice from competitors.
  • Growth Potential Evaluation:
    • Research local population growth trends and economic indicators.
    • Consult with a market analyst for insights into the dental market in the area.
    • Develop a long-term growth strategy based on this research.

Dental Practice Valuations and Due Diligence

You must get a valuation from an established provider to receive an accurate purchase price of the dental practice for sale. Always remember, the valuation from the seller needs independent assessing. Do your own homework and employ your own valuer to ascertain if the dental practice for sale is really worth what the seller is asking for!

Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) is currently used as part of the dental practice valuation process.

It’s important to remember that every practice is different. There are several factors that can form part of the value of a practice, including the accounts over the previous three years, the potential for development and expansion and whether a time limited (PDS) NHS contract is in place or an open ended (GDS) NHS contract.

Read our article on dental practice valuations to find out more.

Contact us to find out more

Keep in mind you are not just buying real estate, you are buying a business. This may be the foundation of the next 30 years of your professional life! You must take the time to learn every facet of the dental practice for sale.

Once you know which dental practice you would like to purchase, it’s essential to know that you are investing in the right one. It’s too late to have regrets and doubts after you have signed contracts. This is an investment in the following years of a dental professional’s life, so it’s important to make sure everything is in order.

Click here to listen to our podcast episode on the 7 legal pitfalls of buying a dental practice.

From the accounting to the exterior bricks and mortar, a magnifying glass must be applied everywhere. A specialist dental lawyer will know the right questions to ask so you can assess the business and plan for its growth.

You will also want to ask an experienced accountancy firm to review the financials and check the numbers for validity now and potential in the future. Management information, details from the software system and other important financial information will help you get a much better picture of the health of the business too.

Click here to find out more about what to look for in a dental accountant.

As part of the due diligence process, your solicitor must request the seller to guarantee that the supplied information is correct in order to protect against any loss caused by misrepresentation.

There are certain aspects of due diligence that dentists themselves are best placed to examine, such as the way the practice operates and the treatments that are provided. However, when it comes to legal and financial considerations, a specialist dental solicitor and dental accountants should be part of the team.

It’s never a good idea to proceed without this expert help. Professionals know what questions to ask and what to look for in accounts and financial records. I have worked with many clients to co-ordinate the due diligence process, during the dental practice acquisition process, so I know how important an expert eye is.

What is Included in the Due Diligence Process when Buying a Dental Practice?

“Due diligence is the process of evaluating a business from all aspects before making a purchase decision…It includes specific elements that can vary based on the situation and the nature of the business. Due diligence protects both parties but primarily the purchaser. It can uncover potential liabilities and financial matters and make sure nothing is hidden.”

Jean Murray, The Balance, 2018 (4)

Include everything that pertains to the viability of the business in due diligence. Do not leave anything to chance. From the building itself, to treatment lists, accounts and software, everything needs to be checked in microscopic detail. Too often I have seen clients getting ahead of themselves. Take a step back from the buying edge and make sure every aspect of the practice is viable, before taking the leap into purchasing.

There are several different points to consider when checking documentation during the due diligence process; too many to list here. However, I have found that some of the most important checks to complete include:

  • Are the services currently provided at the practice a good match to the services that can be provided should the sale progress?
  • Is the ethos of the seller similar to the ethos which will continue?
  • Does billing match procedures that were carried out?
  • Does cash recorded match what is reflected in tax returns?
  • What are the current wage demands of the practice?
  • What are the property rental terms?

This is only a fraction of what should be considered as part of due diligence when buying a dental surgery. Take time to make sure that every detail has been scrutinised. This is an important business and life decision that is being made, so do not take any chances. Remember to obtain a guarantee from the seller, as to the accuracy of the information provided. This provides protection against any future financial or legal issues caused by misrepresentation.

Action Points:

  • Independent Valuation:
    • Hire an independent valuer to assess the practice’s worth.
    • Compare the seller’s valuation with your independent assessment.
  • EBITDA Analysis:
    • Review the Earnings Before Interest, Tax, Depreciation, and Amortisation (EBITDA) as part of the valuation.
    • Analyze the practice’s financial health over the past three years.
  • Potential for Development:
    • Assess the potential for development and expansion of the practice.
    • Consider the type of NHS contract in place (PDS or GDS) and its impact on the practice’s value.
  • Legal and Financial Expertise:
    • Engage a specialist dental lawyer for legal due diligence.
    • Consult with an experienced dental accountancy firm to review financials and validate projections.
  • Seller’s Guarantee:
    • Ensure that your solicitor requests a guarantee from the seller for the accuracy of the provided information.
  • Operational Due Diligence:
    • Personally evaluate the operational aspects like treatment quality and practice management.
    • Match the services provided with your capabilities and future plans.
  • Financial Checks:
    • Verify billing accuracy and cash flow against tax returns.
    • Review the current wage demands and rental terms of the property.
  • Comprehensive Review:
    • Scrutinize all aspects of the practice, including the building, equipment, accounts, and software systems.
    • Ensure that the ethos of the practice aligns with your vision.

Negotiating the Price and Terms of the Deal

When it comes to buying a dental practice at the right price, figuring out the details of the price and deal terms is a crucial step. This is your chance to make sure you’re getting the best value for your investment and that the specifics of the deal match up with your goals. Remember, you make your profit when you buy at the right price and add value over the lifetime of your ownership.

First off, doing your homework and gathering as much information as possible about the practice is important. This includes checking the financial records, looking at the types of patients, evaluating the equipment and facilities, and understanding how much similar practices are worth in the current market. Armed with this information, you can confidently enter discussions with the seller.

One key thing to think about is the price tag. It’s crucial to have a clear understanding of how the price is set and if it makes sense based on the practice’s financial performance and potential for growth. It’s essential to get help from a professional valuer or a dental practice expert who can give an independent assessment of the practice’s value and guide you through the negotiation process.

Working out the details of the deal is just as important. This includes figuring out the payment structure, financing options, and any conditions that need to be met before the sale is finalized. For instance, you might want to include plans for a smooth transition period where the current owner helps with handing over patients and staff.

During negotiations, being flexible but also firm in your position is crucial. Be prepared to justify your offer or counteroffer with solid reasoning and evidence. Remember, it’s a two-way process, and finding an agreement that benefits both parties is the ultimate goal. A clear, honest and open conversation is crucial.

It’s highly recommended to engage the services of a legal professional experienced in dental practice acquisitions. They can make sure all the necessary legal documents are in place and help protect your interests throughout the transaction.

In summary, negotiating the price and terms of the deal is a critical step in buying a dental practice. By doing thorough research, seeking professional help, and staying persistent during negotiations, you can secure a deal that puts you in a good position in the dental practice market.

Action Points:

  1. Independent Valuation:
    • Engage an independent valuer to provide a realistic appraisal of the practice’s worth.
    • Use this independent valuation as a basis for your negotiations.
  2. Market Conditions Assessment:
    • Research current market conditions, including demand for dental services in the area and recent sale prices of similar practices.
    • Use this data to argue for a price that reflects the current market.
  3. Negotiation Preparation:
    • Prepare a well-founded argument for your proposed price, backed by your research and valuations.
    • Be ready to explain why your offer is fair and reasonable.
  4. Flexible Yet Firm Approach:
    • Enter negotiations with a flexible mindset, but be firm on your maximum budget.
    • Be prepared to walk away if the price exceeds what you believe is fair value.
  5. Counteroffer Strategies:
    • If the seller’s initial price is too high, present a counteroffer with justification.
    • Include aspects like needed renovations, equipment upgrades, or other investments as reasons for your counteroffer.
  6. Consider Total Acquisition Cost:
    • Factor in additional costs such as legal fees, renovation expenses, and equipment upgrades when negotiating.
    • Negotiate a price that accounts for these extra investments.
  7. Use Conditions as Leverage:
    • If certain conditions (like lease terms, equipment status) are not ideal, use these as leverage to negotiate a lower price.
    • Highlight how these factors will incur additional costs for you post-purchase.
  8. Professional Assistance:
    • Consider hiring a negotiation expert or a dental practice broker who specializes in such transactions.
    • Their expertise can be invaluable in achieving a favorable price.

Legal Considerations When Buying a Dental Practice

When it comes to buying a dental practice in the UK, there are important legal and regulatory things you need to know. These considerations are crucial to make sure the transition into owning and running a dental practice goes smoothly.

First and foremost, it’s crucial to understand the legal requirements set by the General Dental Council (GDC). The GDC sets standards and rules that all dentists must follow, covering professional conduct, clinical management, and patient safety. It’s important to check that the practice you’re looking at meets these requirements and that the current owner has stayed compliant.

Also, if you’re buying a dental practice that already has employees, you should carefully review the Transfer of Undertakings (Protection of Employment) Regulations (TUPE). These rules are in place to protect employees’ rights during a change of ownership. Understanding your responsibilities as the new owner regarding employee contracts, terms, and conditions is crucial.

Another important thing to think about is the legal structure of the dental practice. You can choose to buy the practice as a sole trader, partnership, or limited company. Each structure has its own legal and tax implications, so it’s a good idea to consult with a legal professional or an accountant to figure out the most suitable option for your specific situation.

In addition to these legal considerations, it’s important to conduct thorough due diligence on the practice you’re thinking of buying. This might include reviewing financial records, contracts, leases, and any existing liabilities. Getting the help of an expert experienced in dental practice acquisitions can ensure that all legal aspects are properly addressed, and you’re fully informed before going through with the purchase.

By carefully looking into the legal and regulatory aspects involved in buying a dental practice in the UK, you can ensure a successful and smooth transition into ownership, paving the way for a prosperous future in the dental industry.

Action points:

  1. General Dental Council (GDC) Compliance:
    • Verify that the practice adheres to GDC standards, including professional conduct, clinical management, and patient safety.
    • Ensure that all practicing dentists at the practice are registered with the GDC and compliant with their regulations.
  2. Employee Rights under TUPE:
    • Review the Transfer of Undertakings (Protection of Employment) Regulations (TUPE) to understand your responsibilities regarding existing employees.
    • Assess employee contracts, terms, and conditions, ensuring that their rights are preserved during the transition.
  3. Choosing the Legal Structure:
    • Evaluate different legal structures for owning a practice, such as sole trader, partnership, or limited company.
    • Consult with a legal professional or accountant to determine the most beneficial structure for your situation, considering legal and tax implications.
  4. Due Diligence Process:
    • Conduct a comprehensive due diligence investigation, including financial records, contracts, property leases, and existing liabilities.
    • Utilize the expertise of a professional experienced in dental practice acquisitions to ensure all legal aspects are thoroughly examined.
  5. Regulatory Requirements Check:
    • Ensure compliance with other relevant regulations, such as health and safety standards, data protection laws, and any specific local council requirements.
    • Plan for any necessary updates or changes to maintain regulatory compliance post-purchase.
  6. Consult Legal and Financial Experts:
    • Engage with legal advisors and financial experts who specialize in dental practice transactions.
    • Use their expertise to navigate complex legal and financial aspects of the acquisition process.
  7. Insurance and Liability Considerations:
    • Review and update insurance policies, including malpractice, property, and liability insurance, to reflect the new ownership.
    • Understand your liabilities as the new practice owner, including any outstanding debts or legal issues associated with the practice.
  8. Contract Review and Negotiation:
    • Examine all existing contracts, including supplier agreements, lease agreements, and service contracts.
    • Negotiate terms as necessary to align with your operational plans and legal obligations.
  9. Post-Acquisition Compliance:
    • Develop a plan for maintaining CQC compliance with all relevant regulations and standards after taking ownership.
    • Stay informed about any changes in dental regulations and standards that may impact your practice.

Raising the Finance to Purchase a Dental Practice

When it comes to buying a dental practice, funding might be the most important thing to think about. It’s crucial to explore different funding options to make sure the transition is smooth and the growth is sustainable, if you can’t fund the purchase yourself.

One option is, of course, traditional bank loans. Many banks have special loan programs for healthcare professionals, like dentists. These loans usually have competitive interest rates and flexible repayment terms tailored to the specific needs of dental practice owners. However, getting a bank loan will require a strong financial history and collateral.

Another funding option to consider is seller financing. In this arrangement, the current owner acts as the lender and provides a loan to the buyer. This can be beneficial for both parties, allowing more flexibility in negotiating the terms of the loan. Seller financing may involve an initial payment and regular installments over a set period.

There are also specialized healthcare banks and dental practice finance companies that focus specifically on funding dental practice acquisitions. These lenders understand the unique financial needs of dental professionals and can offer customized funding solutions that align with the cash flow and revenue projections of the practice.

Another avenue to explore is seeking investment from partners or dental associates. This could involve bringing on a partner who contributes to the initial purchase cost and becomes a co-owner of the practice. Alternatively, dental associates might invest in the practice in exchange for a future ownership stake.

Lastly, it’s crucial to consult with a financial advisor specializing in dental practice acquisitions. They can provide guidance on the best funding options available, help navigate the financial aspects of the purchase, and ensure that the chosen funding strategy aligns with the long-term goals of the buyer.

Overall, exploring different funding options is crucial to finding the best solution for buying a dental practice. Each option has its own advantages and considerations, and it’s important to carefully evaluate them to make an informed decision that supports the growth and success of the practice.

How Much Will You Have to Pay?

A deposit of at least 10-20% is standard when buying a dental practice, whilst the remainder can be financed from a bank. The minimum cash deposit will usually be 5%.

It’s important to remember that when the lenders use their estimate of 80% of the value, they’re only estimating that value on goodwill. They do not include the fixtures and fittings in that. This is especially important to remember if the fixtures and fittings figure it quite high.

Click here to watch our webinar on the fees and costs of buying a dental practice.

When a lender assesses your loan application they will be looking at a variety of factors. These include:

  • Your earning history as an Associate Dentist
  • Your financial track record and how you have managed your personal finances e.g. do you have high credit card balances is always a bad time to apply for a loan.
  • Your current living situation i.e. do you own your own house or rent?
  • Your management experience and number of years you have from leaving Dental School
  • Your ability to repay the loan with a comfortable margin of error if interest rates rise
  • If you place an offer for a practice and do not have available funds (or a finance agreement in place) you risk being unable to buy a practice whilst losing credibility with a seller.

Click here to read more about financing a dental practice.

Check the Ratios and Find the Potential Profit

It’s important to chart the potential profit of your new dental practice. How much of an opportunity for growth do you see?

Make sure you ask how many active (seen in the last 10 months) patients the practice has. Out of those active patients, what are the ratios between check-ups versus treatments? That will give you a birds-eye-view of the type of work and, therefore, cash flow you are inheriting.

Ask the seller for a short (3-5 examples) list of their most outstanding treatments to gauge the effectiveness of their follow up system. If the seller is a member of a local business referral group or association, follow up with other members. After all, you are entering their community and early networking prevents many headaches.

Click here to watch our webinar on the top 10 mistakes to avoid when buying a dental practice.

Contact us to find out more

Key Performance Indicators (KPIs) like these reveal the day-to-day work being done to maximize the practice’s earning potential. There are a number of dental KPIs, but let’s look at a few basic numbers you must ask for:

  1. How many new patients have they generated in the last 12 months? Is this rate on the rise?
  2. What are the exam and hygiene recall rates? Are they rising?
  3. What marketing is working the best for the practice and which marketing avenues are exhausted?
  4. What’s the level of new patients received from direct referrals?
  5. What is the patient retention rate? How many patients did the practice lose over the last 12 months?

This will help you to understand how good the patient experience is and what you can do to improve it.

Action points:

  1. Research Loan Options: Explore bank loans for healthcare professionals and compare terms.
  2. Consider Seller Financing: Assess seller financing as a flexible alternative for funding.
  3. Seek Specialized Lenders: Look into healthcare banks and dental finance companies for custom solutions.
  4. Explore Partnerships: Think about joint investments with partners or associates for shared ownership.
  5. Consult a Financial Expert: Get advice from a financial advisor experienced in dental practice acquisitions.
  6. Prepare for Deposit: Ready a deposit of 10-20% for the practice’s value.
  7. Understand Lender Valuations: Know how lenders value practices, especially concerning goodwill and fittings.
  8. Evaluate Loan Eligibility: Check your qualifications for loans, considering your financial history and professional experience.
  9. Assess Practice Profitability: Analyze patient ratios, treatment types, and referral networks to gauge potential profits.
  10. Review Key Performance Indicators (KPIs): Examine KPIs like new patient rates, recall rates, marketing effectiveness, and patient retention.

Managing the Transition Period Effectively

Owning your own practice can be both exciting and challenging. It’s crucial to handle this transition period well to ensure a smooth and successful change. Here are some important tips to help you navigate this process with confidence and clarity.

Firstly, being open is crucial during the transition period. Maintain open and honest communication with the previous owner, staff, and patients. This will build trust and ensure a smooth transfer of responsibilities. Schedule regular meetings or check-ins to address concerns, provide updates, and create a supportive environment for everyone involved.

Next, learn about the practice’s existing systems and processes. Take the time to understand the daily operations, patient management procedures, and financial aspects of the practice. This knowledge will help you identify any areas that need improvement or adjustment to align with your vision and goals as the new owner. Implementing changes gradually and with sensitivity will help maintain stability and minimize disruption.

Also, value the expertise of the current staff. They have valuable knowledge and experience that can contribute to the success of the practice. Encourage open discussion, listen to their insights, and establish a collaborative environment where everyone feels valued and motivated. This will facilitate a smooth transition and ensure continuity of care for patients.

Additionally, consider seeking guidance from experienced dentists or mentors who have gone through practice transitions. They can offer valuable advice and support, helping you navigate potential challenges and make informed decisions. Their expertise can be crucial in ensuring a successful transition and preparing you for long-term success as a practice owner.

Lastly, prioritize patient care during the transition. Communicate any changes or updates to patients in a clear and compassionate manner. Assure them of your commitment to maintaining the highest standards of dental care and address any concerns or questions they may have. Building trust and a positive reputation from the start will help retain existing patients and attract new ones.

By effectively managing the transition period, you can establish a solid foundation for the future success of your dental practice. With clear communication, a thorough understanding of the practice’s operations, collaboration with staff, and a focus on patient care, you can navigate this stage with confidence and position yourself for a thriving dental practice in the UK.

Many dentists who are selling their practice factor in a sense of legacy to the transaction, and may be more willing to negotiate with someone who can show respect for their accomplishments – while also being conscious of their own ambitions.

Click here to find out more about patient retention.

A good relationship with the seller is really help keep the process smooth. Not only that, some sellers may wish to remain working in the practice for some time. Others may still have close connections in the practice’s staff. Keeping the seller happy and onside will really make things easier for you.

Click here to find out more about selling a dental practice.

