How to Finance a Dental Practice

As you buy or start your dental practice and as a dental practice grows, there is likely to come a time when significant additional funding is required in order to scale further. This funding may be needed to purchase new equipment, to extend a current practice, or to buy more dental practices and build a group.

While routine services like cleanings and fillings are always in demand, cosmetic dentistry is also widely getting more popular. As demand grows, so does the annual salary for a dentist. Although dentistry in the UK took a hit in 2020-21 (due to the lockdowns), the industry is expected to bounce back strongly.

Now is the time to build a dental business.

Buying or starting a dental practice is one of the biggest decisions that a dentist is likely to make and can be a stressful time for all parties involved. The various aspects involved, from creating a great business plan to determining the prime location, as well as many other legal and personal factors, must be carefully taken into consideration before taking the plunge. 

There are several rewards and stresses that are associated with building a dental practice, depending on whether you want to go down the private route, the NHS route or a mixture of both. This is why we are here to lessen any burdens on you when it comes to financing a dental practice. 

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

One of the most important skills in your personal and business life is learning how to manage your finances. If you can manage this skill well, you will then be on the path to obtaining the finance and business loans you need to build a dental business.

When you are seeking a loan to buy, start or grow a dental practice, banks and lenders will look at your personal finance history to help them ascertain whether you will be a secure and reliable client that can repay the loan.

If you do not currently own a dental practice, your personal circumstances are one of the information sources that lenders will have to assess your ability to manage a dental practice when you acquire one. They will also look at your CV and whether you have undertaken any roles in your current dental practice to gain skills such as management of staff, accounting or involvement with premises issues and the CQC.

Up to this point in your life, managing finances has been just for you and your family, with little scrutiny from others.

To get the finance and business loans required to buy, start or grow a dental practice will require some effort to convince a lender you are worthy of the finance.

Action Plan

  • Evaluate the need for additional funding to scale your dental practice, considering new equipment purchases, extensions, or acquiring more practices.
  • Recognize the increasing demand for cosmetic dentistry and its impact on the dental industry’s growth potential.
  • Approach the decision to buy or start a dental practice with thorough planning, considering business plans, location, legal factors, and personal readiness.
  • Understand the various challenges and rewards associated with different dental practice models, such as private, NHS, or mixed.
  • Develop strong financial management skills as a foundational element for securing loans and financing for your dental practice.
  • Prepare to present a comprehensive profile to lenders, including personal financial history, professional experience, and potential for practice management, to secure the necessary funding for growth or establishment.

Watch this webinar on how to raise finance for your dental practice.

Click here to read our 11 top financial tips for associate dentists.

Contact us to find out more

How Do You Get a Business Loan For a Dental Practice?

There are a number of banks and lenders out there looking to help you buy, start or grow your dental practice. They all have their own policies and limitations as to whom and how much they will lend.

Most lend on an unsecured basis up to a certain level and, therefore, will want to be sure that you have the skills and the financial ability to repay them when you take out a loan for your business.

When you approach lenders for finance they will want to see a breakdown of your current personal assets and liabilities and how you currently spend your income.

They will review how much you have been able to save, and if you have not saved, they will ask where the money has gone. They will also be looking to see if you have invested in property or other assets.

This is a detailed examination of your income and expenditure and will need to be supported by the provision of bank statements verifying what you have put down as your income and expenditure.

Your bank statements also show how you have conducted your bank account. Many lenders ask for six month’s bank statements to see your income as a Dental Associate.

They also look at how you control your funds, and whether you overdraw your account on a regular basis. In addition, they will also want to see three years of associate accounts again to verify your historical income.

Most of the lending for the first purchase of a practice is unsecured, so understandably lenders want to be sure you have a sound financial background and can control your own finances. They want to see a good degree of financial sense and control which will be needed to manage your own dental practice.

If you have a good credit score, experience in dentistry and a well-prepared application, you should have little trouble obtaining a business loan for your dental practice.

Click here to find out more about making sure your loan application is successful.

Applying for Finance for a Dental Practice

Remember that if you’re buying a practice, it’s not necessary to have a particular practice in mind when applying for funding. As long as there is a plan in place.

You can read more about creating a business plan for a dental practice here.

Every dental professional has a different story when it comes to setting up a dental surgery. Take a look at our unconventional story, for instance. Whatever the story is, it’s important to go about securing finance in the right manner.

Options for funding a dental practice

From experience, there are three main options when it comes to acquiring funds to buy a dental surgery; one of which is the most common.

  • Loans from banks and other financial institutions. This is the most common option.
  • Bank of mum and dad. In certain families this may be an option, and repayment arrangements are likely to be more flexible.
  • Self-funding. Some dental professionals have the resources to do this. However, it’s not always a good idea to invest the majority of savings as any business comes with some inherent risk attached. Having substantial personal financing in place helps with maintaining a comfortable lifestyle during any lean periods for the practice.

From working with clients over the years, we realise that most often a lending institution will need to be approached. If this is the case, there are certain factors to consider when deciding on the best time to apply for a loan.

Action Point

  • Research various banks and lenders to understand their specific lending policies and the amounts they are willing to lend to dental practices.
  • Prepare to demonstrate your financial capability and professional skills to assure lenders of your ability to repay the business loan.
  • Compile a detailed breakdown of your personal assets, liabilities, and income expenditure for lender review, supported by bank statements and other financial documents.
  • Maintain a good financial record, including savings, investments, and prudent management of your bank account, to present yourself as a reliable borrower.
  • Consider the three common funding options for acquiring a dental practice: bank loans, family support, or self-funding, each with its own set of implications and requirements.
  • Evaluate the optimal timing for loan application, ensuring you have a solid plan in place, regardless of whether you have a specific practice in mind for purchase.

Contact us to find out more

When to apply for a business loan for a dental practice.

Competition for lending is high, so it’s important to have the best opportunity of being in the successful percentile. With this in mind, here is what we would advise.

  • Prepare for lending more than 12 months in advance as banks will scrutinise documentation for the previous 6-12 months, and take note of any issues.
  • Make sure that everything is in order and that good financial acumen is apparent.
  • Have a history of making payments on time and a strong credit score.
  • Know what the business aspirations are and whether practice purchase or start-up is the aim.
  • Have a team of professionals in place. At the very least, this should include a dental accountant, dental solicitor, and a financial planner for life insurance and disability insurance.
  • Hire a commercial finance broker, such as Samera Finance that can help you secure funding on the best terms available.
  • Understand the difference between lending. Some banks will offer a conventional loan while others will offer a loan which is specifically aimed at start-ups and small businesses

Make sure that all of this is in place before applying for funding from a lender.

Click here to learn more about applying for loans after COVID-19.

Approaching a lender for the first time

Remember that although lenders are there for the same overall purpose, they all have slightly different policies and processes in place. Some have a specialist team in place to deal with business loan applications, others do not.

It helps to do research when raising finance for a dental practice, and find out as much about the lender as possible. That’s where a commercial finance broker who knows dentistry is worth their weight in gold, as they know which lenders are most suitable for which clients.

Whichever lender is chosen, they will want to know that they are providing finance to a reputable borrower and that they can rely on the money being repaid as agreed. With this in mind, any professional who is looking to invest in a dental surgery should be prepared to prove their financial reliability when they visit a lender. This is likely to include:

  • Proving comprehensive bank statements for at least six months (professional and personal).
  • Providing associate accounts for at least three years, to verify income.
  • Providing evidence of regular saving.
  • If there is no regular saving pattern, there should be proof of what earnings were spent on. This could include professional expenses, or home improvements. It’s important to be able to show wise spending choices.

It makes sense that banks, and other lenders, want to verify that borrowers are a good risk. These loans are usually unsecured; so they want to be as sure as they can that they will get the money back.

When speaking to clients about their lending situation, we always stress how important it is to be able to show that they are proficient at managing money, and ideally have significant savings or investments.

Please click here to learn more about why your loan application might have been denied.

Do you need to provide security for a business loan for a dental practice?

What will financial lenders assess?

Getting qualified for a loan can be a daunting experience. The process itself is non-binding because the information you provide has not been verified. 

Any dental professional who is looking to finance the purchase of a dental practice usually needs to have a deposit of at least 10%. When approaching a lender for the rest of the money, there are certain factors they will consider when making their decision.

  • The history of any earnings as an associate dentist.
  • Management of personal finances.
  • Living situation of the applicant. Is the accommodation rented or owned?
  • Career in dentistry and level of management experience.
  • Ability to repay any loan that is provided.
  • Any personal savings that are in place. Showing a propensity to save rather than make rash purchases is an indication of being low risk for lending.
  • Evidence that tax payments are up to date.
  • The personality and character of the applicant.

Contact us to find out more

Lenders look for a few key aspects of your application in order to confirm whether you are a worthy lender. These aspects include: 

Credit

Credit history and activity have a major impact on loan approvals and will heavily influence whether you get approved or not. It is also important to know that the lowest rates available are usually only obtainable by borrowers with high credit scores.

Lenders use your credit scores to assess the reliability of you as a borrower. It will help them assess the risk being taken when providing you with financing. 

In addition to looking at your credit score as an indicator, they often review your payment history which they consider to be a strong indicator of the likelihood that you will make timely repayments in the future.

Debt 

Lenders often use a debt-to-income ratio that compares the amount you earn to the amount to owe. This is to ensure that you will not be over extended with your new loan repayment. Debt-to-loan limits vary depending on what type of financing you need and the type of lender you go to. 

Click here to read more about dealing with debt as a dentist.

Income

In order to apply for a loan your lender will need to review your income, the same can also be said for your employment history for most types of financing that you will apply for. Not having steady work or a steady source of income for the last two years could impact your eligibility for getting approved for financing for your dental practice. 

Lenders will often call your current employers and verify your salary. If you are self-employed, lenders will look at the adjusted gross income on your tax return to assess if your business is making any profit. 