Action points:

  1. Maintain Open Communication: Regularly engage with the previous owner, staff, and patients to build trust and facilitate a smooth handover.
  2. Understand Practice Operations: Learn about existing systems, patient management, and financial aspects to identify improvement areas.
  3. Value Staff Expertise: Recognize and utilize the current staff’s knowledge and experience; foster a collaborative and supportive environment.
  4. Seek Experienced Guidance: Consult with experienced dentists or mentors who have undergone similar transitions for advice and support.
  5. Prioritize Patient Care: Ensure clear communication with patients about changes, maintaining high care standards and addressing concerns.
  6. Respect Legacy: Show appreciation for the seller’s legacy and achievements, balancing it with your own vision and goals.

Keep the Dental Team

We think it is important to retain the team when you buy a new practice. Think of them as one of the assets of the business. They already have the trust of and their own loyalty to your patients, they are more loyal to each other and the practice (in most cases) and they have the knowledge of the business.

If you buy a dental practice and start getting rid of staff, you’re also getting rid of knowledge and experience. Not just in dentistry in general, but in your practice in particular.

If you want to build that loyalty and trust between yourself and your team as the new owner, consider holding one-to-one meetings, or group meetings with different teams, like your nursing or orthodontic teams.

Also, look at their pay. Make sure they are at least in line with national averages and include performances bonuses – there aren’t many better ways to get a team onside!

Enroll the whole team in your vision for the practice, it’ll make it easier to realise.

Click here to read more about building a dental team.

Action points:

  1. Value the Existing Team: Recognize the team as a vital asset, appreciating their established patient relationships, loyalty, and business knowledge.
  2. Avoid Unnecessary Staff Changes: Understand that retaining staff maintains valuable experience and continuity within the practice.
  3. Conduct Personal Meetings: Schedule one-to-one or team meetings to establish rapport, understand individual roles, and communicate your vision.
  4. Review Compensation: Ensure staff salaries align with national averages and consider implementing performance bonuses to foster motivation.
  5. Share Your Vision: Actively involve the team in your future plans for the practice, encouraging their participation in realizing these goals.

Dental Practice Marketing

Building a successful dental practice involves more than just providing quality dental care. It requires effective marketing, patient retention strategies, and a focus on growth. In this section, we will explore some key strategies that can help you establish and grow your dental practice in the UK.

Click here to find out more about marketing a dental practice.

Make sure to ask the seller about the marketing relationships they’ve forged during their time at the practice. Ask them what ways they’ve advertised in the past, and if there were any open accounts with dental marketing specialists that you could utilize.

Firstly, marketing plays a crucial role in attracting new patients and creating awareness about your dental practice. Using both traditional and digital marketing methods can help you reach a wider audience. This may include creating a professional website to showcase your services, implementing search engine optimization (SEO) techniques to improve your online visibility, and using social media platforms to engage with potential patients.

It is important to check what their online presence is at the moment. How high does their practice rank in google in their area among dentists? Do they already have brand-awareness online? Do they have a large following on Facebook or Instagram that you can leverage?

In addition to attracting new patients, focusing on patient retention is equally important. Building strong relationships with your patients is essential for their loyalty and long-term satisfaction. Implementing strategies such as personalized communication, offering loyalty programs or discounts for returning patients, and providing excellent customer service can go a long way in ensuring patient retention.

Moreover, growth should always be a part of any dental practice. This can be achieved through various strategies, such as expanding your range of services to meet the changing needs of your patients, investing in advanced dental technologies that enhance patient experience and outcomes, and actively seeking referrals from satisfied patients.

It is also crucial to continuously evaluate and analyze your practice’s performance. Regularly reviewing patient feedback, tracking key performance indicators (KPIs), and making necessary adjustments based on the data can help you identify areas for improvement and make informed decisions to drive growth.

By implementing these marketing, patient retention, and growth strategies, you can position your dental practice for success in the competitive UK market. Remember, building a successful dental practice is an ongoing process that requires dedication, adaptability, and a commitment to providing excellent dental care to your patients.

Click here to read our article on How To Market A Dental Practice

Action points:

  1. Develop a Marketing Strategy:
    • Utilize both traditional and digital marketing methods.
    • Create a professional website and apply SEO techniques for better online visibility.
    • Engage with potential patients on social media platforms like Facebook and Instagram.
  2. Evaluate Online Presence:
    • Assess the practice’s current online ranking and brand awareness.
    • Leverage any existing social media following.
  3. Focus on Patient Retention:
    • Build strong relationships through personalized communication.
    • Offer loyalty programs or discounts for returning patients.
    • Maintain high standards of customer service.
  4. Plan for Growth:
    • Expand service offerings to meet evolving patient needs.
    • Invest in advanced dental technologies to enhance patient experiences and outcomes.
    • Encourage patient referrals to attract new clients.
  5. Analyze Practice Performance:
    • Regularly review patient feedback and track key performance indicators (KPIs).
    • Make data-driven adjustments for continuous improvement.

Contact us to find out more

Using a Specialist Dental Solicitor

Placing an attractive offer on your future dental practice is one of the most essential elements in completing a successful purchase. After all, if the seller doesn’t like your proposal, they will simply move on to the next buyer – there is no prize for second place.

To ensure that your offer is fair (to both you and the seller) we always recommend enlisting the services of a professional dental solicitor. A good solicitor will carry out due diligence, negotiate the property aspect of the deal and look at the NHS contract with you. In essence, they make sure all of the t’s are crossed and i’s are dotted, so you don’t have to.

It is important to research the right solicitor for your transaction. Check in with colleagues to see if they have any firms that they’ve used in the past, do your research, and interview several providers until you find the “right fit” for you.

By joining the Samera Alliance, we can put you in contact with our legal partners for their help in buying a dental practice.

Click here to find out more about the Samera Alliance.

Our Expert Opinion

“Over the last 20 years I have personally been involved with several hundred dental practice purchases. From first time buyers to large corporate groups, I have seen most things across the accountancy and financial spectrum.

Many inexperienced buyers, feel they have to offer the price the vendor wants for the practice, whilst sometimes the price may be justified, often it isn’t, so when you start your journey of buying a dental practice, it is imperative to get some help in the process.

I would recommend the following steps when buying a dental practice.

  1. Think hard about the location, type and size of practice you are buying – NHS/Mixed or Private? For your first practice don’t underestimate if you have to travel quite far the impact this can have on your life. Some better deals maybe available away from the main cities, but this often means you having to compromise on lifestyle -it has to be a very personal decision.
  1. Early in the process understand how much you can borrow with the deposit you have in place. If you don’t have a deposit, start saving early. Get in touch with the Samera Finance team, they should be approached early on as they will be able to help you understand the maximum you can borrow and hence the size of practice you can purchases.
  1. Register with all the agents on the market and as I mentioned before be quite ruthless about what you want to buy. Don’t be pressured by any of the agents, as remember they are being paid by the vendor to get the best sale price.
  1. Go and see as many practices as possible – the more you see the better the idea you will get as to what you like but more importantly don’t like.
  1. If you like the look of a practice, ask the agent for up to date accounts and information. If up to date information is not available, ask the question why not? If the vendor is serious they could at least spend a few thousand pounds to provide some transparency to you.
  1. Once you have the required information, it’s imperative to analyse this and assess what the practice is worth to you. Do your own sums, or work with a firm like ours, who has done this so many times. This is the opportunity to offer a price that works for you.
  1. Of course there may be some negotiation but eventually a price maybe settled on, however, this is still near the beginning of the buying process and a lot can still change!
  1. Lawyers will need to be engaged and heads of term drafted which outline the deal value and structure. Once these are agreed the proper due diligence begins.
  1. At this stage too, you will need to decide how you will be funding the purchase, again speaking to our finance team.
  1. Whilst legal and clinical due diligence occurs, one of the most important aspects that needs to be carried out is financial due diligence. Do the numbers presented actually represent reality? This is so important as things may be found that can provide you the opportunity to re-negotiate the price. Unfortunately I have seen some dentists ignore this step at their peril, only realising after they have taken ownership that they have been ripped off!
  1. Once all the legal aspects have been covered, then the legal exchange and completion occur, and then you have the excitement of being the new owner of your dental practice!

It’s a long process, and requires tenacity, and of course paying for professionals who know what they are doing.

Don’t cut corners on probably one of the biggest investments you make in your life, as this may come home to roost if you do!

Good luck and get in touch with the Samera team who can help”

Conclusion: Final Thoughts on Buying a Dental Practice

In summary, exploring the dental practice market in the UK needs careful thinking and thorough research. Buying a dental practice is a big investment and a decision that should be taken seriously.

Firstly, it’s important to conduct a detailed analysis of the market and identify potential areas for growth and profitability. Understanding the local demographics, competition, and demand for dental services will help you make an informed decision.

Moreover, seeking professional advice from dental practice consultants, accountants, and experts is highly recommended. These experts can guide you through the legal, financial, and regulatory aspects of buying a dental practice, ensuring a smooth and successful transition.

Additionally, assessing the current patient base, practice reputation, and infrastructure is essential. Look for practices with a solid history, positive patient reviews, and up-to-date equipment that aligns with your vision for the future.

Funding options should also be thoroughly explored, whether through traditional lenders, dental-specific lenders, or seller financing. Having a well-structured financial plan will contribute to the long-term success of your dental practice.

Finally, don’t forget the importance of effective marketing and building strong relationships with your patients. Use various marketing strategies to attract new patients and retain existing ones, such as online presence, referral programs, and patient education initiatives.

In conclusion, successfully buying a dental practice in the UK requires a combination of strategic planning, due diligence, and professional guidance. By carefully considering the key points highlighted in this guide, you will be better equipped to make informed decisions and embark on a rewarding journey as a dental practice owner.

Buying a Dental Practice FAQs

Why Should You Use A Dental Practice Broker And Dental Sales Expert Such As Samera When Buying A Practice?

We have a personable and sustainable relationship with our registered buyers, and we always strive to match the right practice with the right buyer. We listen to each buyer and discuss their selection criteria, sourcing the right practice.

Click here to know more about dental practice sales.

What is EBITDA?

EBITDA is (E)arnings (B)efore (I)nterest, (T)axes, (D)epreciation and (A)mortisation it is an industry-standard way of determining a business’s profit and overall financial performance.

It is one of the key metrics we use to valuate dental practices.

You can read more about EBITDA here.

What Is Due Diligence?

Due diligence is a very important exercise carried out during any dental practice sales and acquisitions process.

It is divided into legal and financial due diligence. It is an exercise to confirm that all information provided at the time of discussing and agreeing to offers is accurate and precise.

Information such as accounts, management accounts, patients number, staff contracts, NHS contracts and any legal issues such as change of control clauses, lease and property contracts, are just some of the documents to be checked and diligently controlled.

An expert legal and financial team will know what to look for in a professional and time-effective way.

Why Should I Carry Out The Due Diligence Exercise?

After you visit the practice and check the property and surrounding areas, have a good look at the last 3 years’ financial statements. Find out if the turnover is steadily increasing or decreasing and check if the private revenue is made up of fee-per-item or capitation scheme.

You also want to check if the number of full-time equivalent dentists is less than the number of surgeries, so that there is an opportunity to increase the workload and the revenue.

If the practice is incorporated, make sure that there is not a ‘change of control clause’ in the NHS contract and, if you are buying halfway through the year, check the performance of the UDAs delivery to avoid any unwanted clawback in the next financial year.

Do I Need A Specialist Dental Lawyer?

Never consider the services of a solicitor or a firm with no experience with dental practice sales.

It’s that simple. But occasionally we experience some dental principals going down the route of a solicitor who may be brilliant dealing with purchasing houses, but could slow down the process of selling or buying a practice, potentially increasing your legal fees or asking unnecessary or more than necessary due diligence documentation to complete, ending up wasting precious time.

You can find out more about the legalities of buying and selling a dental practice here.

How Do You Value A Dental Practice?

Every practice is unique and every single dental practice has a price range of value, dictated by many factors and many variables.

It is important to look at the last 3 years’ set of accounts as well as the latest and up-to-date management account to see any upward or downward income trend. The surgery percentage of utilisation and opportunity to expand are also factors that can potentially increase value and marketability.

You can find out more about dental practice valuations here.

How Long Does The Dental Practice Sales Process Take?

The average timescale for a dental practice sales deal to complete is approximately 5 or 6 months.

However, there are many factors, such as the type of practice and the legal and financial support team selected, that can influence the timeframe and speed up or slow down the process of buying a practice.

You can find out more about selling a dental practice here.

What If I Buy A Practice With NHS Contract?

If you’re buying a dental practice with an NHS contract, ask for the electronic copy of the GDS or PDS contract, checking all variations and any potential change of control clauses.

Regarding the sale of the dental practice with the NHS contracts, there will be 28 days’ notice between exchange and completion to add to the NHS element of the deal.

What Is The Dental Practice Sales Process?

We like to simplify the process of buying and selling a dental practice to 8 major steps.

Initial enquiry – the vendor sends the completed data collection form to Samera and initial discussion with our team takes place.
Valuation and practice visit – this is when we confirm the key variables and arrange a visit at the practice and our report is discussed with the vendor(s). Phase one of Samera marketing process is explained and begins straight after the meeting.
Viewings – Phase 2 of Samera marketing process. This consists of arranging appointments with potential buyers that have already been screened and viewing the property.
Offer stage – we negotiate the best financial package and best terms, then Heads of Terms are negotiated and agreed.
Due diligence – key information and documents are reviewed by legal teams.
Ongoing Support – we are there at every step of the way, supporting sellers during the financial and legal due diligence for a smooth completion.
Completion – sales and transfer of funds to the vendor’s bank account.

Does The Practice Need To Have A Partnership Structure?

No, not necessary. A buyer will always consider private limited companies and sole traders. Each one is treated differently from a legal perspective and the way in which NHS England is informed is different depending on whether the vendor decides to sell the dental practice via assets sale or shares sales.

What Issues Do You Come Across When Dealing With Dental Practice Sales?

We have never encountered an issue that we can’t resolve.

No practice is the same, but we have never encountered an issue that we can’t resolve; sometimes it just takes a little longer. Any problems usually come to light at the due diligence stage when all documents are thoroughly inspected.

The most frequent time delaying issues are regarding the property or the lease negotiations.

You can find out more about selling a dental practice here.

What Type Of Deal Structures Are Available On The Market?

We are experts in the buying and selling of dental practices and we will help all dentists to structure a deal to suit them.

Each dentist has specific expectations, tax situations and desires.

Payments usually take the form of upfront transfer on completion for NHS-driven profits, deferred payments for performance-based criteria, earn-out for private revenue, and negotiated UDA rates for vendors working at the practice after completion, who may prefer to have a higher on-going salary rather than an upfront payment depending on their individual tax position.

Why Do Dentists Sell Their Dental Practices?

Investing in alternative businesses and retirement. The most common reasons for selling a dental practice are investing in alternative businesses, to add to a retirement fund or to gain freedom from all of the administration and regulations of running a practice, allowing the vendor to once again focus on the things they enjoy.

How Much Money Is Needed For Buying A Dental Practice?

You should always discuss your financial position with an expert broker and usually have at least a 10% deposit when thinking of buying a practice.

Most lenders will offer a maximum of £500,000 unsecured loan per dentist, depending on the practice and personal situation so if you are thinking of buying a practice worth £1,500,000 with a partner, you must have a minimum of £500,000 deposit.

If you place an offer and don’t have available funds or a finance agreement already in place, you risk being unable to buy a practice and, of course, losing credibility in the dental world, where news travels at the speed of light.

You can read more about buying a dental practice here.

Who Is Selling And Their Reasons For Selling?

More often than not we come across sellers wishing to take the practice to the next level with a new buyer, whilst relinquishing the responsibility of running the practice, as they have done this for many years.

Having a seller deciding to stay at the practice to help with the transaction time is most valuable for any buyer, especially a young dentist buying a practice for a long-term project.

So, have a good conversation with the seller and explain your idea, as money is not the only driver for a seller.

Why Should I Check The CQC Inspection Report?

Once your offer is accepted and you are in the process of the due diligence, check the quality of the equipment, cabinetry, compressors, floor or anything that could perhaps cost you money from day one.

You also need to ask the details and date of the last CQC inspection and DDA compliance to make sure that any potential requests outlined in the report have been satisfactorily covered. Your solicitor will help you with checking all equipment certificates, as well as indemnity insurance for the staff.

What If The Seller Is Becoming An Associate?

The seller may wish to stay at the practice for a number of years. Make sure you discuss and agree on an associate contract with the seller and agree on the number of UDAs to be performed, pay per UDA and working hours.

Of course, if the seller is not staying at the practice, make sure that there are some restrictive covenants preventing the seller to work near the practice that you have just bought.

A minimum of 2.5 miles in a rural area and 0.5 miles in a city should apply.

What If I Wish To Buy The Property?

For a vendor, the options are either selling the property or have a lease in place with the buyer.

The property will be valued as a commercial property and not on a residential basis so this is a point to consider when thinking about buying it or not.

You can read more about commercial mortgages here.

What If There Is A Lease On The Property?

If there is a lease on the property and the lease is less than 15 years to the expiry date, it is advisable to talk to the landlord about a potential extension and engage the landlord at an early stage.

Any buyer would want at least 15 years lease or more if possible and the likelihood is that the landlord would ask for his legal costs to be covered.

Do I Need To Have All My Certificates Ready And Available?

During the due diligence process, you will be asked to provide and show your certificates such as the GDC registration.

Have all those ready and will save you time and during the selling process.

Do I Need To Ask For An Inventory?

Yes most certainly so, it takes some time and is boring but it will create clarity with regards to the items purchased at the practice and the items that are taking away. Also it will avoid any potential arguments and dispute further down the dental practice sales process.

Will The Dental Practice Sales Process Trigger A New CQC Inspection?

Care Quality Commission is another potential reason for a delay in buying a dental practice. Sometimes even 3 months delays if either the buyer or the seller don’t have their DBS check ready and available to submit, or the practice has not been inspected lately.

The process of selling the dental practice will involve deregistration of the seller and registration of the buyer to work at the practice. This process will likely trigger a new CQC inspection, unless one was carried out recently. So, have everything ready and DBS not older than 6 months.

What Happens To The Equipment Still Leased?

If all, or part, of your equipment is leased, sellers could either transfer the arrangements to the buyer or pay it off, which is usually most buyers’ preferred choice.

What Are The Legal Warranties?

Most solicitors acting on behalf of their clients as buyers will advise their client to include in the Standard Purchase Agreement ( SPA ) document, a warrant from you as a seller that all information provided including any financial and contractual aspect of the practice is true and accurate.

On the other hand, the seller’s solicitors should negotiate and deal with the warranties in a way that protects the vendor and minimise their risks against potential claims in the future.

You can find out more about legal issues when buying a dental practice here.

What is a deferred payment structure?

When buying or selling a dental practice, a deferred payment deal is one where part of the agreed-upon price of the practice is withheld and paid over a series of months or years.

These deferred payments are often tied to the performance of the practice. In other words, if the practice underperforms in certain key areas, some of the deferred payment is reduced.

Buying a Dental Practice: Get Started

When buying a dental practice (especially if it’s for the first time), you need the competent hands of qualified professionals. Not only have we been helping the UK’s dentists to buy, start and sell dental practices for over 20 years, we are dental practice owners ourselves! We know what it takes to buy the right dental practice, we can help you find it, buy it and get it up and running.