Assets

Depending on what type of financing you need for your dental practice, you may need to secure your loan with assets to put up as collateral in case you default on any repayment on your loan. 

Do banks lend only on projections?

Contact us to find out more

What banks are looking for in a dentist

Unless you are being represented by a business advisor, or a professional who is qualified in dental practice transactions, you will be expected to provide the following:

  • Details about your assets liabilities, personal Income and expenditures over the last three years or SA302s – and the appropriate documentation
  • They might also ask for details of hours you’ve worked, list of services provided, or even your earning history as an Associate Dentist
  • Your personal financial track record will also come into play: how you’ve managed your finances, high credit card bills, low credit score, etc)
  • Your current living situation i.e. do you own your own house or rent

Preparing to apply for a business loan

It stands to reason that any bank, or other financial institution, wants to reduce the risk of non-payment. For this reason, they look to lend to businesses that can prove they have reliable revenue and are in a position to make repayments on time.

It’s worth bearing this in mind when making decisions to grow a dental practice. Planning ahead is essential. Ideally, plan 10-12 months ahead of time, and make sure that revenue is optimised and accounts are up to date and accurate, before applying for funding. When funding is applied for, be prepared to provide a significant amount of documentation including:

  • An up-to-date business plan.
  • Up-to-date and accurate accounts (personal and business).
  • Up-to-date tax records.
  • Details of expenditure.
  • Detailed analysis of proposed finance spending and growth of the practice.

Having everything in one place before applying for growth or acquisition funding makes a successful outcome more likely. 

Show a good sense of financial control

Banks and lenders will want to see that you have demonstrated a good sense of financial control before they offer you a loan. Having some savings for a deposit, or an investment property and investment in your professional skills provides a level of comfort to banks.

This along with a well-run and controlled bank account all start to build a picture for lenders to enable them to consider your request for a loan and leads to a good credit score.

Don’t buy a new Jaguar annually!

So, buying a new Jaguar every year, running up large credit card debts and showing a large surplus of income over expenditure with no visible savings is not the way to go. If you constantly overdraw your account with no overdraft limit in place this indicates no control of your spending.

Having a bank overdraft limit in place is not a bad thing, it demonstrates the ability to plan and foresee pinch points in your finances and the financial skill to deal with this in advance.

This is not to say you cannot buy a nice car and have good holidays and send your children to private school. It just all must be managed in the correct way.

Avoid Credit Card Funding

Professional courses and school fees should not be funded on a credit card, banks like to see that you have used appropriate loan facilities to fund such activity indicating to them your financial acumen.

If surplus income has been spent on something considered good such as further professional qualifications/property investment, make sure you highlight this to the lenders as this is not always clear from bank statements where it may merely show a loan payment.

Planning for Tax Liabilities

It is important you keep up to date on all your tax payments too. When applying for financing for your dental practice purchase, they will always ask for confirmation that your tax payments are up to date, or you have made sufficient provision for them.

Click here to read more about accounts and tax for dentists.

Bearing all of these points in mind, we would say that the most important thing is living within your means. This does not mean that going on great holidays, buying a luxury car and paying for private tuition for children are all no-go areas.

It means that there should be a balance between spending and saving. Banks need to see sensible financial behaviour, sensible use of credit and wise investment of money.

Always question outside reports and accounts

Sometimes, accounts can be misleading (i.e valuations, investment profits). Without the proper context, the avalanche of reports you will review while buying your dental practice will be enormous, it will be easy to lose focus. Things may be hiding in your accounts might no longer be necessary. On occasions we have even seen costs included that are relevant to another practice entirely!

It is always important to trust the reports you receive, but verify them. Although it would be lovely if we could trust every document that is handed to us, people make mistakes. It is our job to catch these slight missteps before they cause any problems.

Honesty is essential

When you own a practice, you need to be good at many things – other than dentistry. You may need to deal with complaints, sickness, CQC, Health and Safety, debtors, invoicing, marketing and all of the other trappings of owning and operating your own successful dental practice.

Ask yourself – and be honest – do you have the skills to manage these tasks? Be straightforward with yourself about your skills as well as your limitations, and you will go far as a private dental practitioner. Also, this will give you a good idea of the kind of staff requirements that you will need moving forward to fill in the gaps. These figures will also factor into your loan application.

Action Points

  • Prepare early for loan applications, ideally more than 12 months in advance, to ensure all financial documentation reflects stability and reliability.
  • Maintain good financial health by making timely payments, saving regularly, and having a strong credit score to increase loan approval chances.
  • Assemble a professional team including a dental accountant, solicitor, and financial planner to enhance your loan application’s credibility.
  • Consider hiring a commercial finance broker with dental industry expertise to navigate the loan process and secure favorable terms.
  • Understand the nuances of different lending options, from conventional bank loans to specialized start-up and small business loans, to choose the best fit for your practice’s needs.
  • Approach lenders with comprehensive financial documentation, including bank statements, associate accounts, and evidence of responsible spending, to demonstrate your financial acumen and reliability.
  • Plan for tax liabilities and ensure all tax payments are up-to-date or adequately provisioned for, as this will be a critical factor in loan evaluations.
  • Live within your means, balancing spending and saving to present yourself as a low-risk borrower with sensible financial behavior to potential lenders.