Book a free, no-obligation consultation with one of our team at a time that suits you (including evenings). We’ll call you back and have a chat about how we can help buy your dream practice.

With Samera Business Advisors you can rest easy knowing that your investment is secure and your future is brighter. Contact us today so we can help plan for your tomorrow.

Learn More: Buying a Dental Practice

For more information please check out the articles and webinars in the buying a dental practice section of our Learning Centre like the Guide to Buying a Dental Practice.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

7 Legal Pitfalls to Avoid when Buying a Dental Practice

The Dental Business Guide Podcast Episode | February 16th
Arun Mehra and Kate Ford

Arun Mehra: Hello there now welcome back to the dental business guide podcast and today I’m joined by Kate Ford from Rudlings Wakelam Solicitors. Hi, Kate, how are you?

Kate Ford: Hi, I’m not too bad yourself?

Arun Mehra: Yeah. Good, good. Thanks. Now, Kate, what’s your background? What’s your experience.

Kate Ford: I’ve been a qualified solicitor for just under two years now. And I am originally from Liverpool but moved down to Norfolk a few years ago. And I’ve been with Rudlings for the past few years, where we’re quite an experienced firm when it comes to dental practices, or other health care transactions such as vets or doctors.

But I think dental is one of our biggest areas. And so we’re kind of fully equipped when it comes to all the various bespoke bits and bobs that arise when it comes to selling and purchasing dental practices.

Arun Mehra: All the nuances that I’ll I’m very well aware of indeed. So today, I’ve got a bunch of questions I want to ask you, for any listeners out there who are potentially buying a practice, whether it’s mixed, NHS or private. So I know one of the most popular questions we get all the time is: what is due diligence and why is it so important?

Due Diligence

Kate Ford: Yeah, so due diligence is just simply a term which is used to describe the gathering of information for a prospective buyer. It is basically one of the most important stages really, so that the buyer can decide if they most definitely do want to progress with the sale.

Due diligence is an aspect which requires a lot of patience and scrutiny. But essentially the better the due diligence stage is, the better equipped the buyer is. Without an investigation, the buyer would only be able to judge the practice on its face value, but also not be able to identify any potential issues or concerns which they hadn’t previously been aware of.

I always compared it to if you are buying a residential home, you wouldn’t proceed without looking into the title documents or the property searches. And it’s basically the same when you’re buying a practice. Due diligence is an exercise which allows the buyer to address issues or misconceptions or any worries that you may have.

Because a seller and the agents, they can paint quite a deceiving picture about a practice. Whereas, there could actually be some major elements both practically or from a legal point of view, which the buyer is essentially going to take on the responsibility for.

Arun Mehra: Totally, I kind of concur with that. I’ve been dealing with practice sales for many years. And as you mentioned, houses and house due diligence is relatively straightforward. But when you’re looking at business there’s so many aspects – it’s staffing, its contracts that you’ve signed up to, it’s legal, it’s so many things that can be there.

So you cannot not do a good thorough job. If you don’t do the due diligence, you really need to get the due diligence right and have the right solicitors and the right team to help you do this.

Kate Ford: Exactly. And as you said, there’s so many different aspects. Particularly when you’re purchasing, say, a large practice or a group of practices, you’ll usually have multiple legal departments involved. So you’ll have your employment solicitors, you’ll have your property solicitors, you’ll have the commercial solicitors because there’s just so much that forms a business that it’s hard to overlook it. It can be quite an error if a buyer doesn’t, because they’re essentially taking on the financial implications and they’re taking all the risks on it.

Action Point

Conduct thorough due diligence when buying a dental practice to uncover any potential issues and assess the practice’s true value, ensuring a sound investment.

Contact us to find out more

Transferring an NHS Contract

Arun Mehra: Okay, so now, I’m a buyer, I have the due diligence done, and I’m buying an NHS practice. What are the most important things to consider when transferring the NHS contract over to me?

Kate Ford: Well, so the first thing to look at is whether the NHS contract is a GDS or a PDS contract, because that can seriously affect the time scale of the transaction.

So GDS contracts, you always hope to find because they’re usually a lot simpler and straightforward. Usually, the LAT requires three months to transfer a PDS contract. And if you haven’t taken that into account when you’re working out your timeline for the transaction, if you get to a point of completion and you haven’t notified the LAT that you’re transferring a PDS contract, then there’s an extra three months that you’ve got to add on to everything.

Whereas with GDS, it’s a lot more shorter and more straightforward. However, when you’re transferring a GDS contracts, there are some elements which buyers would probably not be aware of, in that there’s a specific route which you’ll take which is called ‘the partnership route’.

So the NHS aren’t informed that a seller is actually physically selling their practice. But instead, the seller and the buyer enter into a partnership. And so on completion, the seller and the buyer, they execute a partnership agreement. And then usually after a period of time, which is around a few months, the seller then retires from the partnership. And then the contract is transferred essentially into the sole name or the sole names of the buyer or buyers.

And the NHS, using this route, they only usually require a month’s notice to affect the change to the partnership. But, and typically when you have engaged solicitors, the solicitors are responsible for serving that notice, because we can line it up with the hopeful completion date. Because NHS are usually quite particular, they want the notice within 28 days off the first of the month. So it’s usually important to instruct a solicitor who’s familiar with, not only the notice periods, but the particular days that NHS want notices served.

Arun Mehra: Okay. So, in a nutshell, there is a process that has to be followed. And it’s important in my experience, that you have solicitors that understand the NHS nuances and contracts, because otherwise, it could take significantly longer if you don’t have that experience in your team correct?

Kate Ford: Yeah, definitely. And the NHS they have a kind of standard partnership agreement. Not a template, but they look for certain provisions, in which if you just have a buyer and a seller acting for themselves, and they don’t have a properly drafted partnership agreement, it’ll get rejected, which adds on just even further delay.

So as you say, it’s always very important to instruct a solicitor who is familiar with what the NHS are wanting. But bearing that in mind, if you’re purchasing an incorporated practice, then you don’t need to do any of that. And it’s just the case of purchasing their shares. Because essentially, the corporate body that’s party to the NHS contract, they don’t change at all. It’s just the owners of the corporate body.

And, of course, the NHS will need to know that there’s been a change of control of the limited company, but it’s a lot easier and a lot more straightforward to simply inform the NHS that the shareholders are changing, as opposed to a whole new partnership agreement drafted.

Action Point

For transferring an NHS contract, understand the type of contract (GDS or PDS) and the associated timescales. Consider the partnership route for GDS contracts to facilitate the transfer. Ensure proper notice is given to the NHS, adhering to their specific requirements and timelines. For incorporated practices, the process involves notifying the NHS of a change in company control, which is straightforward. Engage a solicitor experienced with NHS contracts to navigate the process efficiently.

What Happens to the Staff?

Arun Mehra: Okay, cool. So now when I’m buying a practice on a question I always get from so many people is – I’ve got staff that I’m going to be taking on, do they all transfer automatically to me? Or can I move some staff on? What do what happens is this situation?

Kate Ford: Yeah, so I think employees and the employment obligations are often overlooked, because usually a practice will only have a small number of employees and you think, ‘Oh, I can just let them go and bring in my own employees. And it won’t be an issue.’ But there’s actually quite an important regulation which applies to this situation, which is called TUPE. And the TUPE regulations basically apply whenever there’s a transfer of an undertaking. So the sale of a business, therefore, applies under TUPE.

And so whenever a buyer is taking on a practice, all of the employees who are on payroll at the time of completion will transfer to the buyer. And it’s very important that the buyers are aware of the terms of each employee’s contract, if you will. And it’s important that they know that there are limitations to how they can firstly change any of these terms, and whether they can dismiss any of these employees. Because it may be the case that they don’t want to take on so many employees.

But if you dismiss one after completion, you’re making yourself very vulnerable to breaching the TUPE regulations. There’s also obligations on the sellers that they must consult with the employees and they must inform the buyer of all of the various details and all of the various terms concerning all of the employees. And it’s a situation where a lot of buyers get themselves into trouble because they don’t realise that after completion, they can’t change the terms of the under which the employees that have transferred over.

So it is very, very important that where there are employees involved, either solicitors or even HR advisors, they can guide buyers into how to negotiate TUPE regulations. Because annoyingly, they are a bit of a minefield, there are various obligations for various parties. And these obligations change depending on how big the practice is and how many employees there are. So, if there’s over 10 employees, the seller and the buyer have to do one certain thing. If there’s over 20, they have to do a different thing.

So it is definitely important just to, even if you you don’t want the solicitor to act for you for the entire transaction, but just at the outset to assess the employee’s situation, and just to confirm what your obligations will be, both before and after completion of the purchase.

Action Point

When buying a dental practice, all existing staff automatically transfer to the new owner under TUPE regulations, preserving their employment terms. Buyers and sellers must comply with specific obligations, including informing and consulting with employees about the transfer. Altering employment terms or dismissing transferred employees without just cause can violate TUPE regulations. It’s important for buyers to be aware of their responsibilities and possibly consult with legal or HR advisors for guidance.

Indemnity and Warranties

Arun Mehra: Okay, fantastic. That’s very useful. So now in terms of when you get the sale and purchase agreement, I’ve seen so many in my time, there are lots of clauses in there and the ones that always stand out, the indemnity and warranties. What are they and why are they so important?

Kate Ford: Well, warranties and indemnities are essentially just a means of reallocating risk between the seller and the buyer. They’re also a really useful way of ascertaining important information and disclosures, which may not have been obvious from the due diligence process.

But warranties are essentially a number of statements about the business which confirm its position. And this can basically include matters like there haven’t been any litigation issues in the last two years, or the seller hasn’t dismissed any employees in the last year. If any statements are untrue, the seller can make disclosures against them, informing the buyer of any breaches of the warranties, and this will be put into a disclosure letter. Should the seller failed to disclose a particular breach of a warranty, then the buyer can issue a claim for this breach if they’ve suffered a loss.

So if there’s a statement, which says that the seller hasn’t dismissed any employees in the last year and they have done, and this particular employee issues a claim for unfair dismissal, after completion, the buyer is essentially responsible for that claim. And so any losses that they suffer, any damages they suffer, they can pursue the seller. Because you can say ‘you didn’t inform me of this properly, and you’ve breached a warranty’.

So it’s very important that when drafting the purchase agreement, that from a seller’s perspective, they’ll want as few as warranties as possible. And they’ll want to make sure that they disclose as much information as possible. And the buyer will want to make sure that there are more warranties in there because there are more elements that could be covered.

Now, indemnities are very similar. They, in principle, have the same meaning, but they offer an element of protection for the buyer. Usually warranties are general sweeping statements like ‘there have been no litigation matters in the last two years’, whereas indemnities cover specific issues. So say, for example, we take the employee that was dismissed before completion, they issued a claim, the buyer would want an indemnity to deal with that specific tribunal claim, in which the seller would make sure that the buyer is compensated pound for pound for that specific tribunal matter.

And essentially, we as lawyers, we consider indemnities blank checks. So when you’re acting for a seller, you don’t want any indemnities, you want to avoid them all. Because it could be quite costly for the seller. But for a buyer, if there are any significant, specific issues, you want to make sure that they are all covered in the indemnity to make sure that your client is covered, if they do incur a risk to the most amount as possible.

Action Points

Warranties and indemnities reallocate risk in business transactions. Warranties are statements on the business’s condition, with sellers required to disclose any inaccuracies. Indemnities provide specific protection, compensating buyers for certain losses. Sellers aim to limit these clauses to reduce potential costs, while buyers seek them for protection against future liabilities.

Contact us to find out more

Defective Work

Arun Mehra: Okay. Very helpful. So now if I’m a buyer, or even a seller, there’s always gonna be work that hasn’t been finished or completed and how is that apportioned? And also what happens in respect of defective work as well? Is there a claim that could be made against those? Or does it come under warranties or indemnities again?

Kate Ford: Yes. So one unusual thing about a dental transaction is that there’s usually quite a substantial section of the purchase agreement which deals with apportionments. And for some reason with other businesses, there isn’t so much of a focus. But with dental work, as you know, dentists will sometimes you have advanced payments, sometimes you’ll have a lot of uncompleted work that will be going on at the time of completion. And there’ll be customers or patients who aren’t happy with treatment that they received before completion, but now the buyer is responsible for them.

And the main way to deal with it will be through the purchase agreement and the negotiation process. So essentially, the buyers and the sellers will have to come to an agreement of how to deal with each matter individually. So for example, advance payments, you’ll have to assess whether all advance payments will stay with the seller, or if they’re going to be to the buyer wholly or if they’re going to be split 50/50. There isn’t a set format, it’s just more kind of who wins the negotiations.

Usually you find that work that’s already been started but hasn’t yet been paid for, if all of the works been completed, and none of the fees have been paid, all of those fees will be apportioned to the seller. And essentially, the buyer pays the seller after completion for those specific bits of work. Whereas, if there’s part of the work has been done, but part hasn’t been done, there’ll be a percentage split once the payments been received.

You also have to think of apportionment of monthly BSA payments. Typically, they’re split on a day rate. So if completion falls on the 15th of the month, then they’ll be split to 15 days and 15 days. You have to think about underperformance of targets. At the moment with COVID, obviously the NHS have changed their targets. But if before completion, your due diligence has shown that there will likely be an underperformance because of the seller, quite often there’s a retention which is included in the purchase agreement.

So the buyer gets to hold on an additional piece of money which the seller pays. And if there is, in fact, an underperformance the buyer can keep that money. But if in fact, the buyers work fairly hard, they only keep a proportion of that money and they pay back the remainder to the seller. So it’s all things which there isn’t a set format for that this is how it will work. But it’s more negotiations. And so it’s good to get an an experienced solicitor, who’s familiar with all of these bespoke things that dental practices incur, and who knows how to properly negotiate them.

Action Points

In dental transactions, handling unfinished or defective work involves negotiating terms within the purchase agreement. Buyers and sellers must agree on how to apportion costs for advanced payments, incomplete work, and underperformance issues. This often includes dividing advance payments, allocating fees for partially completed work, and considering underperformance retentions. The process is highly negotiated, with no set format, emphasizing the need for experienced legal guidance to navigate these unique aspects effectively.

Reviewing the Property

Arun Mehra: Okay. All right. And then the last couple of questions here, Kate. Properties are always a large part of the transaction quite often, whether it’s a freehold or whether it’s a leasehold. What are the top tips in terms of reviewing the property carefully?

Kate Ford: Yes, so obviously, when you come to purchase a practice, it’s always good to assess whether you want to purchase the freehold or just take out a leasehold. It may be the case that you don’t have any choice in the matter. But both freehold and leasehold give you pros and cons depending on your personal situation.

Obviously, freehold you have a lot more autonomy in relation to how the property is dealt with. But leasehold, you’re only obligated to hold that property for a fixed period of time. And little things like if there’s an issue with the roof, generally the landlord’s responsible for it. Whereas, if you own it, it’s your responsibility.

And so this is where due diligence again comes back into it. It’s just so important to to know exactly what you’re taking on a property is such a large asset, it’s usually the largest asset of a dental practice. If you own it outright and something goes wrong, that’s a substantial bill that you’re going to have to fit.

And if it’s a lease holder, however, you won’t be responsible for the major repairs. But if you breach the lease, you could be in breach. And so it’s always just best to, if you’re purchasing a property, double check over the title deeds. Because there may be rights which your neighbor has a right of access over, which you may not be familiar with. And the practice owner may not be familiar with. But there’s this right there. And if you stop a neighbor using that particular right of access, then you could have a serious financial liability on your hands.

Similarly, there may be covenants which the property is bound by. And if you breach that covenant, the person who benefits from that could then again issue you for breach of Covenant, and you’d be faced with a significant financial responsibility.

There are also property searches, which are a really useful way of not only knowing more about your property, but the surrounding area. And there are a lot of searches that we can undertake, where it will show you all the nearby commercial property. So it may be other dentists or GPS, or shops, which may affect how you want to carry out your business.

So it isn’t just whether your property is connected to mains drainage, but also other things like, there’s a development proposed on a couple streets over which may mean more patients, which could really benefit your business. Or it could be that around the corner there’s a very large dental practice, which you may think well actually ‘I don’t want to be competing with them, I’m not going to proceed’. So it may look like a great property on the face of it. Or it may look like a bad property on the face of it. But having these property searches and doing a full review of the title documents can really make or break your business.

Action Plan

When reviewing property for a dental practice transaction, consider the type of ownership (freehold vs. leasehold) and its implications for autonomy and responsibility. Conduct thorough due diligence to understand property rights, covenants, and potential liabilities. Review title deeds and undertake property searches to gain insights into the property and surrounding area, including commercial competitors and potential developments that could impact your business. This comprehensive approach ensures informed decisions and can significantly influence the success of your dental practice.

Buying the Practice You Work In

Arun Mehra: All right, cool. And then I suppose one of the things that I see all the time is that there are a lot of buyers out there who are actually working in the practice that they intend to end up buying. So do they have to go through this whole process as well? What would you recommend?

Kate Ford: Yep. So as you say, it happens so often that an associate will come into a position where they can either purchase the practice outright, or quite often will be able to buy into a practice. And there’s this misconception that because I work for a practice, either as an employee or self-employed contractor, that because I work for them, I don’t actually need to carry out any reviews, I don’t need to go through this long arduous due diligence process or going through the negotiations with the purchase agreement.

But often, there’ll be elements of a business where the practice owner doesn’t want to disclose it to all of its employees and all of its contractors. For example, litigation matters, as an employee myself, if my employer has a litigation matter, or an employee unemployment matter, often, they’re obligated not to disclose that information to other employees or other contractors, because it doesn’t involve me.

And going back to the property as well, there’ll be property elements, which I myself am not party to, until I do those reviews, or ask the seller to provide me that information. When you’re buying a practice, you want to make sure that you pay the market value for it. And without doing a full review, you won’t actually know if the practice is trading well, or if it’s trading really well.

So doing the due diligence process and doing the negotiations process, you know exactly what you’re buying into, or what you’re purchasing. You know how the business is doing and how it’s trading, so that you can project what your profits are going to be once you own it. And you can also just make sure that you’re entering into this deal on the best terms that you want to be party to. It is just so important.

As we said earlier, there are so many elements that make up a business. It isn’t just a property where you purchase bricks and mortar, you’re buying employment contracts, you’re buying supply and maintenance contracts, you’re buying stock, you may buying vehicles. There are so many elements, which can so easily be overlooked when you’re already part of a business. But there are too many things which, firstly, you legally can’t be aware of. But practically you can’t be aware of every single element as an employee. So it is most definitely just to, even if you do it yourself just to have a thorough review of what you’re buying into.

Action Plan

Even if you’re an associate or employee planning to buy the dental practice you work in, it’s crucial to undergo the full due diligence and negotiation process. This ensures you understand all aspects of the business, including hidden liabilities or potential issues not visible to employees or contractors, such as litigation matters or property issues. Thorough review helps ascertain the practice’s true value, trading status, and future profitability, allowing you to enter the transaction informed and on favorable terms.