Contact us to find out more

Plan for applying for finance in 5 Steps

It may be a cliché, but it’s true that you need to live within your means. A quote from Charles Dickens – Mr Micawber

Annual income twenty pounds, annual expenditure nineteen [pounds] nineteen [shillings] and six [pence], result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

Mr Micawber

Step 1: Review your personal income and expenditure

The first step is to review your personal income and expenditure – look at it from an outside perspective, and consider what would others think when looking at your expenditure.

Would an outsider consider the £2000 per month you put aside for holidays excessive or just right?

The loan repayment figure you are showing at £1200 per month what does it relate to?

Make sure that you have a breakdown of your debt repayment schedule, showing all your payments, what they are for and who they are going to. Is it all a car loan or made up of some car loan and some professional qualification costs?

Click here to download a free debt structure template.

Step 2: Obtain your Bank statements and look at your account conduct

The second step is to obtain your bank statements and look at your bank account conduct. Do you stay in credit or within the overdraft limit? Are there any times when your finances get really stretched and if so, can you do anything about this?

Step 3: Obtain your Credit Score

Thirdly, obtain your credit score for free and make sure that it is correct. Check there is nothing on there you were not aware of, as credit scoring companies do often make mistakes. If you use multiple credit cards consider reducing the number of cards as having many credit cards can lower your credit score.

Step 4: Consider your partner’s financial background

Make sure your partner’s financial health is strong too. If borrowing in joint names you will both have an examination of your financial status.

Step 5: Use an experienced Commercial Finance Broker

Utilise the skills of an experienced commercial finance broker such as Samera to help you raise the finance. Our team are experts in helping dentists get finance and business loans for their practice acquisition.
Our specialist finance brokers will be able to guide you through the process to ensure you put in the strongest application to the banks and lenders to obtain the best available deals on the market.

Our finance brokerage team can advise you at every stage of your application to ensure you understand the process and don’t fall into the many potential pitfalls when raising finance for your dental practice purchase.

You can find out more about our commercial financial broker services here.

The Importance of a Business Plan

Opening up your own dental clinic is an exciting aspiration and starting up a successful dental practice from scratch is a very possible business endeavour. However, it requires an important set of skills that unfortunately not everyone has. We will guide you through all the stages that you need to go through to enable you to open a successful dental practice.

Click here to read our guide to starting a dental practice.

There is a substantial difference between buying an existing practice and starting your own practice from scratch. Call us for a free consultation and we will guide you through the pros and cons that come with starting or buying your own dental practice. 

Click here to read our guide to buying a dental practice.

When starting your own practice there are many different aspects that you need to consider that will substantially affect your business. These include the location of your business, the type of services you offer and how to attract patients who may already have their own local dentist, amongst a whole range of other considerations you will have to think about.

Contact us to find out more

The most crucial aspect of your entire endeavour of starting your own dental practice is the planning stage, which entails writing a thorough business plan.

Every owner envisions opening a successful dental practice, but you need an actionable plan to get you there, which often includes needing to apply for additional funding. This is where your business plan comes into play. You need to create your vision on paper by describing your business, goals and by addressing all your finances.

More often than not, once you open your practice, your payroll will most likely be your biggest expense. So it would be a good idea to not bring on too many people at the beginning. In addition, you should start with a few basic services and treatments to keep costs low until you gain a bigger customer base.

Financial planning especially for the first year is needed in your business plan to show that you can account for projections of the coming years as well as the profits and losses that may occur. 

Click here to read more about creating a business plan.

Applying for a business loan to buy a dental practice

When raising finance to buy a dental practice, you’ll be taking out an acquisition loan. The value of the dental practice you’re buying and, therefore, the price, will depend on several factors. The most notable of them is EBITDA.

It is important to understand what EBITDA is before buying a dental practice. EBITDA is a calculation that professionals use in order to get a clear picture of the “true profit” of their dental practice.

Essentially, EDITDA is: Earnings before Interest, Tax, Depreciation and Amortization. From the profit and loss account: you take the net profit figure (before tax and interest costs), and add back depreciation and any debt interest repayments.

Be very careful not to be misleading when presenting your sales figures. EBITDA has been calculated by adding on items that you will still have to pay – we often see subscriptions, travel, repairs and renewals added back on (they will still be a cost to you going forward). Doing this will inflate the EBITDA, which will jeopardize your loan.

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

Your financial standing is measured at a particular moment in time, the moment you are applying for a loan. Banks will look at your position now and scrutinise your situation over the previous 6-12 months.

You cannot change your lifestyle in a week and you cannot change what is showing on your credit history or bank statements, so you need to prepare and plan ahead.

Before you apply for the loan, it is imperative you have your house in order and show good management and financial acumen. This will improve the likelihood of you obtaining a competitive loan for your dental practice acquisition.