Contact us to find out more

Arun Mehra: Okay, well, that’s been really, really helpful, Kate. We’ve gone through seven major kind of pitfalls that people hit sometimes when they’re buying a practice. Any the last comments to people when buying a dental practice, from a legal perspective?

Kate Ford: I think from a legal perspective, you know, obviously legal fees can be quite overwhelming. But even if you don’t want to engage a solicitor for all of the transaction, there are certain parts like the due diligence, or the purchase agreement, where it’s just best to have a legal person look over it for you.

So even if you’re quite confident that you can do a lot of it yourself, I would advise just to get a legal person glance over over the transaction, because there may have been things which you’ve missed or haven’t realised. And so yeah, it is always just worth speaking with a legal professional to make sure that it is as you’re hoping to buy.

Arun Mehra: Okay, fantastic. Well, thank you very much today for your inputs. Okay, and been really helpful. I think the seven legal factors that people should be looking out for when they’re buying a practice are essential. And I think as deals get more complicated, I think these issues are just getting more and more important. So there you go. That’s Kate, from Rudlings Wakelam, and if you’re looking for business tips, check out our next podcast on the dental business guide. Thanks, Kate.

Buying a Dental Practice: Get Started

When buying a dental practice (especially if it’s for the first time), you need the competent hands of qualified professionals. Not only have we been helping the UK’s dentists to buy, start and sell dental practices for over 20 years, we are dental practice owners ourselves! We know what it takes to buy the right dental practice, we can help you find it, buy it and get it up and running.

Book a free, no-obligation consultation with one of our team at a time that suits you (including evenings). We’ll call you back and have a chat about how we can help buy your dream practice.

With Samera Business Advisors you can rest easy knowing that your investment is secure and your future is brighter. Contact us today so we can help plan for your tomorrow.

Learn More: Buying a Dental Practice

For more information please check out the articles and webinars in the buying a dental practice section of our Learning Centre like the Guide to Buying a Dental Practice.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

Why First Impressions of Your Practice Matter

Why would you want to purchase new equipment or undertake refurbishment work at your dental practice at this moment in time?

The look and feel of your practice can have a big impact on your patients’ view of the service that they may receive, as soon as a client enters your premises, they are forming an opinion of your practice.

Enhance the Patient Experience

A modern practice with the latest equipment such as 3D Scanners and 3D Printers will enhance the patient experience and speed up the treatment times. Being able to show your clients x-rays while still in the chair and talk through the process will allow you to start introducing new, higher-end services into the practice.

Stay Ahead of the Competition

Staying ahead of local competition can make you stand out and give you a unique selling point. What better way to market your practice than by showing your newly refurbished surgery or the latest piece of technology that you have purchased that will improve upon the already high level of service that you offer?

Make Use of Space

You may have reached the maximum capacity within your surgeries and need to convert unused space into a treatment area or, due to the new restrictions, you need another room to maintain your existing activity levels.

The number of patients that you can see on a daily basis has an impact on your practice turnover and growth. If you can increase your patient appointments and the types of services that you offer it can have a real impact on the business profit margins.

Invest in your business

Investing in your business with items such as equipment can have a positive effect on patient perception, the services that you offer and ultimately the profits.

So how can you finance the equipment?

Asset finance is normally the preferred option. By using Asset Finance you can usually structure a facility over 3-5 years. This will assist you in managing business cash-flow and providing you with a regular monthly payment plan, instead of paying a large lump sum up front and perhaps putting pressure on your bank account.

Samera Finance are experienced healthcare brokers with a banking background. We have access to many asset finance providers. It’s always best to explore the market and see what is available rather than just approaching a single lender.

Action Points

  • Upgrade Equipment: Invest in the latest dental technologies like 3D Scanners to improve patient experience and treatment efficiency.
  • Compete Effectively: Stand out by refurbishing your practice and incorporating advanced technologies to offer unique services.
  • Expand Services: Use available space to increase treatment areas, boosting patient capacity and service variety.
  • Smart Financing: Utilize asset finance to manage costs effectively over time, maintaining healthy cash flow while expanding your practice’s capabilities.

Please contact us directly if you wish to explore your options:

Dan Fearon   Nigel Crossman
Commercial Finance Broker 
07718655245 
[email protected]            
Head of Finance
07715668267
[email protected]

Business Loans for Dentists

We’ve been helping to fund the future of the UK’s dentists for 20 years and our team are made up of former bankers with decades of experience and contacts in the UK’s healthcare lending sector.

You can find out more about working with Samera Finance and the financial services we offer by booking a free consultation with one of the Samera team at a time that suits you (including evenings) or by reading more about our financial services at the links below.

Dental Practice Finance: Further Information

For more information on raising finance for your dental practice, including more articles, videos and webinars check out our Learning Centre here, full of articles an webinars like our How to Guide on Financing a Dental Practice.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

3 Most Important Questions to Ask

In this video, Arun discusses the 3 most important questions you need to ask yourself when buying a dental practice.

Click here to read our articles Samera.

Buying a Dental Practice: Get Started

When buying a dental practice (especially if it’s for the first time), you need the competent hands of qualified professionals. Not only have we been helping the UK’s dentists to buy, start and sell dental practices for over 20 years, we are dental practice owners ourselves! We know what it takes to buy the right dental practice, we can help you find it, buy it and get it up and running.

Book a free, no-obligation consultation with one of our team at a time that suits you (including evenings). We’ll call you back and have a chat about how we can help buy your dream practice.

With Samera Business Advisors you can rest easy knowing that your investment is secure and your future is brighter. Contact us today so we can help plan for your tomorrow.

Learn More: Buying a Dental Practice

For more information please check out the articles and webinars in the buying a dental practice section of our Learning Centre like the Guide to Buying a Dental Practice.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

5 Quick Tips when Buying a Dental Practice

Consider How You Look to the Banks

You need to think about how you look to the banks as a possible borrower. Banks and other financial lenders need to know that you are a safe investment.

You have the qualifications to prove that you know your stuff when it comes to dentistry. You also need to be able to prove to the banks that you know your stuff when it comes to business.

Does your CV look like you are ready to buy and successfully manage a dental practice? Make sure you clearly show your dental and management experience such as courses, mentoring staff, training staff and dealing with CQC.

You also need to think about your personal and business finances.

Have a look at your financial track record, how you have managed your personal finances e.g. do you have high credit card balances? Have you demonstrated an ability to save?

How strong are your associate accounts, would they be strong enough to demonstrate that you can cover the workloads and UDAs at the target practice?

If you can show evidence of timely payments of debts, the ability to prepare cashflows and a good understanding of accountancy, you become a much safer bet in the bank’s eyes.

Find the Right Practice

It may sound obvious, but it’s worth pointing out that you need to make sure you are buying the right practice for your vision, goals and personal situation.

As the saying goes – location, location, location. Yes, a glamorous and famous street in Central London might have been your dream, but is it realistic, is it affordable, is it practical? Maybe you’ve always dreamed of setting up shop in the small village you grew up in, but is there enough demand to warrant it?

You may need to move further than you planned or maybe even to somewhere you’ve never heard of. Don’t rule anywhere out and make sure you consider the entire nation. There are some great practices out there!

Think about what services you want to provide too. NHS contracts might guarantee income, but they have their own drawbacks as well. Private dentistry requires a lot more effort in terms of marketing, but the financial rewards are potentially far greater.

It’s essential that you do your own market and demographic research before you buy any practice. What services does the area want? What kind of patients are you going to be attracting? Are there more families or young professionals locally?

Make sure you’re getting the right price for your new practice. Don’t pay over the odds because the practice has room to grow. Only pay exactly what the practice is worth.

There are many factors that you will need to consider when purchasing a dental practice and it can be difficult when you have finished a long day in the practice.

Our Buyer’s Advisory Service can provide you with the answers to these questions.

Be Diligent with Due Diligence

The due diligence is one of the most important steps when buying a dental practice. The better the due diligence, the more equipped you will be as a buyer to make an informed decision.

Remember that the selling agents will make the practice seem like the best option on the market. It’s the job of due diligence to figure out how much of that is true and to discover any issues or potential problems that you need to be aware of.

In most cases you are purchasing the goodwill of the business and this may have been undertaken by associates. Does the practice have a detailed drafted agreement in place with their associates?

Is the Practice Lease term as expected?  Banks usually match the lease term to the loan term. If the lease only has 2 years remaining, then the loan term will normally be for 2 years.

Leave no stone unturned and make sure everything is examined in microscopic detail. You cannot put enough time and effort into the due diligence!

There are so many different aspects that make up a business such as finances and accounts, staffing contracts, property agreements etc. It is essential that each one of them is examined in detail so you have the clearest picture possible of the business you are purchasing.

You can read more about due diligence when buying a practice here.

Hire a Specialist Dental Solicitor

Therefore, a good specialist healthcare solicitor is vital when buying a dental practice. Make sure your solicitor has specific knowledge and experience in the UK’s dental sector!

The healthcare sector has many nuances that are very sector-specific and you will need a solicitor with experience within this sector to make sure that they are dealt with correctly.

For example, if your solicitor has not completed the CQC and NHS contract transfer correctly then this can delay the practice purchase and may even result in you losing the practice.

The NHS require a certain timeframe in which to complete a transaction. For instance, they usually want notice within 28 days of the first of the month. If your solicitor is not aware of the notice periods and the particular days that the NHS want notices served, this could put your purchase at risk, or at least delay it.

Listen to our podcast with Kate Ford from Rudlings Wakelam Solicitors discussing the legal pitfalls of buying a dental practice.

Raise the Right Finance for Buying a Dental Practice

How are you funding the practice purchase?

When you’re buying a dental practice, most banks will expect a deposit of 10-20%, with the remainder of the purchase financed via a loan. There are several options available to you when it comes to acquisition finance. Shop around the different financial lending institutions, consider different funding options and choose the one that best suits your situation.

Just as we’d advise contacting an experienced dental solicitor, we’d also strongly advise you contact an experienced commercial finance broker.

Yes, you could go to the different banks and lending institutions yourself and get a range of finance offers. However, a commercial finance broker with experience and networks in the UK’s banking sector, like Samera Finance, will be able to source better deals and negotiate more favourable terms.

Finance brokers know what the banks are looking for in terms of a lending prospect. They know what banks want to see in an application. They know what a successful business plan looks like. They know how to make sure your application is approved for the best deal for your business.

You can find more articles and videos on financing a dental practice here.

Buying a Dental Practice: Get Started

When buying a dental practice (especially if it’s for the first time), you need the competent hands of qualified professionals. Not only have we been helping the UK’s dentists to buy, start and sell dental practices for over 20 years, we are dental practice owners ourselves! We know what it takes to buy the right dental practice, we can help you find it, buy it and get it up and running.

Book a free, no-obligation consultation with one of our team at a time that suits you (including evenings). We’ll call you back and have a chat about how we can help buy your dream practice.

With Samera Business Advisors you can rest easy knowing that your investment is secure and your future is brighter. Contact us today so we can help plan for your tomorrow.

Learn More: Buying a Dental Practice

For more information please check out the articles and webinars in the buying a dental practice section of our Learning Centre like the Guide to Buying a Dental Practice.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

Top 10 Mistakes to Avoid When Running a Dental Practice

Running a dental practice, like any business, is like trying to keep several plates spinning at once. You need to be a mixture of dentist, manager and business owner. We’ve been running our own dental practices for over 20 years and we know the mistakes you need to avoid to make it successful. Let’s dive into ten important areas where things can go wrong and figure out how to handle them .

Hiring Cheap vs Hiring Right

Navigating the world of managing a dental practice can be tricky, especially when it comes to building a skilled and reliable team. While keeping costs low is important, hiring people just because they’re cheap can lead to big problems. Let’s explore why hiring the right way is crucial and how to tackle this aspect of dental practice management.

The Pitfalls of Going for Cheap Hires

It might seem like a good idea to hire people who ask for lower salaries to save money. However, this approach can cause serious issues, like a potential drop in the quality of patient care, less teamwork, and overall hindrance to the growth of your practice.

Instead of only thinking about costs, you need to focus on the long-term benefits of investing in skilled individuals. A talented team not only adds to the clinical excellence of your practice but also contributes to its overall success and lasting power.

Strategies for Hiring Right

  • Clearly Define Hiring Criteria: Spell out clear criteria for the roles you want to fill. Identify the essential qualifications, skills, and qualities that align with your practice’s values and goals.
  • Thorough Hiring Process: Take the time to run a thorough hiring process. This includes creating detailed job descriptions, reviewing resumes, conducting in-depth interviews, and checking references. Quick decisions can lead to hiring mistakes.
  • Consider Cultural Fit: While technical skills matter, don’t forget about cultural fit. A team that aligns with your practice’s values creates a positive work environment and enhances patient care.
  • Competitive Compensation: Avoid the pitfalls of hiring cheaply by ensuring your compensation packages are competitive in the industry. This not only attracts top talent but also retains valuable team members.
  • Invest in Education: Allocate resources for ongoing training and professional development. This not only enhances your team’s skills but also shows your commitment to their growth, fostering loyalty and job satisfaction.
  • Use Networking and References: Tap into professional networks and seek references when hiring. Recommendations from trusted colleagues can provide valuable insights into potential candidates’ abilities and work ethic.

Benefits of Hiring Right

  • Improved Patient Satisfaction: A team with the right skills leads to a higher standard of patient care, resulting in increased satisfaction and positive feedback. This can be especially true when it comes to front-of-house staff. 
  • Increased Practice Efficiency: Skilled and experienced staff contribute to the smooth operation of the practice, reducing the likelihood of errors and setbacks.
  • Positive Work Environment: A team that works well together and includes qualified members creates a positive work environment, boosting morale and productivity.
  • Long-term Practice Growth: Investing in the right team sets the foundation for long-term practice growth and success.

Read our article on Building a Dental Team.

Blindly Trusting Partners and Suppliers

Trust is the foundation of a successful partnership. This is especially true when it comes to your suppliers and contractors like builders, maintenance and architects. However, blindly trusting professionals without careful consideration can lead to unexpected problems.

The Risks of Blindly Trusting

While trust is crucial for good professional relationships, blindly trusting can expose your dental practice to various risks, including poor work quality, budget overruns, and project delays. Putting your practice’s foundation in the hands of the first expert without thorough consideration could have consequences affecting both your financial stability and patient care.

Navigating Professional Relationships

  • Conduct Thorough Research: Before committing to any professional service, conduct extensive research on potential architects and builders. Explore their history, reviews, and past projects to assess their competence and reliability.
  • Seek Recommendations: Harness the power of recommendations from trusted colleagues, industry associations, and online platforms. Learning about others’ experiences can provide valuable insights into the excellent skills and capabilities of the professionals you are considering.
  • Request and Verify References: Ask for references from prospective architects or builders and take the time to verify them. Interviewing past clients can give you a clear picture of their performance, reliability, and adherence to timelines.
  • Detailed Contractual Agreements: Develop detailed and comprehensive contractual agreements. Clearly outline project scopes, schedules, financial considerations, and expectations. A well-structured contract minimizes the risk of misunderstandings and disputes down the line.
  • Multiple Bids and Quotes: Don’t settle for the first offer that comes your way. Request multiple bids and quotes to ensure you are getting fair pricing and a comprehensive understanding of the services offered.
  • Visit Completed Projects: Whenever possible, visit projects completed by the professionals you are considering. This firsthand observation can provide a clear sense of their work quality and attention to detail.

Benefits of Strategic Trust-Building

  • Quality Craftsmanship: Building trust through careful selection ensures that you engage professionals committed to delivering high-quality craftsmanship aligned with the standards of your dental practice.
  • Timely Project Completion: Professionals with a proven track record are more likely to adhere to project timelines, preventing disruptions to your practice’s daily operations.
  • Financial Confidence: Fully screened professionals are less likely to surprise you with unexpected costs, providing financial confidence throughout the project.
  • Enhanced Patient Experience: A high-quality project contributes to a positive patient experience. Minimizing disruptions and maintaining a professional environment can positively impact patient perceptions.

Find out more about our Dental Buying Group to make sure you get the right suppliers and partners.

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Did You Know?


  1. Patient Retention vs. Acquisition Costs: It is more cost-effective to retain an existing patient than to acquire a new one, with retention being up to five times less expensive than acquisition. This emphasizes the need for effective patient retention strategies that engage current patients while maintaining high standards of dental care​​.
    Source: Yapi
  2. Impact of Online Reviews: The average dental practice retains only 41% of new patients, and positive personal recommendations are the top reason patients choose one practice over another. This highlights the importance of word-of-mouth referrals and managing online reviews to enhance the practice’s reputation and patient retention​​.
    Source: Doctor Logic
  3. Dental Billing Errors and Costs: Patient acquisition can cost up to 25 times more than patient retention. Additionally, research shows that the average attrition rate in dentistry is 17%, indicating that focusing on patient retention can significantly impact a practice’s bottom line and efficiency​​.
    Source: Oral Health Group

Personality vs. Package

It’s crucial to build a team that not only has the right clinical skills but also works well together. Relying solely on personal qualities when hiring associates, nurses and front-of-house staff can lead to problems, even though a positive personality can improve the workplace. It’s essential you consider the whole package — skills, qualifications, and compatibility with the team — when making hiring decisions for a well-rounded and successful dental practice.

The Pitfalls of Personality-Driven Hiring

While having a positive and friendly personality is an asset, depending only on this quality during the hiring process may overlook essential factors for a successful dental practice. Hiring associates based mainly on personal qualities could result in a mismatch of skills, inadequate qualifications, and potential disruptions to the team’s collaboration.

Balancing Personality and Proficiency

  • Define Comprehensive Hiring Standards: Establish clear hiring standards that include the candidate’s personality, skills, qualifications, and compatibility with the team. Clearly outline the essential traits needed for success in the specific role.
  • Structured Screening: Plan a structured screening that evaluates both technical capabilities and interpersonal skills. Include scenario-based questions to assess how well the candidate can handle real-world problems in a dental practice setting.
  • Assessment of Skills and Qualifications: Give priority to evaluating a candidate’s qualifications and skills. Assess their education, training, and experience to ensure they have the necessary expertise to contribute positively to the clinical aspects of the practice.
  • Team Compatibility Assessment: Consider how well a candidate fits into the existing team dynamics. Evaluate their ability to collaborate, communicate, and contribute positively to the workplace. Team compatibility is crucial for maintaining a strong and pleasant practice culture.
  • Reference Checks: Verify the candidate’s past performance, work ethic, and collaborative ability through thorough reference checks. Insights from past colleagues or supervisors can provide valuable perspectives on the candidate’s overall package.

Benefits of Holistic Hiring

  • Enhanced Clinical Capability: Prioritizing skills and qualifications ensures that your team has the clinical expertise necessary to deliver top-notch patient care.
  • Efficient Team Dynamics: Considering team compatibility contributes to the creation of a workplace where team members collaborate seamlessly, improving overall practice efficiency.
  • Reduced Attrition: A comprehensive approach to hiring reduces the likelihood of mismatches between the candidate and the practice, ultimately lowering turnover rates and promoting team loyalty.
  • Positive Patient Connections: A well-rounded team, combining technical expertise and positive interpersonal skills, contributes to a positive patient experience, fostering patient loyalty and satisfaction.

Associates and Employment Tribunals

It’s crucial to understand and follow the details of employment classifications to avoid legal troubles. Failing to distinguish between associates and employees can lead to potential problems, especially ones that could end up in court. Let’s explore the importance of recognizing each team member’s specific status and following employment rules to ensure a legally sound and friendly dental practice environment.

The Complications of Getting it Wrong

Associates and employees have different legal positions with responsibilities, and not recognizing these differences can lead to serious consequences. Misclassifying team members can result in disputes about qualifications, benefits, and potential legal actions that might end up in court.

Navigating Employment Classifications

  • Understand Legal Distinctions: Learn about the legal differences between associates and employees. While employees have specific rights, entitlements, and legal protections, associates often work as independent contractors.
  • Review Employment Agreements: Clearly define the terms of engagement in employment contracts. Specify the nature of the relationship, whether it’s that of an associate or an employee, along with specific rights, responsibilities, and benefits.
  • Consult Legal Experts: Seek guidance from legal experts specializing in employment law or dental practice management. A legal expert can help you navigate the complexities of employment classifications, ensuring compliance with regulations.
  • Update Contracts Regularly: Keep employment contracts up to date to reflect any changes in the working relationship. This is crucial to adapt to evolving legal requirements and prevent potential mistakes.
  • Communicate Clearly: Be open and honest with team members about their employment status. Explain expectations, responsibilities, and any anticipated changes in their status to avoid confusion or dissatisfaction.

Benefits of Legal Compliance

  • Prevention of Legal Disputes: Recognizing and adhering to legal distinctions prevents disputes about qualifications, benefits, and working conditions, reducing the likelihood of legal actions and court battles.
  • Employee Satisfaction: Clear communication and adherence to employment rules contribute to employee satisfaction, fostering a positive workplace and reducing turnover rates.
  • Upholding Practice Reputation: A legally compliant dental practice builds a positive reputation, both within the community and among patients. This can positively impact the practice’s standing locally.
  • Economic Stability: Avoiding legal disputes and court battles contributes to economic stability by preventing unexpected legal expenses and potential compensation payouts.

Read our article on Leadership Tips for Dentists.

Diversify Workload Distribution

How tasks are assigned among team members plays a crucial role in maintaining efficiency and preventing burnout. Making the mistake of concentrating all tasks in one place—unevenly assigning responsibilities—can lead to a host of problems affecting both your team’s well-being and the overall effectiveness of the practice. Let’s look at the importance of optimizing task distribution to create a fair and productive workplace.

The Pitfalls of Uneven Tasks

Unevenly assigning tasks, whether unintentionally or due to certain team members carrying most of the load, can result in setbacks, lowered morale, and increased burnout. It may lead to reduced job satisfaction, hindering the overall effectiveness of your dental practice.

Strategies for Task Optimization

  • Assess Individual Strengths: Understand the strengths and skills of each team member. Evaluate their abilities, experience, and preferences to align tasks with their resources, promoting efficiency and job satisfaction.
  • Regularly Review Tasks: Periodically review the task distribution among team members. Ensure that no one is consistently overloaded while others have lighter workloads. Regular assessments allow for adjustments as needed.
  • Encourage Open Communication: Create an open and communicative environment where team members feel comfortable discussing their tasks. Encouraging feedback ensures a collaborative approach to managing workloads, addressing concerns proactively.
  • Cross-Training Opportunities: Provide cross-training opportunities to team members to expand their skill sets. This not only prevents your team from relying too heavily on a few individuals but also makes them more adaptable.
  • Implement Efficient Scheduling: Promote efficient scheduling practices that evenly distribute patient appointments and tasks throughout the week. Avoid creating peaks and valleys in workload that can lead to stress and setbacks.

Benefits of Task Optimization

  • Increased Efficiency: Distributing workloads diversely contributes to overall practice efficiency by preventing bottlenecks and ensuring a steady flow of tasks.
  • Prevention of Burnout: Evenly dispersing tasks prevents burnout by avoiding the fatigue and stress associated with consistently heavy workloads.
  • Improved Job Satisfaction: Team members who feel that their tasks are fair and balanced are likely to experience higher job satisfaction, fostering a positive work culture.
  • Optimized Use of Resources: Utilizing the unique strengths of each team member enhances resource utilization, leading to a more efficient and effective dental practice.

Rushed Recruitment Practices

Hiring new team members is a critical step that can significantly impact the success and unity of the team. Rushed recruitment, driven by the urgency to quickly fill positions, can lead to hiring individuals who may not align with the values and goals of the practice. 

The Pitfalls of Rushed Hiring

When the recruitment process is hurried, there’s a risk of hiring individuals who lack the necessary skills, cultural fit, or long-term commitment to effectively contribute to the success of the dental practice. This rushed approach can result in increased turnover, decreased camaraderie, and potential disruptions to patient care.

Strategies for Comprehensive Recruitment

  • Clearly Define Hiring Needs: Clearly articulate the specific requirements and qualifications for the position before starting the recruitment process. Outline the skills, qualifications, and attributes essential for success in the role.
  • Develop Detailed Job Descriptions: Create detailed job descriptions that outline the responsibilities of the position and provide insights into the practice’s culture, values, and expectations. This attracts candidates who resonate with the overall ethos of the practice.
  • Implement an Organized Screening: Establish a well-organized interview process that assesses the candidate’s compatibility with the values of the practice as well as their technical skills. Use behavioural and situational questions to gain insights into their independent direction and problem-solving abilities.
  • Use Multiple Assessment Tools: Go beyond traditional interviews by incorporating other assessment tools like skills assessments, situational judgment tests, and personality evaluations. This multi-layered approach provides a more comprehensive understanding of the candidate’s suitability.
  • Thoroughly Examine References: Conduct thorough reference checks with former employers or coworkers to learn more about the candidate’s work ethic, interpersonal skills, and overall performance in previous roles.
  • Be Patient and Specific: Resist the temptation to rush the recruitment process. Be patient and specific, waiting for candidates who not only meet the technical requirements but also align with the culture and values of the dental practice.

The Benefits of Thorough Hiring

  • Enhanced Team Cohesion: Thorough recruitment ensures that new team members align with the existing team’s values and work closely towards shared goals, fostering a positive workplace.
  • Reduced Attrition: Carefully selecting candidates who are a good fit for the practice can save time and resources associated with frequent recruitment.
  • Increased Job Satisfaction: Team members who align with the practice’s values are likely to experience higher job satisfaction, contributing to overall morale and productivity.
  • Consistent Patient Experience: Patients’ confidence in the dental team is strengthened when they are hired by individuals who share the practice’s core values.

Avoid Team Dependency

The success of a practice is closely tied to the strength and diversity of its team. Relying too much on a few key team members can pose significant risks to the practice’s stability and adaptability. Avoiding team dependence and instead building a well-rounded team with diverse skills and qualities ensures flexibility in the face of unexpected challenges.

The Pitfalls of Depending Too Much on a Few

Heavily depending on a few key team members, while seeming efficient in the short term, can lead to vulnerabilities when these individuals are unavailable or encounter unexpected challenges. Team dependence poses risks to continuity, efficiency, and the overall adaptability of the practice.

Strategies to Avoid Team Dependence

  • Identify Key Skills and Roles: Clearly identify the essential skills and roles necessary for the smooth operation of the practice. Ensure that no single team member possesses exclusive knowledge or skills critical to essential functions.
  • Cross-Train Team Members: Implement cross-training programs to enhance the skill set of team members. This ensures that multiple individuals are proficient in key areas, reducing reliance on specific individuals.
  • Encourage Knowledge Sharing: Cultivate a culture of knowledge sharing within the team. Encourage team members to share their expertise, insights, and best practices, promoting a collaborative environment.
  • Establish Clear Protocols and Procedures: Develop clear protocols and procedures for key tasks and responsibilities. This documentation ensures that tasks can be seamlessly assigned or taken over by other team members in case of absence or unforeseen circumstances.
  • Regular Team Meetings: Conduct regular team meetings to discuss ongoing projects, challenges, and opportunities. This improves communication and ensures that all team members are aware of current initiatives and responsibilities.
  • Foster Leadership Development: Promote the development of leadership skills among team members. Cultivate a team culture where individuals are empowered to take on leadership roles when needed, distributing decision-making responsibilities.

Benefits of Avoiding Team Dependence

  • Continuity of Operations: Even when certain team members are unavailable, practice operations can continue to run smoothly due to the diversification of skills and responsibilities.
  • Enhanced Adaptability: A well-rounded team with diverse skills is more adaptable to changes, challenges, and unexpected events that may impact day-to-day operations.
  • Reduced Vulnerability: By avoiding team dependence, the practice becomes less vulnerable to disruptions caused by vacations, sick leaves, or unexpected departures of key team members.
  • Improved Team Morale: An equitable distribution of responsibilities and acknowledgment of each team member’s contribution enhances team morale and fosters a positive workplace.

Not Keeping an Eye on the Finances

Keeping an eye on finances is crucial for long-term success and sustainability. Ignoring careful financial management, especially in the early stages of the practice, can strain resources and hinder the achievement of practice goals. Being mindful of spending, creating realistic budgets, and avoiding unnecessary expenses helps to ensure financial security.

The Pitfalls of Ignoring Financial Prudence

Overlooking the financials can lead to overspending, budget overruns, and financial strain, especially in the developmental stages of a dental practice. This oversight may compromise the practice’s ability to grow strategically, invest in essential resources, and withstand unforeseen financial challenges.

Financial Prudence Strategies

  • Create a Realistic Budget: Develop a comprehensive and realistic budget that covers all aspects of your dental practice, including equipment, staffing, marketing, and other expenses. Ensure that your budget aligns with your practice’s short-term and long-term goals.
  • Regularly Monitor Financial Performance: Establish regular financial analysis and monitoring. Track income, expenses, and key performance indicators to identify trends and areas where adjustments may be necessary.
  • Prioritize Essential Expenditures: Prioritize essential expenditures that directly contribute to the quality of patient care and the efficiency of practice operations. Invest wisely in equipment, technology, and training that enhance the overall patient experience.
  • Avoid Impulse Buys: Resist the temptation of impulse purchases. Evaluate the necessity and long-term value of any investment before committing financial resources, ensuring that each expense aligns with your practice’s objectives.
  • Negotiate Vendor Agreements: Negotiate vendor agreements to secure favourable terms and pricing for essential supplies and services. Regularly review contracts to identify potential cost-saving opportunities.
  • Prepare for Emergencies: Include a contingency fund in your budget for emergencies or unforeseen costs. Planning for contingencies provides a financial safety net and mitigates the impact of unexpected challenges.

Benefits of Financial Prudence

  • Positioning for Financial Stability: Implementing financial prudence ensures a stable and secure financial position for your dental practice, allowing for strategic planning and growth.
  • Sustainable Growth: Careful financial management supports sustainable growth, enabling your practice to invest in essential resources and seize critical opportunities as they arise.
  • Reduced Financial Stress: By avoiding unnecessary expenses and adhering to a well-planned budget, you reduce financial stress and create a more resilient practice.
  • Boost in Profitability: Minimizing unnecessary expenditures and optimizing resource allocation efficiency, financial prudence contributes to improved profitability.

Check out our articles and webinars on finance for dentists.

Not Seeking Professional Advice

Getting expert advice is essential to run your practice. If a practice doesn’t realize how crucial it is to seek guidance, especially in legal and financial matters, it might end up facing problems that could have been avoided. A great dentist isn’t necessarily a great business owner, so it’s crucial you get the advice of those who are.

The Pitfall of Underestimating Professional Guidance

Underestimating the need for professional advice in legal and financial matters might lead to non-compliance with rules, legal disputes, financial mismanagement, and missed opportunities for strategic growth. Ignoring expert guidance can disrupt the overall success and sustainability of a dental practice.

Approaches for Seeking Professional Counsel

  • Establish an Expert Network: Identify and connect with professionals specializing in dental practice management, including legal advisors, accountants, and financial experts. Build a network of experts who understand the specific challenges and regulations of the dental industry.
  • Regular Consultations: Schedule regular consultations with legal and financial experts to review the operational and financial aspects of your practice. This proactive approach allows you to address issues before they escalate.
  • Compliance Audits: Conduct compliance audits with the assistance of legal experts to ensure that your practice adheres to industry standards, ethical norms, and legal requirements. Identify and rectify any potential compliance gaps.
  • Financial Planning and Strategy: Collaborate with financial advisors to develop a comprehensive financial plan and strategy for your dental practice. This includes budgeting, tax planning, investment strategies, and long-term financial goals.
  • Stay Informed on Industry Changes: Legal and financial landscapes evolve, and staying informed is crucial. Rely on the expertise of professionals to keep you updated on industry changes, new regulations, and best practices that may impact your practice.
  • Address Legal Issues Promptly: Utilize the advice of legal professionals to address legal issues as soon as they arise. Delaying or mishandling legal issues can lead to more significant challenges and financial implications.

Benefits of Seeking Professional Advice

  • Risk Mitigation: Professional advice identifies and mitigates potential risks, ensuring that your dental practice operates within legal and regulatory boundaries.
  • Financial Stability: Financial experts contribute to the stability of your practice by providing sound financial advice, helping you make informed decisions aligned with your business goals.
  • Legal Compliance: Legal professionals ensure that your practice complies with industry standards, preventing legal issues and safeguarding your reputation.
  • Strategic Insights: With the assistance of expert guidance, you can overcome obstacles and capitalize on favourable market conditions, opening doors to strategic growth opportunities.

Book a free consultation with us to find out how we and our partners can help.

Not Embracing Technology and Marketing:

Using technology and adopting effective marketing strategies are crucial for staying competitive and enhancing online visibility. Neglecting technological advancements and marketing efforts can result in missed opportunities for practice growth and patient engagement. This section explores the importance of embracing technology, regularly updating your website, and considering early implementation of Pay-Per-Click (PPC) advertising to propel your dental practice into the digital age.

The Risks of Ignoring Technology

A dental practice may stagnate if it doesn’t embrace technology and leverage the potential of digital marketing. In today’s digital era, patients often seek information online, and a lack of technological integration can lead to reduced visibility, patient engagement, and competitiveness.

Strategies for Marketing and Technology Integration

  • Regular Website Updates: Ensure your practice’s website is regularly updated to reflect current information, services, and any advancements in technology or treatments. An informative and user-friendly website is crucial for attracting and retaining patients.
  • Implement Pay-Per-Click (PPC) Advertising: Consider the early adoption of PPC advertising to boost your practice’s online visibility. Well-executed PPC campaigns can increase website traffic, attract new patients, and provide measurable results.
  • Adopt Electronic Health Records (EHR): Embrace Electronic Health Records (EHR) systems for efficient patient management, streamlined workflows, and enhanced communication within your practice. EHR systems contribute to improved patient care and operational efficiency.
  • Leverage Telehealth Solutions: Explore telehealth solutions to offer virtual consultations, follow-ups, and patient education. Telehealth can be a valuable addition to your practice’s service offerings, making it easier for patients to access healthcare remotely.
  • Utilize Social Media Marketing: Social media platforms provide a robust channel for patient communication and community building. Social media marketing is an effective way to connect with your audience, share valuable content, and showcase your practice’s expertise.
  • Implement Online Appointment Scheduling: Online appointment scheduling can simplify the scheduling process for your practice and make it more convenient for patients. This technology can enhance patient satisfaction and practice efficiency.

Benefits of Embracing Innovation and Marketing

  • Enhanced Online Visibility: Regular website updates and digital marketing efforts contribute to improved online visibility, attracting potential patients and retaining existing ones.
  • Competitive Advantage: Embracing technology gives your practice a competitive edge by staying up to date with industry trends, demonstrating innovation, and meeting the expectations of tech-savvy patients.
  • Improved Patient Engagement: Technological advancements, such as telehealth and online scheduling, increase patient engagement by providing accessible and user-friendly healthcare options.
  • Measurable Marketing ROI: PPC advertising offers measurable return on investment, allowing you to track the success of your marketing campaigns and make data-driven decisions.

In conclusion, successfully managing a dental practice requires a strategic and holistic approach. By avoiding these common mistakes and adopting best practices, you can cultivate a thriving and resilient dental practice that provides excellent patient care and stands the test of time.

Check out our articles and webinars on digital marketing for dentists.

Grow Your Dental Practice with Samera

Join the Samera Alliance buying group today for free to save money on your consumables and assets, increase your profits and grow your dental practice.

You’ll get access to exclusive discounts on the consumables, products and equipment you need to build and grow your dental practice. You’ll also get exclusive discounts from our Alliance Partners, covering everything from HR, IT and legal services to utilities, compliance and dental technology.

Join for free. Save money. Grow your dental practice.

More on Growing a Dental Practice

For more information on growing a dental practice, check out the articles and webinars in our Learning Centre, like our guide on How to Grow a Dental Practice.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

How to Become a Practice Owner

Starting a Dental Practice: Get Started

We’ve been helping the UK’s dentists start their own practices for nearly 20 years and we know exactly what it takes to make your practice a success!

Our Dental Practice Start-up Programme is a hands-on consultancy service designed to take you through your whole journey to becoming a dental practice owner. Book a free, no-obligation consultation with one of our team at a time that suits you (including evenings). We’ll call you back and have a chat about how we can help start your dream practice.

Contact us today for all the advice, support and expertise you’ll ever need to start a dental practice.

Learn More: Starting a Dental Practice

For more information please check out the articles and webinars in the start a dental practice section of our Learning Centre, like our guide on How to Start a Dental Practice in 13 Steps.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

Fees and Cost of Buying a Dental Practice

When buying a dental practice in the UK, the initial expenses vary based on location, practice size, equipment, and staffing needs. Just like any investment, thorough research and planning are crucial before making a decision. 

Let’s delve into the initial costs of acquiring a dental practice in the UK, covering the practice’s cost, legal and accounting fees, equipment expenses, and staffing costs. Understanding these costs helps you make informed decisions about the investment potential and ensures your investment is a wise one.

Buying a Dental Practice in the UK

Buying a dental practice in the UK is a big deal, both in terms of money and your professional life. Making this decision needs careful thought and understanding the initial costs involved. Whether you’re a new dentist ready to start your own practice or a seasoned pro looking to expand, knowing the ins and outs of the process and the financial side is crucial.

Firstly, understanding the market is key. Dentists need to look at their local market, considering factors like the people who might be patients, the competition around, and how much demand there is for dental services. This analysis helps figure out whether you can add value to the practice you buy.

Secondly, you should compare the cost of buying an existing practice versus starting a new one. Things like location, practice size, the number of patients, equipment, and staff all play a role in figuring out the financial side. It’s crucial to thoroughly check the practice’s financial records, future predictions, and potential income before making a decision.