So, make sure you follow the steps outlined above!

Click here to read more about how much you can raise.

How much deposit will you need to buy a dental practice?

Financial lenders for dentists will usually lend Private, NHS or mixed practices 70% to 80% of the value of the “good will money”. However, it is possible to borrow up to 95% of the value.

But usually you must offer some additional collateral in order to perform the transaction, such as a buy-to-let property or your existing residential home.

However, the banks will also take into account the practice’s EBITDA to repay the loan, and cover any additional costs as well as providing the required standard of living adjustments.

3 important points when raising finance to buy a dental practice

  1. Review your finances early on, not when you want to purchase a practice. Ensure that you look at these critically and obtain an outside view, if possible, our team perform this at no charge.
  2. Make sure you are in financial control, provide explanations for existing debts and any large expenditure items. Make sure your CV is up to date and it includes all your professional skills, as this will be read by bankers, not dentists, so make sure you explain any technical phrases.
  3. Make sure all forms are completed fully as lenders check bank statements, accounts and business loans with credit reference agencies. So make sure everything is disclosed as this will ease the process and remove the need for further questions and explanations.

If you follow the points detailed above, you will find it much easier to raise finance and business loans to buy a dental practice.

Improving your new dental practice

The interior design and equipment changes to your dental practice can be done over a period of months or years. These upgrades must be accounted for in your financial analysis and taken into consideration for many of your profit goals – as this process may disturb your production if not handled correctly.

If, at the outset of your purchase, you know that important equipment must be changed – you should also factor this number into your purchase price. Most sellers are very conscious that they’re practice may need a “face-lift” after years of dedicated service. It’s expected – so don’t be afraid to use this as a point of negotiation.

Applying for a business loan to start a dental practice

Starting a dental practice from scratch means financing a whole range of things you wouldn’t necessarily need to when you purchase an existing practice. Since you’re not buying a ready-made business, you’ll need to build it yourself from scratch. This means funding:

  • Equipment
  • Consumables
  • Staff
  • Premises
  • Inventory
  • Marketing
  • IT
  • Tax

Many young dentists are hoping to start-up a squat practice. You can read our guide to starting a dental practice in 13 steps here.

You will need to prepare a business plan showing the area’s demand for the practice in covering: competition, other local services, hours of opening and provision of services, and other details.

You will also be asked to offer projections of 3 years of income and/or expenditures in a profit and loss format as well as cashflow planning.

Dentists who don’t enlist the help of a qualified business advisor may initially only work in their new practice one to three days per week with a full time receptionist or hygienist. You should factor in the work you will need to do outside of your practice in order to fill in the wage gap – and plan for it.

The price of developing building plans and renting equipment also need to be analyzed before lenders will review your application.

Our team of experienced dental practice accountants can prepare all of the necessary projections for you, and assist with your business planning.

Click here to listen to our podcast episode on how to organise your dental practice finances.

Contact us to find out more

Location

Picking the best location for you may take some time. Location is key for many businesses, but especially for dentists, you want a location that is generally quite visible for your potential patients, centrally located and in an area that your target market would be in. 

There will always be a prime location for your business that may just be out of your price range. It is okay to understand that price matters and will play a vital role in the location you choose.

In the larger sense, it is better to wait for the right location as it heavily impacts how much business your practice will get. It will be much better for you, in the long run, to wait for the best location suited to you to come around rather than to open your business sooner in a more remote location. 

Click here to find out more about raising finance for property development.

After finding a location

Here are the specific steps you need to take before physically setting up shop. 

  1. Find a location that you want to work in
  2. Find a property within said location that can be converted or one that already has Class E planning permission
  3. Ensure the lease you have is for 15 years within the Landlord and Tenant Act or if freehold, a valuation will be required in due course
  4. Draw a plan of the premises and obtain a quote for the refurbishment
  5. Prepare at least 3 years of projections. This should preferably be done by an accountant and should include cashflow and profit and loss
  6. Prepare a thorough business plan
  7. Lastly, you need to obtain the finance you need to make your business plan a reality

At what rates will banks lend for squat practices?

Lenders will look to assist with finance up to 70% of the build and equipment costs subject to a cap on the maximum loan. They will want to see only one surgery completed fully in a single-handed practice and staff costs kept to a minimum with perhaps a nurse and receptionist at first to keep costs under control.

When reviewing your projections, they will want to see these in a standardised format and they do expect to see losses in the first few months. Be realistic, as lenders will expect you to be.

How much does it cost to start a dental practice?

We can’t give you a specific quote on how much it will cost because in truth, it depends on various factors. These include:

  • The location of your site
  • The building you’re going to need to acquire for the practice
  • What type of equipment you’re going to be putting into the practice
  • How many surgeries you are going to be putting into the practice as well as waiting rooms
  • How much the building work is going to cost

So, the cost will vary and differ greatly between any two circumstances. You can easily spend anything from £100,000 to £500,000 and quite easily maybe even more in some cases.

But you need to make sure that you have a budget and a business plan that will forecast future trajectories. These forecasts will help you to make an efficient plan to repay all the money you’re going to need to start up your own dental clinic. 

The most important thing you need to do before you even start preparing for building work is planning and budgeting for how much it is going to cost. 

Click here to watch our webinar on financing your first dental practice.

Equipment selection for a start-up dental practice

There are many suppliers of dental equipment and whilst you maybe excited about your new venture it’s important you get the balance right. Purchase what you may need, and then perhaps once things are running well, you can purchase some of the extra’s you may desire!

Through the Samera Alliance, our Dental Buying Group, we can help you find excellent equipment on great terms.  So make sure when starting out, you join the Samera Alliance if you want the right advice at the right price.

How long the dental practice start-up process takes (really).

In short: establishing your new dental practice can take several months (in some cases up to 8) so it is imperative for you to remain patient.
This timeframe includes the completion of the following tasks:

  • Your due diligence period, where you will review the premises and then obtain the appropriate planning permissions – which generally takes a couple of weeks.
  • CQC approval must also be acquired in order to being operations once the transaction is completed
  • Lenders will take 2-3 days to give you an outline of what they will lend. 5-8 days after you provide them with the requested information, they will usually give you a full credit backed offer.
  • A thorough dental practice valuation.

Click here for more articles and webinars on starting a dental practice.

Applying for a finance to run or grow a dental practice

Without a doubt, the costs of running a dental practice, or any type of medical practice, has been on the rise in the last several years. Usually, with many businesses, if the cost of the product or service rises, that will then translate onto the customer to make up that extra cost.

Unfortunately this does not always apply in medical healthcare practices. Dental practices experience many extra costs that other businesses do not necessarily have to invest in, such as capital equipment that can often be very expensive. 

This may come as a surprise to some but there are many dentists that are happy to go through their entire career as an associate dentist without the aspiration to buy or start-up their own dental practice. However, with the rise of the pandemic and the consequences that many dental associates have experienced as a result, there are now many dental associates realising that there are so many benefits to opening their own private practice ,without the NHS contracts weighing them down. 

Being your own boss and working for yourself can be incredibly hard and it comes with a lot of challenges that you may have never even anticipated. After being in the game for over 20 years, Samera has got you covered. We have a few costs you need to anticipate that are often forgotten about or overlooked when people decide to start their own dental practice. 

Click here to find out more about secondary sources of finance.

Staff Costs in a Dental Practice

One of the main costs many do not consider are the staffing costs. Most dental practices will feature different types of specialist dentists, often including an orthodontist who can typically earn between £60,000 – ££80,000 per year. In order to grow clientele you may also want to employ a separate hygienist, who will also retain a high-earning salary. 

Although you may be aware of the costs of each of the dentists you may be employing, it is also very important to factor in any other staff members you will need. Each dentist will usually require at least one assistant – this will be highly dependent on how many dentists you have working in your practice. A receptionist will also be necessary and depending on the size of your practice, you may have to hire two receptionists.

Staffing costs themselves are a huge cost for any practice, however, what you need to take into account is that when your practice becomes more successful, your staffing costs will rise as a result. It is especially important that these costs are accounted for and managed properly when you are starting out.

Click here to read more about retaining a great team.

Finance costs

Finance costs need to be controlled and reviewed to ensure that you are getting the best deal on the market. Some lenders charge 3.75% above base rate, while others may charge 2.5% above base rate. It is important to shop around the market to see these differences, as the difference between these percentages over the course of even one year can be substantial.

If you have started a squat practice, costs may be even higher. However, once established, these costs can be reduced by a well thought out refinancing package. 

Click here to find out more about refinancing your loans.

Managing cash flow 

Buying equipment is a huge strain on many dental practices and sometimes buying the necessary equipment out of cash flow (or working capital) may seem to be saving on any long-term loans or interest. However, buying these things straight from your cash flow can create a big strain on the cash available to the business. 

Should anything unfortunate happen (e.g. Covid-19) you need to ensure that your business has the necessary reserves to save itself. Always consider whether to buy with cash or finance over the longer term. There are many financing options available to you should you need any information of what type of finance would be best for your situation. 

Click here to find out more about managing cash flow.

Rent and business rates

If you are paying rent for your dental practice that can often be a big cost for you. In some areas of the country it would be cheaper to buy the freehold if possible, so it is always worth asking. It is also important to note that lease payments rise on a very regular basis, thereby increasing your costs further. 

Equipment 

This one is a fairly obvious cost, but it can take its toll on your dental practice. You will need necessary office equipment such as a computer, desk and chairs for your reception area. You may even want to furnish your waiting room, which can be an expense you need to factor in.

However, your largest expense will come from purchasing the necessary dental equipment for your surgeries. A dental chair, lighting, dental tools, X-ray equipment, anaesthetics, sterilising equipment and even consumables such as mouthwash and toothpaste are all part of equipment costs that you need to consider. 