While the initial costs of buying a dental practice in the UK can be hefty, there are potential perks that make it a tempting investment. Owning a practice gives dentists the chance to be their own boss, grow professionally, and earn more money. It lets them create their own practice philosophy, build long-term relationships with patients, and have more control over their career.

However, it’s important to recognize the challenges and risks that come with owning a practice. Handling the financial aspects, like cash flow, expenses, and insurance, needs careful planning and financial smarts. Dentists also need to be ready for administrative duties, marketing strategies, and overall practice management.

In conclusion, buying a dental practice in the UK is a major decision that requires a solid understanding of the initial costs. Before making a move, you need to consider market dynamics, follow the rules, and think about the financials. While there are potential benefits to owning a practice, being fully prepared for the challenges is crucial. Through thorough research and seeking professional advice, dentists can make informed decisions and embark on a successful journey toward practice ownership.

Click here to read our article on starting vs buying a dental practice.

Initial costs of purchasing a dental practice

When thinking about buying a dental practice it’s crucial to understand the initial costs. Factors like where the practice is, how big it is, and its condition can all affect these costs.

The major upfront cost is the actual price of the practice. This can be a big investment, and it’s often determined by things like how much money the practice makes, the number of patients, the equipment, and its reputation. It’s important to carefully estimate these costs to make sure the price matches the value of the practice and its potential for growth.

Aside from the purchase price, there are other costs to think about. Legal fees and professional services, like hiring an accountant or consultant, are necessary to navigate the complex process of buying a dental practice. These professionals will help review financial records, contracts, and legal documents to ensure a smooth transaction.

It’s also important to remember that you will need to purchase the assets in the practice seperately to the practice itself. This means that when you buy a practice, you’ll also need to purchase the equipment and technology like the chairs, x-rays etc.

Most buyers will need a loan to fund the purchase, and the interest rates and terms of the loan will impact the overall cost. To get the best deal you need to shop around and compare offers from different lenders.

Renovations and equipment upgrades are often necessary when buying a dental practice. These costs can vary based on the condition of the current office and the age and functionality of the equipment. Budgeting for these expenses is important to ensure the practice is up-to-date and meets the necessary regulatory requirements.

Lastly, considering the ongoing operational costs after buying a dental practice is crucial. These include expenses like rent, utilities, staff salaries, supplies, and marketing efforts. Careful financial planning and budgeting are essential to ensure the practice is profitable and successful in the long run.

Understanding the initial costs of buying a dental practice is vital for aspiring practice owners. Proper financial planning, thorough estimation of expenses, and professional assistance can help navigate these costs and make an informed investment decision.

Click here to read our article on How to Finance a Dental Practice.

Acquisition Cost of the Practice

Most buyers will use acquisition finance to fund the purchase of their new practice. Unless you have the cash available to buy it, you’ll most likely need an acquisition loan to buy the practice. 

You will need a deposit for the purchase of around 10-20%, but this will vary depending on the lender, the practice and several other factors. Most banks and lenders will fund about 80% of the goodwill of the practice.

Read our article on acquisition finance here.

To figure out the real value and potential for growth of the practice, it’s important to thoroughly check its financial records and performance during the due diligence. This has to involve getting help from a dental practice expert or someone specialised in practice acquisitions.

By thoroughly checking the cost of getting the practice, considering funding options, and estimating the expenses, potential buyers can make informed decisions when investing in a dental practice. It’s important to make sure the cost aligns with the practice’s true potential for growth and profit, ultimately laying the groundwork for a successful and rewarding dental career.

Click to find out more about our acquisition finance services.

Legal and Professional Fees

It’s also important to consider the legal and professional fees that come with the process. These fees are crucial to make sure everything goes smoothly and follows the law.

Getting help from a specialist in dental practice acquisitions is highly recommended. They’ll guide you through the complicated legal parts of the purchase, making sure all contracts and agreements are done right. They’ll also do a thorough check to find any possible legal risks or issues with the practice.

You will also want to hire a dental accountant or a financial advisor for professional advice. They’ll help you do a detailed financial analysis of the practice, looking at its profit, income, and potential for growth. These pros will give you important insights that’ll help you make smart decisions and negotiate the best terms for the purchase.

It’s important to know that legal and professional fees can vary depending on how complicated the deal is and the specific services you need. Things like the size and location of the practice, the number of staff, and any legal or financial problems can all affect the overall cost.

While these fees might seem like an extra expense, investing in these services is crucial to make sure your acquisition is successful and legally sound. By getting experts involved, you can navigate the complexities of the process with confidence, protecting your investment and setting yourself up for long-term success in the dental industry.

Click here to find out more about 7 Legal Pitfalls to Avoid when Buying a Dental Practice.

Due Diligence Expenses

When you’re thinking about buying a dental practice, it’s important to set aside resources and understand the costs involved in a thorough due diligence process. Doing a comprehensive due diligence is a crucial step in the acquisition process because it helps you uncover potential risks, liabilities, and opportunities related to the practice.

The cost of a due diligence process can vary depending on factors like the size of the practice, how complicated the deal is, and how much detail is needed. It’s highly recommended to seek the help of professionals, such as lawyers and accountants, who specialise in dental practice acquisitions to ensure a thorough evaluation.

Legal costs are a significant part of due diligence. Bringing in an expert with experience in dental practice acquisitions will help you navigate the complex legal aspects of the process. They’ll review contracts, leases, licences, and other legal documents to ensure compliance and identify any potential issues that might affect the purchase.

Accounting costs are another important part of due diligence. An experienced dental accountant can help you analyse the financial health of the practice by examining financial statements, tax records, and conducting a thorough assessment of the practice’s assets and liabilities. This evaluation provides valuable insight into the profitability and financial stability of the practice.

Additionally, it’s wise to allocate resources for other due diligence costs like property inspections, equipment evaluations, and environmental surveys. These assessments will help identify any potential risks or additional costs associated with the physical aspects of the practice.

While due diligence costs might seem like an extra financial burden, they are a necessary investment to ensure a smooth and successful acquisition. By conducting a comprehensive evaluation of the practice, you can make informed decisions, mitigate risks, and potentially negotiate a more favourable deal.

Remember, understanding and budgeting for due diligence costs is a crucial step in the process of buying a dental practice in the UK. It’s always best to consult with professionals who specialise in dental practice acquisitions to ensure a thorough assessment and a successful transaction.

Click here to find out more about our due diligence services.

Property and Equipment Costs

When figuring out how much a dental practice will cost, you also need to think about the expenses tied to the property and equipment. These costs can vary a lot depending on where the practice is, how big it is, its condition, and what it specifically needs.

First things first, you need to check out the actual property. If you’re planning to buy a dental practice with an existing location, you should look into the condition of the building. To make sure there aren’t any big problems or repairs needed, you might need to hire a professional inspector. You should also think about any necessary renovations or adjustments to meet the specific needs of your practice.

Besides the property, you’ve got to invest in the existing assets like dental equipment and supplies. This includes things like dental chairs, X-ray machines, sterilisation equipment, dental tools, and other necessary gear. The cost of these items can vary depending on the brand, quality, and specific requirements.

Also, it’s crucial to budget for ongoing maintenance costs for your equipment and property. Regular upkeep and servicing are necessary to ensure your dental equipment lasts a long time and works at its best. It’s recommended to set aside resources for these purposes to avoid unexpected costs down the road.

Taking a close look at the costs of property and equipment is crucial when figuring out the initial costs of buying a dental practice. Proper planning and preparation in this area will contribute to the long-term success and profitability of your dental practice.

Click here to find out more about our property finance services.

Licensing and Regulatory Fees

The General Dental Council (GDC) and other rule-setting bodies have strict rules, so these fees are necessary to make sure everything follows the rules.

Getting a dental practice licence is a must for any dentist looking to run their own practice. The licensing process involves a thorough check of the practice’s facilities, equipment, and infection control procedures to make sure patients are safe and getting quality care.

The fees for licensing can vary based on the size and location of the practice. They usually cover things like processing applications, inspections, and making sure the practice continues to meet the rules. Since these fees can significantly impact the money you need to start a dental practice, it’s crucial to include them in your budget.

Apart from licensing fees, there are also regulatory costs to think about. The GDC, as the regulatory body for dentists in the UK, requires dentists to yearly register and maintain their registration. This registration fee ensures that dentists are qualified, skilled, and follow professional standards.

Knowing and planning for these licensing and regulatory fees is crucial for anyone looking to invest in a dental practice. It’s recommended to consult with professionals experienced in dental practice acquisitions to accurately assess these costs and ensure compliance with all legal and regulatory requirements. By properly budgeting for these fees, potential practice owners can make informed financial decisions and embark on their journey to owning a successful dental practice.

Insurance Costs

Just like any other business, dental practices need insurance coverage to protect against various risks and liabilities.

One of the main insurance agreements that dental practice owners should think about is professional indemnity insurance. This type of insurance is designed to provide coverage in case of professional negligence or malpractice claims. It protects both the dentist and the practice from potential financial losses and damage to their reputation.

The cost of professional indemnity insurance can vary depending on factors like the size of the practice, the number of dentists and staff members, the location, and the level of coverage needed. It’s advisable to shop around and compare quotes from different insurance providers to make sure you’re getting the best coverage at a competitive price.

In addition to professional indemnity insurance, dental practice owners may also need to consider other types of insurance, such as public liability insurance and employer’s liability insurance. Public liability insurance provides coverage for any claims made by members of the public who might be injured or suffer property damage while at the dental practice. Employer’s liability insurance, on the other hand, is legally required in the UK and provides coverage for claims made by employees who might be injured or become ill due to their work.

The cost of insurance can be a significant expense for a dental practice, especially when starting out. However, it’s a necessary investment to protect both the practice and its patients. Working with an experienced insurance broker specialising in dental practices can help you navigate the available options and find the coverage that best suits your specific needs.

Remember, although insurance costs may add to the initial costs of buying a dental practice, they ultimately provide financial security and peace of mind. Prioritising insurance coverage ensures that you are investing in the sustainability and success of your dental practice.

Financing options for purchasing a dental practice

When it comes to buying a dental practice, financing is a crucial aspect to think about. The initial costs can be significant, but fortunately, there are various financing options available to help dentists achieve their dream of owning a practice.

One common financing option is a business loan from a bank or financial institution. These loans usually come with competitive interest rates and flexible repayment terms. Dentists can use loans to cover the practice’s purchase price, equipment costs, leasehold improvements, and other necessary expenses.

Another option is to explore lenders specialising in dental financing who understand the unique needs of dental professionals. These lenders might offer specific loan programs tailored specifically for dentists, which can include benefits like lower down payments and extended repayment periods.

In addition to traditional loans, dentists may also consider partnering with other dental professionals to share the financial burden. This can be done through partnerships, joint ventures, or even forming a dental group practice. By pooling resources and sharing costs, dentists can access the funds needed to buy a practice while minimising individual financial risks.

It’s crucial for dentists to carefully evaluate the terms of any financing option before committing to a decision. Factors such as interest rates, repayment terms, eligibility criteria, and potential collateral requirements should be thoroughly considered. Consulting with a financial advisor or dental practice expert can be helpful in navigating the complexities of financing options and making an informed decision.

Ultimately, understanding the available financing options is essential for dentists looking to purchase a dental practice. By exploring various avenues and selecting the most suitable option, dentists can turn their dream of practice ownership into a reality while managing the initial costs effectively.

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Did You Know?


  • Initial and Ongoing Costs: Opening a dental practice involves several significant expenditures, including premises, equipment, and staff salaries. Valuation and solicitor fees alone can total up to £18,500. The necessary dental equipment could total over £120,000. On average, the profit made by a dental practice in the UK in its first year is between £40,000 to £60,000​​.
    Source: Readers Digest
  • Legal Considerations: When buying or selling a dental practice, it’s essential to have a Sale and Purchase Agreement (SPA) that addresses specific dental practice needs, including NHS contracts and employment issues. The legal costs for such transactions can range from £5,000 to £15,000 + VAT and disbursements, depending on the complexity​​.
    Source: Scott Bailey
  • Banks and Financing: When approaching banks for financing the purchase of a dental practice, it’s important to prepare a solid business plan and undergo a stress test to demonstrate the practice’s profitability and your capability to manage the financial responsibilities. Banks offer terms up to 20 years to aid affordability, with deposits for goodwill valued at 10% and 100% lending on freehold properties​​.
    Source: Dentistry.co.uk

Commercial Loans

For many aspiring practice owners, a commercial loan becomes a necessary financial tool because investing in a dental practice requires a significant amount of capital.

Acquisition loans can provide the necessary funds to cover the practice’s purchase price, usually about 70-80% of the goodwill.

Other costs like the assets will need to be funded separately as they will not be included in an acquisition loan. A commercial business loan or asset finance will usually be needed to cover everything outside the actual purchase. 

To secure a business loan, it’s essential to have a well-prepared business plan that highlights your vision, projected finances, and growth potential. Lenders will assess your creditworthiness, financial history, and the viability of the practice you plan to acquire.

Interest rates and loan terms can vary depending on factors like the lender, your credit score, and the amount you want to borrow. It’s advisable to shop around and compare offers from different lenders to ensure you secure the most favourable terms for your circumstances.

Click here to read A Guide to Acquisition Finance.

Additionally, some lenders may require collateral to secure the loan, such as the dental equipment or the property itself. It’s crucial to carefully review the loan agreement and understand the terms, repayment schedule, and any potential risks involved.

While getting a business loan may involve additional costs like application fees and legal expenses, it can be a worthwhile investment in establishing and growing your dental practice. Proper financial planning and seeking professional advice can help streamline the loan application process and ensure you are well-prepared to handle the financial commitments associated with buying a dental practice.

Remember, investing in a dental practice is a long-term commitment, and understanding the upfront costs, including business loans, is crucial for making informed decisions and putting yourself in a favourable position.

Click here to find out more about commercial loans for dentists.

Asset-based Finance

Asset-based financing is a way to fund the upfront costs of buying the assets in a dental practice. With this type of financing, you can secure a loan or a line of credit by using the assets already present in the practice.

One advantage of asset-based finance is its flexibility and tailored approach. Lenders typically consider the value of the assets and the potential income of the practice, allowing for a more personalised approach to financing. This can be especially helpful for new dentists or those looking to expand their existing practice, as it provides an opportunity to obtain the necessary funds without depleting personal savings or taking on excessive debt.

It’s important to note that asset-based finance requires a thorough assessment of the practice’s assets and potential risks. Lenders will evaluate the value and condition of the assets, as well as the overall financial health and viability of the practice. Through this assessment process, lenders can better customise the loan amount and terms to the specific circumstances of the practice.

Click here to read A Guide to Asset Finance for Dentists.

When exploring asset-based finance options, it’s advisable to work closely with experienced professionals, such as dental practice specialists or financial advisors. They can guide you through the process and help you assess the feasibility and potential benefits of this financing option.

In summary, asset-based finance is a viable option for dental professionals considering the upfront costs of purchasing a dental practice in the UK. By leveraging the assets within the practice, you can access the necessary funds to acquire the practice and embark on your journey towards a successful dental career.

Click here to find out more about our asset finance services.

Private Investors or Partnerships

If you’re thinking about investing in a dental practice in the UK, private investors or partnerships could be a smart option. These investors not only provide the necessary funds for the purchase but also bring valuable expertise and industry connections.

When considering private investors or partnerships, it’s crucial to carefully review the terms of the arrangement. This involves determining the level of control and decision-making power that the investor or partners will have in the practice. Striking a balance between obtaining financial support and maintaining the independence and vision for the practice is crucial.

Private investors may offer various benefits, such as access to additional funding sources, business insights, and guidance in managing the practice. They can bring fresh perspectives and ideas, helping to drive growth and success. However, it’s essential to thoroughly vet potential investors or partners to ensure they align with your goals and values.

Partnerships, on the other hand, can provide shared responsibility and commitment, allowing for a more collaborative approach to managing the practice. This can be particularly advantageous for new dentists or those looking to expand their existing practice. Partnerships offer a supportive environment where partners can learn from each other, share resources, and collectively navigate the challenges of running a dental practice.

When exploring private investors or partnerships, it’s advisable to consult with legal and financial professionals specialising in these types of arrangements. They can help ensure that the terms and agreements are fair and protect the interests of all parties involved.

For those seeking to invest in a dental practice in the UK, private investors or partnerships might indeed be a wise choice. By carefully weighing the pros and cons and conducting thorough due diligence, practitioners can find the right investment partners to help them achieve their goals and elevate their dental practice to new heights.

Factors Influencing the Initial Costs

Several factors can influence the initial costs when buying a dental practice in the UK. It’s crucial to carefully consider these factors to make an informed decision and plan your investment wisely.

The location of the dental practice is a key factor that can significantly impact the initial expenses. Practices in prime locations, like downtown areas or affluent neighbourhoods, tend to have higher purchase costs. On the other hand, practices in more rural or less convenient locations may have lower initial expenses. Evaluating the potential patient base and competition in the area is essential in determining the value of the practice.

The size and condition of the practice also play a role in determining the initial costs. A larger practice with spacious treatment rooms and advanced equipment may command a higher purchase price. Additionally, if the practice requires renovations or upgrades to meet regulatory standards or align with your vision, these costs should be factored into the initial investment.

The goodwill and patient database of the practice are additional considerations. Established practices with a loyal patient base and positive reputation in the community may come with a higher price tag. The potential for future business and the value of the relationships built over time are reflected in this goodwill.

It’s also important to consider any existing contracts or agreements associated with the practice. This includes agreements with associates or staff members, equipment leases, contracts with suppliers, and premises leases. These ongoing contractual commitments should be evaluated to determine their impact on the initial costs and potential long-term financial obligations.

Last but not least, professional services and advice should be included in the initial costs. Engaging the services of a dental practice broker, consultant, accountant, or financial advisor can provide valuable guidance, but it’s crucial to account for their fees when planning your investment.

Understanding these factors and conducting thorough due diligence will help you determine the initial costs involved in buying a dental practice in the UK. By considering these factors, you can make an informed decision and set realistic financial expectations for your investment in the dental industry.

Click here to read our article on determining the value of a dental practice.

Location of the Practice

When it comes to investing in a dental practice in the UK, one of the most crucial factors to think about is the location of the practice. The success and profitability of the dental practice depend heavily on where it is situated.

Firstly, you need to examine the demographics of the area where the practice is located. Is it a densely populated residential area? Is it a commercial district? Understanding the local population and their dental care needs is crucial in assessing the potential patient base and the demand for dental services.

Additionally, consider the competition in the vicinity. Are there already established dental practices nearby? If so, it’s essential to evaluate their services, reputation, and patient base. Analysing the competition can help you identify gaps in the market and opportunities for setting your practice apart.

Moreover, convenience and accessibility are crucial factors. Is the practice situated in a prominent and easily accessible location? Is there ample parking available for patients? These factors can significantly impact patient retention and attract new patients.