Contact us to find out more

These do not all have to be bought outright all at once. There are many financing options that are lenient and can help your dental practice in the long run. Although you may factor in the costs of financing all the equipment you will need, you also need to factor in the costs that are included in keeping all your equipment up-to-date and maintained. You will also need to factor in the costs of lighting, heating and cleaning services of your dental practice.

Click here to find out more about asset finance for dentists

Although these costs will be a considerable amount, they are essential when it comes to setting up and running a functional and successful dental practice. 

Overall, the costs of running a dental practice are high, like many other medical healthcare practices. Often with dental businesses it can take some time and hard work before you start to see increasing profits. However, these profits are more than worth the costs of running your own dental practice and being in charge of your own business. 

Dental practice financing in the UK 

Buying, starting or growing your own dental practice is not a cheap process. Whether it is for property, assets or acquisition, the chances are that you will need to raise finance to build your dream practice. 

You will be able to get funding from many different mainstream lenders to finance a dental surgery, but it is imperative that you show good management of income, evidence of savings and prove your credibility with those lenders.

Acquiring a dental practice involves a large financial investment, so a comprehensive due diligence process is absolutely essential. It is also important to work with specialists along the way such as a dental solicitor, a commercial financial broker, and professional dental accountants, in order to minimise any risks. 

Click here to listen to our podcast episode on financing a squat practice.

Whether your dental practice is NHS or private, we can help secure the tailored finance your business needs to grow and succeed. 

Mortgages for dentists

We can help you find the right mortgage product to suit your needs. Whether you are re-mortgaging or buying a new site. 

Click here to find out more about commercial mortgages.

Acquisition finance

Acquisition financing will allow you to gain capital specifically for the purpose of buying your new dental practice. We can guide you through the best cost effective ways to do this and mentor you through how it will affect you and your business. 

Click here to find out more about acquisition finance.

Asset finance

Dental equipment is expensive, you need to think about all aspects that you will need to finance such as chairs, X-ray machines, you name it, it all comes with quite a hefty price tag. Asset finance assists you with spreading the cost of repayment of equipment over time.

This eases the financial stress and allows you to avoid the need to buy the equipment that you desperately need outright. Asset finance means that your practice can continue to deliver the highest quality of dental services without compromising on price. 

Click here to find out more about asset finance.

Business loans

There are many reasons as to why a business loan would be a great financing option for you. These types of loans are one of the best ways to secure working capital. You will need this type of capital to keep day to day operations consistent in your practice. There are two types of business loans available to you, secured and unsecured. Secured is a longer term lending based on the security of your business assets or unsecured which is a flexible, alternative finance solution, usually for smaller amounts. 

Click here to find out more about working capital.

Best banks for dental practice loans

Unfortunately, there is no easy answer to this question. It all comes down to what deals or terms work best for you and your business. This is why it is always best to use a professional who is qualified in handling the unique aspects of a dental practice sale and/or purchase.

Most of the high street banks all lend to dentists, but their offerings and terms vary greatly depending on what your requirements are.

For instance, whilst one bank may offer a lower interest rate, they may require more security than another. In addition, new challenger banks are interested in providing loans to dentists, so they are another source to consider for good terms.

To ensure you get the best deal available when you require finance, using Samera Finance to help you navigate the best loan terms available is highly recommended.

Our team of finance professionals are perfectly positioned to help you understand your financial requirements and provide a selection of finance offers for you.

Click here to read more about finance options for dentists.

Work with a commercial finance broker

In the same way as it’s important to work with expert dental accountants and dental solicitors when financing and buying an initial dental practice, it’s vital to do so when growth and further purchasing is required.

Never forget that a dental surgery owner’s talents lie with running the practice itself and not with accounting or legal implications. It’s better to work with experts to deal with these factors. We’ve worked on these aspects of scaling a dental practice with clients on many occasions and it’s made the process a lot simpler for them.

When you use a commercial finance broker like Samera, you tap into our decade’s of experience in the healthcare finance market. Remember, it’s not just about finding a deal for you, it’s about everything else the broker will do for you.

A broker can negotiate much more affectively, since we know the different structures and formats of deals and applications that lenders look for.

We are completely independent of any one lender. We will approach several lenders to find you the right finance solution for your business.

Click here to read our 5 reasons to use a commercial finance broker.

Our Expert Opinion

“There are so many options to borrow money on various terms these days which can be confusing. The cheapest rate is often not the best deal available, As loan to value, term of loan, arrangement fees, exit fees and legal fees are all things that need to be considered. That’s why now more than ever it’s essential to have a commercial finance broker assist to get the best deal, not just the best rate.”

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.

How To Market A Dental Practice

Paying attention to marketing is essential if you want to appeal to new patients, build your brand awareness and grow your dental practice. It provides you with an opportunity to attract new patients as well as to keep current patients engaged and connected.

Making use of techniques such as website optimisation, SEO, social media, PPC and email marketing helps you grow your dental practice and make sure that it continues to flourish as you want it to.