Another aspect to explore is the overall infrastructure and amenities in the surrounding area. Are there hospitals or medical centres nearby? Are there schools or businesses in the vicinity? These factors can contribute to a steady flow of potential patients.

The costs can vary significantly depending on the area, and having a clear understanding of the financial implications before committing to any obligations is crucial.

By carefully assessing the location of the dental practice, you can make an informed decision about the initial costs and potential return on investment. Remember that establishing a solid foundation for a profitable dental practice in the UK is possible by investing in the right location.

Click here to read our article on Should I Buy Leasehold or Freehold?

Size and Condition of the Practice

When figuring out the initial costs of buying a dental practice in the UK, it’s crucial to look at its size and condition. The size refers to the physical space available for patient care, staff, and equipment. It’s important to check if the practice has enough treatment rooms to handle patient flow and meet the dentist’s desired workload.

Moreover, the condition of the practice plays a significant role in determining the required initial investment. Assessing the condition involves examining the age and functionality of dental equipment, the state of the facilities, and any necessary renovations or upgrades.

If the practice is well-maintained and equipped with modern technology, it might demand a higher initial investment. However, this could also mean that the practice is more likely to attract patients and generate revenue in the long run.

On the flip side, if the practice is in poor condition or lacking in equipment, it might require a lower initial investment. Yet, the buyer needs to carefully consider the costs associated with renovation and purchasing new equipment, as these expenses can accumulate quickly.

In conclusion, the size and condition of the dental practice are crucial factors to consider when assessing the initial costs. By thoroughly evaluating these aspects, potential buyers can make informed decisions regarding their investments and ensure a smooth transition into practice ownership.

Reputation and Patient Base

When thinking about buying a dental practice in the UK, it’s crucial to evaluate the reputation and patient base of the practice. This factor can significantly impact the success and profitability of your investment.

A reputable dental practice holds great value. Patients are more likely to trust a practice with a positive image and a history of providing quality care. A strong reputation can attract new patients and help retain existing ones. Conversely, a tarnished reputation can be challenging to rebuild and may require substantial efforts to regain the trust of patients.

Assessing the patient base of the dental practice is equally important. Understanding the demographics, size, and loyalty of the patient base can provide valuable insights into the practice’s true potential for growth and sustainability. A larger patient base means more potential for generating revenue, while a loyal patient base ensures a steady income source.

Conducting thorough due diligence to evaluate the reputation and patient base of the dental practice is essential. This might include analysing patient retention rates, communicating with current patients, and reviewing online reviews. Additionally, consider the location of the practice and its proximity to potential patients, as this can also impact the patient base.

Investing in a dental practice with an established reputation and a strong patient base may come with a higher initial cost, but it can provide a solid foundation for long-term success. When making an investment in a dental practice in the UK, being aware of and considering these aspects will help you make an informed decision.

Staff and Equipment Requirements

When investing in a dental practice, an essential aspect to consider is the staff and equipment requirements. This involves evaluating the existing team, their skills, and ensuring their expertise aligns with the services you plan to offer. Additionally, assessing the current equipment and determining if any upgrades or replacements are necessary is crucial.

Firstly, conducting a thorough assessment of the current staff is significant. Consider their experience, qualifications, and areas of specialisation. Evaluate whether their skills complement your vision for the practice and determine if any additional training may be needed to align with your desired service offerings. Retaining experienced and knowledgeable staff members ensures a smooth transition and helps maintain the trust and loyalty of existing patients.

Next, carefully assess the equipment in the dental practice, including dental chairs, X-ray machines, sterilisation tools, and other daily-use items. Determine the condition, functionality, and adherence to standards and regulations set by the General Dental Council (GDC). Identifying any outdated or faulty equipment is crucial to ensure patient safety and the efficiency of the practice.

Based on the assessment, you may need to invest in new or upgraded equipment. This can be a significant initial expense, but it is essential for providing quality care and maintaining a competitive edge in the industry. Consider budgeting for these costs and explore funding options if necessary.

Additionally, don’t forget to account for any potential training or orientation costs for both you and the staff. If you plan to introduce new procedures or technologies, ensuring that everyone is well-trained and comfortable with these changes is critical.

By carefully assessing the staff and equipment requirements, you can plan for the initial costs of purchasing a dental practice in the UK. This analysis enables you to make informed decisions, budget appropriately, and ensure a smooth transition into your new practice. Ultimately, investing in the right people and equipment sets a solid foundation for success and allows you to provide exceptional dental care to your patients.

Click here to read our guide to building a dental team.

Importance of Conducting a Thorough Valuation

It’s crucial to thoroughly assess a dental practice before deciding to buy it. This step, often overlooked, can significantly impact the success and profit of your investment.

A comprehensive evaluation gives you a clear understanding of the practice’s financial health, market value, and potential for growth. It takes into account factors like the patient base, revenue streams, asset value, and goodwill. By carefully examining these aspects, you can make informed decisions and negotiate a reasonable purchase price.

One of the main benefits of conducting a valuation is that it identifies potential risks or hidden costs associated with the practice. This allows you to assess the practice’s existing obligations, liabilities, and operational expenses, affecting your financial projections and return on investment.

Furthermore, a valuation helps you assess the practice’s growth potential and future profitability. It considers factors such as patient demographics, local competition, and industry trends. Understanding these elements empowers you to make strategic decisions and develop a solid business plan to maximise the practice’s success.

Additionally, a thorough valuation can uncover opportunities for growth and expansion. It may reveal untapped revenue streams, underutilised equipment, or areas where operational efficiencies can be improved. Identifying these valuable opportunities enables you to create a roadmap for growth and implement strategies to enhance the practice’s profitability.

In conclusion, conducting a comprehensive valuation is a crucial step when considering the purchase of a dental practice in the UK. By gaining valuable insights into the practice’s financial health, market value, and growth potential, you can make informed decisions and negotiate a fair purchase price. Understanding the underlying costs through a thorough valuation positions you for long-term success and profit in your dental practice investment.

Determining Fair Market Value

Determining the true value of a dental practice includes evaluating various factors to arrive at a price that accurately reflects the practice’s worth. It is essential to conduct a thorough examination to ensure that you make an informed decision and avoid overpaying for the practice.

Several key elements come into play when calculating the true value. One of the primary considerations is the practice’s financial performance. This includes assessing the practice’s revenue, profitability, and cash flow. A comprehensive review of financial statements, tax records, and other relevant documents will provide valuable insights into the practice’s financial health.

Additionally, the location of the dental practice plays a significant role in determining its value. Practices situated in convenient areas with a high demand for dental services are likely to command higher prices. Factors such as population demographics, competition, and accessibility are crucial in assessing the practice’s location value.

The assets and equipment within the dental practice also contribute to its overall value. A thorough inventory of dental equipment, software systems, and furniture should be conducted to determine their condition, age, and market value. This assessment will help determine the true value of these assets and their impact on the overall cost of the practice.

Moreover, intangible factors like the practice’s reputation, patient base, and goodwill should be considered. A longstanding practice with a loyal patient following and positive reputation within the community may command a higher price due to its intangible value.

To ensure an accurate valuation, it is advisable to engage the services of a professional appraiser or dental practice broker. These experts have the necessary expertise and knowledge of the industry to conduct a comprehensive analysis of the practice. They will consider every significant component and provide a true value estimate based on their findings.

Understanding the true value is crucial when investing in a dental practice in the UK. By carefully assessing the financial performance, location, assets, and intangible factors, you can make an informed decision and negotiate a fair price. Remember, investing in smiles requires a thorough evaluation to ensure a successful and profitable venture.

Considering Future Growth Potential

When considering an investment in a dental practice, it’s crucial to think about its potential for growth in the future. While assessing the initial costs is important, evaluating the long-term prospects of the practice is equally vital.

One aspect to consider is the location of the practice. Is it situated in an area where there’s a growing demand for dental care and an increasing population? Studying the demographics and trends of the local community can provide insights into the potential patient base. Additionally, being close to residential areas, businesses, or schools can facilitate a steady flow of customers.

Furthermore, assessing the current patient base and the potential for expansion is crucial. Are there untapped opportunities to offer additional services or attract a broader range of patients? Understanding the demographics and oral health needs of existing clients can make it easier to identify growth potential and additional revenue streams.

Another element to consider is the competitive landscape. Are there other dental practices nearby? If so, what sets your practice apart, and how can you differentiate yourself to attract and retain patients? Evaluating the competition and identifying unique selling points can help position your practice for future growth.

Analysing the technology and infrastructure of the practice is also crucial. Investing in modern equipment and adopting innovative dental technologies can improve the patient experience and attract new clients. Assessing the flexibility and adaptability of the practice’s facilities can also determine its suitability for growth in the future.

Finally, staying informed about industry trends and advancements is significant for long-term success. Keeping abreast of new treatment options, regulatory changes, and patient preferences can help you adapt and stay competitive. Regularly investing in professional development and staying connected with dental associations and communities can provide valuable insights and growth opportunities.

Considering the future growth potential of a dental practice is essential when evaluating its overall value and investment potential. By thoroughly examining the local market, patient base, competition, infrastructure, and industry trends, you can make an informed decision and ensure a promising future for your dental practice investment.

Assessing Profitability and Cash Flow

Understanding the financial aspects of the practice gives you a clear picture of its potential for growth and success.

A key factor to consider is the historical financial performance of the practice. This involves examining the income and expenses over a specific period to determine its profitability. Look for consistent revenue growth, strong profit margins, and a stable cash flow. These factors indicate the practice’s ability to generate a steady income and cover its operational costs.

Additionally, it’s important to evaluate the ongoing patient base and their loyalty to the practice. Analyse patient retention rates, new patient acquisition, and referral patterns. A loyal and growing patient base contributes to the long-term profitability of the practice.

Moreover, consider the potential for growth and expansion. Examine the demographics of the area and identify any significant opportunities for increasing patient numbers or offering additional services. Assess the competition in the local market and determine if there is room for growth without compromising the profitability of the practice.

In terms of revenue, it is essential to evaluate the practice’s financial obligations, such as loan repayments or lease agreements. Determine whether the revenue generated by the practice is sufficient to cover these costs and leave room for reinvestment or future expansion.

Overall, assessing profitability and cash flow is crucial for making an informed decision when purchasing a dental practice in the UK. Thoroughly analysing the financial aspects ensures that your investment will be long-term profitable and sustainable.

Negotiating the Purchase Price and Terms

When you’re in the process of buying a dental practice in the UK, a crucial step is negotiating the purchase price and terms. This is where your business instincts come into play, and it can significantly impact the initial costs and long-term profitability of your investment.

Firstly, it’s important to conduct a thorough analysis to determine the fair value of the dental practice you’re interested in. This involves examining financial statements, assessing patient demographics, evaluating equipment and technology, and understanding the practice’s reputation in the local community. Armed with this information, you can enter negotiations confidently, knowing the value you bring as a buyer.

During negotiations, consider not only the purchase price but also the specifics of the deal. This includes payment schedules, financing options, and any potential warranties or conditions. Carefully reviewing these terms helps identify areas for negotiation and ensures that the purchase agreement aligns with your financial goals and risk tolerance.

Prepare to negotiate, as sellers often initially ask for a higher purchase price. Take into account factors like the practice’s profitability, growth potential, and any necessary investments or improvements. Emphasising these factors can help support a lower purchase price or more favourable terms.

Maintaining open lines of communication with the seller is crucial during negotiations. Clearly express your expectations, concerns, and any specific requests you may have. Remember that negotiation involves a give-and-take process, so be willing to make concessions on certain points while advocating for your own interests.

Engaging a professional, such as a dental practice broker or consultant, can be invaluable during the negotiation process. These experts can provide guidance, facilitate communication between parties, and ensure that all legal and financial aspects are properly addressed.

As you embark on your journey to own a dental practice, effective negotiation of the purchase price and terms can lead to significant cost savings and a more favourable financial outcome. Approach this step with persistence, strategy, and a clear understanding of the value you bring to the table.

Seeking Professional Assistance

When you’re thinking of investing in a dental practice in the UK, seeking professional assistance is crucial. While you may have expertise in dentistry, navigating the complexities of buying a practice requires specific knowledge and expertise in the business and finance field.

One essential professional to consider is a dental practice broker. These experts specialise in the buying and selling of dental practices, connecting buyers with sellers and guiding them through the entire process. A dental practice broker can help you identify suitable practices that align with your goals and preferences, negotiate fair terms, and ensure a smooth transition.

It’s also highly recommended to consult with an experienced dental accountant. They can help you determine a fair purchase price and analyse the practice’s financial records to provide valuable insights into the financial aspects of buying a dental practice. They can also guide you through the tax implications and financial commitments associated with the acquisition.

Working with an expert or legal advisor specialising in dental practice transitions is also essential. They can assist you with the purchase’s legal paperwork, contracts, and agreements to ensure your interests are protected and all legal requirements are met.

Lastly, a dental practice valuer can help you determine the fair market value of the practice. They will assess factors like patient lists, equipment, goodwill, and location to provide an accurate valuation. This information is crucial to making a sound investment and negotiating a fair purchase price.

While seeking professional help may involve additional costs, their expertise and guidance can save you from potential pitfalls and costly mistakes in the long run. Investing in the right team of professionals will provide you with the necessary support and knowledge to make informed decisions during the process of buying a dental practice in the UK.

Evaluating the Seller’s Motivations

When thinking about buying a dental practice in the UK, it’s crucial to understand why the current owner is selling. Knowing the seller’s motivations can provide valuable insights into potential risks and unexpected opportunities associated with the purchase.

One common reason for selling a dental practice is retirement. Many dentists reach a point in their career where they are ready to step back and enjoy their well-deserved retirement. In such cases, the seller might be more willing to negotiate and accommodate the buyer’s needs, as their primary goal is to transition their practice to capable hands smoothly.

Conversely, the seller might be selling their dental practice due to financial or personal challenges. This could indicate underlying issues within the practice, such as declining patient numbers, financial instability, or even conflicts within the team. It’s crucial to thoroughly investigate the reasons for the sale and assess whether these challenges can be overcome or if they pose a significant risk to the success of the practice under new ownership.

Understanding the seller’s long-term goals can provide valuable context. Some sellers may want to sell their practice as part of a larger business strategy, such as expanding into new markets or preparing for retirement. Evaluating how your goals align with the seller’s can help determine if the acquisition is a mutually beneficial opportunity.

It is recommended to conduct thorough due diligence when evaluating the seller’s motivations. Reviewing patient records, interviewing staff, and seeking advice from professionals like dental practice brokers or consultants are all part of this process. By fully understanding the seller’s motives, you can make a more informed decision and mitigate the risks associated with purchasing a dental practice in the UK.

Conducting a Comprehensive Financial Analysis

When considering buying a dental practice in the UK, a crucial step is to thoroughly analyse its finances. This examination allows you to have a comprehensive understanding of the initial costs involved in the investment and helps you make well-informed decisions.

To conduct a thorough financial analysis, you need to gather and examine various financial information related to the dental practice. This includes historical financial statements, tax returns, profit and loss statements, and balance sheets. By reviewing these documents, you can assess the profitability, cash flow, and overall financial health of the practice.

Additionally, it is essential to consider the practice’s existing patient base and revenue streams. Analysing patient demographics, types of treatments, and fee structures can provide insights into the practice’s true potential for growth and sustainability.

Furthermore, evaluating the practice’s assets and liabilities is crucial. This involves assessing the value of dental equipment, lease agreements, and any outstanding loans or debts. Knowing the financial obligations helps you determine how much capital is required for the practice.

In addition to current financial data, you should also consider future projections and potential opportunities. This includes analysing market trends, competition, and regulatory changes that may impact the dental industry. Anticipating potential challenges allows you to better assess the practice’s long-term financial viability.

Conducting a comprehensive financial analysis requires attention to detail and expertise in financial management. Seeking guidance from a qualified accountant or financial advisor experienced in dental practice acquisitions can provide valuable insights and ensure accuracy in your analysis.

Remember, investing in a dental practice is not just about the purchase price. It involves understanding the financial landscape, evaluating risks and opportunities, and making informed decisions based on a thorough financial analysis. By doing so, you can position yourself well and make a sound investment in the rewarding field of dentistry.

Financial Considerations Beyond the Initial Costs

When thinking about investing in a dental practice, it’s crucial to realise that the financial considerations go beyond the initial costs. While acquiring a dental practice involves expenses like acquisition costs, equipment purchases, and legal fees, it’s important to consider the ongoing financial commitments that come with owning a dental practice in the UK.

One significant ongoing expense is staff salaries. Dental hygienists, dental assistants, receptionists, and other administrative staff will all be necessary for your dental practice. The success of your practice relies on being able to offer competitive salaries to attract and retain top talent.

Another significant financial consideration is the cost of maintaining and upgrading equipment. Dental technology is constantly evolving, so investing in cutting-edge equipment is essential to providing high-quality care to your patients. However, staying up to date with the latest advancements can be costly, so it’s crucial to factor in these costs when budgeting for your dental practice.

You should also take into consideration the expenses associated with advertising and marketing your dental practice. Establishing a strong presence, creating a professional website, and investing in marketing campaigns are essential for attracting new patients and growing your practice. Allocating a portion of your budget to these activities is crucial for long-term success.

Additionally, don’t forget about ongoing professional development and training for yourself and your staff. Continuing education is essential in the dental field to stay updated on the latest techniques and advancements. Budgeting for training opportunities and conferences will ensure that you and your team can provide the best possible care to your patients.

Finally, don’t overlook the importance of maintaining adequate insurance coverage. Professional indemnity insurance, public liability insurance, and other forms of coverage are necessary to protect your practice from unforeseen circumstances and potential legal issues. Accounting for insurance premium costs is essential to safeguard your investment.

In conclusion, when investing in a dental practice, considering the financial aspects beyond the initial costs is vital. Understanding the ongoing expenses related to staff salaries, equipment maintenance and upgrades, marketing, training, and insurance will help you make informed decisions and ensure the long-term success of your dental practice.

Working Capital Requirements

When thinking about the initial costs of buying a dental practice in the UK, it’s crucial to grasp the concept of working capital. Working capital refers to the funds needed to cover the day-to-day operations of the practice until it becomes self-sufficient.

Managing cash flow is a key component of working capital. As a new practice owner, you need enough funds to handle expenses like rent, utilities, salaries, and supplies while waiting for revenue to start coming in. Understanding the current cash flow situation of the practice you’re acquiring and projecting future revenue based on historical data and growth expectations is essential.

Another aspect to consider is the potential need for additional working capital to invest in marketing and advertising efforts to attract new patients. Building a clientele takes time, and investing in effective marketing strategies can help raise awareness and increase patient traffic to your practice.

Additionally, it’s crucial to assess any outstanding liabilities or obligations associated with the practice you’re purchasing. This includes accounts payable, outstanding loans, and any other pending financial commitments. Understanding and factoring in these liabilities in your working capital requirements is vital to ensure a smooth transition and avoid any unexpected financial pressures.

Moreover, having a cushion of working capital is advisable to handle unforeseen circumstances or emergencies that may arise during the initial stages of practice ownership. This can provide inner peace of mind and allow you to focus on delivering quality dental care without worrying about financial constraints.

In conclusion, understanding the working capital requirements of buying a dental practice in the UK is essential for a successful transition into practice ownership. By accurately assessing cash flow, allocating funds for marketing efforts, addressing outstanding liabilities, and having a buffer of working capital, you can navigate the initial costs and establish a solid foundation for long-term success.

Click here to read A Guide to Working Capital Finance.

Marketing and Branding Expenses

When you’re thinking about the upfront costs of buying a dental practice in the UK, it’s crucial not to overlook the importance of marketing and branding expenses. Investing in building and expanding your brand presence is essential for attracting new patients and creating a loyal client base.

Creating a professional and visually appealing logo and brand identity should be one of your top priorities. This investment may require an upfront cost, such as hiring a graphic designer or a branding agency, but it pays off in the long run by establishing a recognizable and trustworthy image for your practice.

In addition to your logo and brand identity, having a user-friendly and mobile-responsive website is crucial. Your website serves as a virtual front door for your practice, and it’s often the first interaction potential patients have with your brand. Allocate a budget for web design and development, ensuring that it’s visually appealing, easy to navigate, and informative.

Once your branding and website are in place, it’s time to develop a comprehensive marketing strategy. This may involve various channels such as online advertising, social media marketing, search engine optimization (SEO), and traditional advertising methods like print ads or local sponsorships.

Online marketing holds particular importance in today’s digital age. Allocate resources for targeted online marketing campaigns on platforms like Google Ads or social media, which can help you reach your target audience effectively. Additionally, investing in SEO can boost organic traffic to your website by enhancing its visibility in search engine results.

Don’t underestimate the power of social media. Establishing a presence on platforms like Facebook, Instagram, or LinkedIn can provide you with a direct line of communication with your current and potential patients. Consider allocating a portion of your marketing budget to creating engaging content, running social media ads, and interacting with your audience through regular posts and updates.

Remember, marketing and branding costs should be viewed as an investment in the growth and success of your dental practice. By allocating a reasonable budget and implementing effective strategies, you can increase brand awareness, attract new patients, and ultimately generate a positive return on your investment.

Click here to access our articles and webinars on dental practice marketing.

Continuing Education and Professional Development

Ongoing learning and improving professional skills are crucial aspects of buying and managing a successful dental practice in the UK. As a dental professional, staying updated with the latest advancements, techniques, and best practices in the field is essential. This ensures that you provide the best possible care to your patients and keeps your practice competitive in the ever-evolving dental industry.

Investing in continuing education may involve a financial commitment, but the long-term benefits far outweigh the initial costs. Attending courses, workshops, and conferences provides an opportunity to learn from industry experts, gain new insights, and expand your skill set. These educational experiences can increase your practice’s revenue potential by equipping you with the knowledge and expertise needed to offer a broader range of services to your patients.

Moreover, continuing education isn’t limited to clinical skills alone. It also encompasses areas such as practice management, communication skills, and patient care. By investing in these aspects, you can enhance the overall patient experience, build stronger relationships with your client base, and foster a positive reputation within your community.

Furthermore, ongoing professional development allows you to stay up-to-date with any changes in regulations, compliance standards, or technological advancements that may impact the dental industry. By staying informed, you can ensure that your practice remains compliant, efficient, and at the forefront of dental innovation.

While continuing education and professional development may require an initial financial investment, viewing it as a long-term strategy for the growth and advancement of your dental practice is essential. By consistently improving your skills, knowledge, and practice management abilities, you position yourself for continued success in the dynamic and competitive dental field. Embrace the excellent opportunity to invest in your professional growth, as it will ultimately contribute to the overall success and profitability of your dental practice.

Risks and Challenges Associated with Buying a Dental Practice

It’s crucial to understand the potential risks and challenges that might arise. While the opportunity may seem exciting, it’s important to approach it with caution and be mindful of potential obstacles.

One significant risk in acquiring a dental practice revolves around the financial aspect. Purchasing a practice requires a substantial investment, covering upfront expenses like the purchase price, legal fees, and possible costs for renovations or equipment upgrades. Conducting a thorough financial analysis is vital to ensure you have sufficient funds to cover these expenses.

Another potential challenge involves unexpected complications during the transition process. This includes issues related to staff retention, patient retention, and seamlessly integrating the new practice with existing systems and processes. Having a solid plan in place to address these challenges is crucial for ensuring a smooth transition for both staff and patients.

Compliance and regulatory risks are also considerations when buying a dental practice. This involves adhering to various legal requirements, licensing regulations, and ensuring compliance with guidelines from the General Dental Council (GDC). Seeking advice from legal and professional advisors specialising in dental practice acquisitions is essential to navigate these complexities effectively.

Market competition can pose challenges, particularly if the acquired practice is located in an area with a high saturation of dental services. Understanding the dynamics of the local market, patient demographics, and competition landscape is essential for success. Conducting a thorough market analysis and developing a strategic marketing plan can help mitigate these risks.

Ultimately, the overall success of the acquired dental practice depends on your ability to effectively manage and grow the business. This includes efficient practice management, adapting to changing market trends, and meeting evolving patient demands. Having a clear vision and strategic plan for the future of the practice is crucial to ensure its long-term sustainability.

In summary, while purchasing a dental practice in the UK can be a rewarding investment, it’s essential to be aware of the potential risks and challenges associated with it. Thorough due diligence, seeking guidance from experts, and developing a comprehensive strategy can help reduce these risks and increase the likelihood of a successful acquisition.

Buying a Dental Practice: Get Started

When buying a dental practice (especially if it’s for the first time), you need the competent hands of qualified professionals. Not only have we been helping the UK’s dentists to buy, start and sell dental practices for over 20 years, we are dental practice owners ourselves! We know what it takes to buy the right dental practice, we can help you find it, buy it and get it up and running.

Book a free, no-obligation consultation with one of our team at a time that suits you (including evenings). We’ll call you back and have a chat about how we can help buy your dream practice.

With Samera Business Advisors you can rest easy knowing that your investment is secure and your future is brighter. Contact us today so we can help plan for your tomorrow.

Learn More: Buying a Dental Practice

For more information please check out the articles and webinars in the buying a dental practice section of our Learning Centre like the Guide to Buying a Dental Practice.

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10 Essential Cyber Security Steps for Dentists

How to Protect Your Dental Practice Online

Cyber security for dentists is a crucial, but largely over-looked, aspect of running a dental practice. Your computers, devices and networks hold confidential patient data and sensitive dental records.

With the rise of cyber attacks on medical businesses, the increasing reliance on the cloud for storage & processing and the introduction of legislation like GDPR, it is essential that dentists make sure they have a strategy for cyber security and protecting their digital information.

Cyber Security Threats to Healthcare Businesses

In this webinar, Arun and George discuss several cyber security issues which pose a threat to your healthcare business online.

Please click here to find out more about cybersecurity threats.

Preventing cyber attacks

Security Products

An essential part of any prevention of cyber attacks is using some sort of Anti-Virus software. This is a major contributor to compromises. A decent Anti-Virus software will quarantine a malicious file and ensure it does not have access to a computer, potentially compromising it.

An Anti-Virus works by scanning files or code that being passed through your network. Depending on the company. They build an extensive database of already known viruses and malware and matches the files to these in their database and decides whether to quarantine the file or not.

Hardware

Users can install a Firewall which is essentially a virtual wall that chooses to allow or decline traffic through your network.

Much like antivirus software’s, Firewalls scan packets for malicious code or attack vectors that have already been identified as established threats. Should a data packet be flagged and determined to be a security risk, the firewall prevents it from entering the network or reaching your computer.

Training

The number one way to prevent cyber attacks is training. It has been said that your own staff are the biggest threat to any business. All it takes is one staff member to click on a link and that can be the entire network compromised. Of course the computers will have an anti-virus which should block any virus that has been allowed to access the computer. But why increase your body armour when you can take the bullets out of the gun?

Phishing

Spotting a Phishing Email

There are 3 main traits to look out for with Phishing Emails.

  1. Urgency – Using tight deadlines to create a sense of urgency that distracts you from the rest of the message and pressures you into acting quickly.
  2. Authority – Using the authority of the sender, such as by pretending to be a senior executive, trusted colleague, or reliable company, to convince you that the message comes from a trustworthy source.
  3. Imitation – Exploiting ‘normal’ business communications, processes, and daily habits to trick you into reacting to a message. Check who the email is addressed to, if it’s ‘friend’ or ‘valued customer’, then this might be because the sender doesn’t know you.

Passwords

An obvious one; but having a secure password can be the difference between access and no access.

Nowadays websites ask for a secure password, this includes at least; one capital letter, 6 lowercase letters, and one number. Usually, people like to be able to remember their password so they will use personal names and dates.

A great method for a secure password is using the ‘Three Random Word’ method, this entails of using three completely random words, followed by ideally a random number, but any number would do, even a significant date. Using three different words will greatly increase the prevention for brute force attacks.

Example:

Joe Bloggs has a child names Sarah who was born 14/05/07.

Most commonly the password Joe will use is Sarah140507, this way Joe has ticked all the boxes for the website, and its easy to remember. But this password is not very secure.

As of Sept 2021, 78% of the UK population are regular social media users.

Joe Bloggs posted a picture of a birthday dinner for his daughter Sarah on Facebook on 14/05/18 saying, “Happy Birthday Sarah, 11 today!!”. See the issue? Joe told a wannabe hacker exactly the date of his daughters’ birthday. Using a brute force attack, the hacker can now try to force his way into Joe’s account(s) using the information he has gathered.

Read more about cyber threats here.

Allocate responsibilities in your dental practice

When it comes to computer security in a dental practice, it’s crucial to identify what must be done and allocate exactly which team members are responsible for those tasks.

Overall responsibility should rest with a senior manager who has a broad view of all the risks and how to tackle them.

Other individuals can handle particular aspects. For instance, installing security software.

Management should identify which information and technology is really vital to the business, this is where the big risks lie.

For example, damage to your dental practice’s financial or clinical system, or the loss of your dental patient list, could lead to the complete failure of the business.

Other information may be less important. Equally, some computers are probably more critical, or more vulnerable, than others.

Identifying the risks, then establishing what security measures already exist and whether they work, and what extra ones are required, will help you to target your security efforts where they are most needed in your dental practice.

Action: Make a list of all the cyber security steps that need to be taken and make a spreadsheet allocating these tasks to specific members of staff.

Protect your computers and networks in your dental practice

Malicious activity could come from outside or inside your dental practice. Attacks from outside, for example by troublemaking hackers or e even competitors, can be protected against simply by installing a firewall.

This is software or hardware which examines all the computer communications flowing in and out of the business, and decides whether it’s safe to let them through. It can also be used to manage your staff’s internet activity. For instance, by blocking access to chat sites where employees might encounter security risks.

You can configure (set-up) the firewall to allow or prevent certain kinds of activity. There are several different kinds of firewall. The router supplied by your Internet service provider (ISP) may already have one built-in, or you can buy a software firewall solution.

Protecting against illicit activity from inside the dental practice requires other precautions we’ll look at elsewhere in this supplement. All of these also provide extra protection against attacks from outside.

Action: Install a firewall to protect your networks and possibly restrict staff and patient usage of the internet in the dental practice.

Keep your dental practice’s computers and devices up-to-date

Suppliers of PCs, software, and operating systems, such as Windows, frequently issue software updates (patches) to fix minor problems (bugs) or improve security. It’s essential to keep all of the computers in your dental practice (and other devices) up-to-date with the latest patches and software updates.

Normally, they can be downloaded and installed automatically. Remember that just one vulnerable computer puts all the others at risk. It’s important to ensure that all available patches are applied to all of them.

Action: Check for software updates on all the devices in your dental practice and upgrade hardware that is outdated.

Control employee access to computers and dental records

Although your computers should be guarded by a firewall, you should still protect user accounts (each person’s ‘identity’ with which they log on to a computer) and sensitive documents with passwords.

Because each individual should have a unique user name and a password, access to different parts of your IT system can be limited to certain people. It is important to remember that some individuals may have more than one user name and password, perhaps if they have multiple roles.

This not only protects against accidental or intentional damage by staff to systems and information, it also provides further security against outside intrusions. To achieve this, you can use security options built in to operating systems such as Windows, or you can buy specialised software online.

Because you identified your biggest security risks and most vital information in Step 1, you can decide whether password control for a given item should be basic (for instance, one password authorising access to an entire computer) or stronger (each document or application requiring a separate password).

Some individuals designated as computer administrators (admins) may be given access to nearly everything, in order to perform technical work. You should keep the number of admins to a minimum.

Security software will usually generate records showing which employees have used particular computers or documents at different times. This can be useful for pinpointing problems, but access to these records should, of course, be tightly limited – otherwise, people misusing the system could alter them to cover their tracks.

You can find out more about patient data and record keeping on the BDA website here.

Action: Set up your employee profiles on your CRM, website administration and any other online data storage in your dental practice. Make sure you assign the appropriate roles to each team member.

Protect against computer viruses in your dental practice

Malicious software or ‘malware’ (a category including viruses, Trojans and spyware) may not always be as devastating as the headlines suggest, but can still slow down your systems dramatically, and passing them on to customers will win you no friends.

Fortunately, there is plenty of protection available. Your computers may have been sold with anti-virus software (the generic term, although most products also protect against other kinds of malware). If not, you can easily buy it.

This software regularly scans a computer in search of malware, deleting any that is found. Regular updates to head off new threats are key to anti-virus software. So this is one area where it does pay to stick to the big brand names and to ensure that the software is set to receive updates as regularly as possible (ideally daily).

Action: Install and run anti-virus software on all your devices regularly to check for any issues or threats.

Extend security beyond the office or dental practice

Today’s employees sometimes work from home or on the road between dental practice sites using their own laptops, phones and tablets. It is difficult to extend the same level of security you can apply to office computers to these devices.

But, you can reduce risk by requiring any personal equipment used for work is approved first by management or IT. It should have the minimum of anti-virus software, password protection and (where applicable) a firewall.

To protect against unauthorised access to information when a device is mislaid or stolen, it should be possible to delete all the information (“wipe” it), even when you don’t have the device.

This capability is built into newer models; software can also be bought to perform remote wiping, but this must be installed before the device is lost. Ensuring the sensitive data is kept in an encrypted area (see section 7) of the computer or device will stop most attempts to access data.

This is easy to set up using off-the-shelf software. Beware of the dangers when connecting to unencrypted public WIFI, as hackers can intercept data. Check the hotspot is genuine and make sure file sharing is off and the firewall is on.

Action: Conduct a review of all the devices your employees use to access or store patient data or dental records. Make sure they all have the proper anti-virus, firewall and data protection features.

Remember the disks and drives you need to protect in your dental practice

Removable disks and drives, such as DVDs and USB sticks, pose security risks in two ways. They can introduce malware into your computers, and they can be mislaid when containing sensitive information.

Ensure that as far as possible, only disks and drives owned by your dental practice are used with your computers. Discourage employees from using them in third parties’ computers (in Internet cafes for example), and set up anti-malware software to scan them whenever they are used in the office.

Action: Establish a plan to track who has possession of each disk or drive at any given time, what information is contained on them and check that all documents are erased from them after use.

Plan for the worst

Following the measures in this guide will help you protect against a major security breach. But no system is 100% secure, so it’s worth planning what you’d do if things went badly wrong. First, define what is ‘major’ for you. Something that puts a non-critical department of the business offline for a couple of hours probably isn’t. But something that prevents you serving customers, or performing vital functions such as payroll, will be.

Establish how you will know that there’s a problem. You shouldn’t have to wait for computers to go down; your firewall or anti-virus software, for example, may provide advance warning that something unusual is going on. Plan your next steps.

What help (perhaps a specialist computer company) should you call in? Do you need to contact key dental patients or suppliers to explain that there is a problem? Can some functions be continued using other computers, or pen and paper, while your systems are repaired?

Finally, ensure that it’s clear who is responsible for doing what in an emergency. Your plan can be laid out in a document, and delivered in training sessions. It may incorporate elements of your plans for other disasters, such as a fire on your premises, and cut-down versions can be applied to less damaging computer incidents.

Action: Create a strategy for how your dental practice will handle a major breach of patient data or dental records. Identify your biggest risks and create an emergency contingency plan.

Educate your dental team about cyber security for dentists

Tell everyone in the business why security matters, and how they can help, using training sessions and written policy documents. This will encourage them to follow practices such as regular password changes. Most will not have to actively work at security. They’ll simply need to be aware of risks. For example, knowing that they should never click on a web link or attachment in an email from an unfamiliar source.

There are non-technical risks, too. One is social engineering, where hackers try to trick employees into revealing technical details that make your computers vulnerable. For example, a hacker might pretend to work for your computer supplier and claim they need passwords to perform maintenance. The casual atmosphere of social media such as Facebook could be conducive to such deceptions, so employees should be especially wary of discussing your systems and practices on social media.

Action: Create a training session to educate your team on their responsibilities and duties regarding dental records and patient data. Deliver this programme regularly.

Keep records and test your dental practice’s cyber security regularly

Security is an ongoing process, not a one-off fix. So it’s important to keep clear records. For example, the decision-making in Step 1 of this guide could help you produce a list of all your hardware and software, along with an indication of how secure each item needs to be.

Similarly, records of software patches and lists of authorised personal devices will help build up a picture of your business’s security status, spot potential weak points, and figure out how any problems arose. Good record keeping will also help you regularly test all your security measures, and ensure that you have functioning, up-to-date software. Any business is only as secure as its weakest link, and testing will make sure that no weaknesses are overlooked.

Action: Create a cyber security strategy for your dental practice by following the steps listed here, creating a plan for each task and regularly testing your systems and strategies.

you can find out more articles on Samera learning centre.

Our Expert Opinion

“Cyber security is hugely important for every business. It’s doubly important for healthcare businesses because they handle patient data as well as their own financial data. If I were to ask you what your cyber security protocol is and you can’t answer off the top of your head – your business is in danger. You can’t rely on a simple anti virus programme. You can’t rely on a simple back-up. You honestly really need to take cyber security seriously.

If the NHS can get hacked then a small dental practice certainly can! It’s not just about hackers either. We at Samera suffered data issues when a fire broke out at one of the servers we were using for back-ups in France. Since then we’ve used a triple back-up system to make sure it never happens again. Don’t take any risks with yours or your patient’s data. Sort your cyber security out as soon as possible – your business could very well depend on it!”

Chris O’Shea
Head of Digital Marketing

Get Started: Cyber Security for Healthcare

Cyber security is an essential part of keeping your patients, data and business protected online.

With Samera Cyber Security, you get the tools you need, the know-how to use them and digital copies of all your data. This three-pronged approach means you can keep your business safe and your data safe.

Contact us today to find out more about how our cyber security training, digital protection products and back-up contingencies can help you.

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