The basis of your dental practice should begin with getting the right team in place. However, growing your business and getting that attention that you need for your dental practice to succeed, is where your efforts need to be drawn to next. This is where marketing comes in.

After nearly 20 years in the business, it has been a shame to see many dental practices who have the potential to thrive, fail due to the inability to get people through the door. This is why marketing is paramount to growing your business.  Marketing a dental practice effectively can make all the difference when it comes to getting new patients in and retaining current ones.

Click here to watch our webinar on using marketing to grow a dental practice.

Action Points

  • Start by creating a user-friendly website for your dental practice, keeping it simple initially, possibly even with just a homepage that includes all essential information.
  • Ensure the website is easy to navigate without using complex jargon or categorizing treatments in a way that might confuse potential patients.
  • Incorporate multiple contact options, making phone numbers clickable for direct calling, including contact forms on every page, setting up online booking systems, and adding a chat feature or WhatsApp number for ease of communication.
  • Prioritize making your website mobile-friendly, ensuring it not only looks good on desktops but also provides an optimal experience on mobile devices, where the majority of your traffic is likely to come from.

You can read more about creating websites for dentists here.

Search Engine Optimisation

Theoretically, you can have the best dental practice in the world in terms of patient care, and it will still fail to thrive if people do not know that it exists. Gone are the days when word of mouth was the way most people found a dentist. Today, people go straight to Google and search for a dentist in their area. This is why it’s so important to use SEO for dentists, to attract patients to your practice.

SEO helps you to optimise your search engine rankings. So that your practice features at the top of the results list when people carry out a search. For this to happen, it’s important that SEO is done well. There are several things to think about to successfully grow your dental practice with SEO.

Make sure you are using the proper keywords on the relevant pages. For instance, if you’re a dentist in Baker Street, you need to make sure your dental implants page uses phrases like ‘dental implants in Baker Street’ in the body of the text and preferably in the headers.

Start a blog right now if you haven’t already – it’s the perfect excuse to create content around any keyword. Write about the top tips for getting white teeth, the 5 reasons to use Invisalign, the best ways to avoid bleeding gums and so on.

Action Points

  • Implement SEO strategies to enhance the online visibility of your dental practice, ensuring it appears at the top of search results when potential patients search for local dentists.
  • Focus on using relevant keywords throughout your website, especially on service pages, incorporating specific phrases like ‘dental implants in Baker Street’ to match local search queries.
  • Start and consistently update a blog on your dental practice’s website, using it as a platform to create keyword-rich content on various dental topics, tips, and treatments to attract and engage potential patients.

Read our article on SEO for dental websites here.

Pay-Per-Click Advertising

Pay-per-click (PPC) advertising can be one of the most effective way of getting your adverts seen by potential patients. By using platforms such as Google Ads and Facebook Ads, businesses can pay to have their adverts shown to the exact audiences they want. With PPC, you pay every time a user clicks on your advert.

Read our blog on using Google PPC to grow a practice.

Google and Facebook both allow you to use narrowly defined target audiences, meaning you are not paying for your adverts to be shown to audiences with no intention of becoming a patient. With Google and Facebook by far being the largest search engine and social media platform, the advertising potential with these two services are enormous.

Start advertising on Google right now for simple keyword searches like ‘dentist in [your area]’. Set up ads for emergency patients especially, they are a great way to grow a practice and find new patients. You can target specific audiences but you can also simply target everyone within a certain radius of your practice.

Facebook can be great for PPC when used correctly. We recommend using Facebook ads for cheap brand awareness campaigns, just to get your name out there to people within your area. You should also use Facebook (and Instagram) ads for one-off offers and discounts. Target the people who have visited your website, your followers on Facebook and Instagram and also upload your patients’ emails. This means your adverts will go to more qualified leads who you know are at least somewhat interested in your services (since they have already interacted with you in the past.)

Set up a Facebook Pixel on your website – this allows Facebook and Instagram to track their users when they use your website. This then allows you to send adverts to people who have visited specific pages on your website. For instance you could send Invisalign adverts ONLY to people who have been on your Invisalign page.

Action Points

  • Leverage Pay-Per-Click (PPC) advertising on platforms like Google Ads and Facebook Ads to target potential patients directly, paying only when your ad is clicked.
  • Utilize the targeting capabilities of these platforms to ensure your ads reach specific, relevant audiences, such as those searching for a ‘dentist in [your area]’ or requiring emergency dental services.
  • Consider using Facebook for brand awareness campaigns to familiarize your local community with your dental practice and for promoting special offers or discounts to a more engaged audience.
  • Implement a Facebook Pixel on your website to track visitor interactions, enabling more precise ad targeting, such as showing Invisalign ads to visitors who have shown interest in that specific service on your site.

Watch our webinar on using Facebook and Instagram ads for dentists.

Creating Content

Creating great content is key to digital marketing, it’s your ammunition! If you haven’t already – you need to start blogging and writing articles. These are some of the main things that search engines like Google will use to analyse and rank your website.

Write about top tips, give guides to different treatments, do top 10 lists, there are so many options to choose from and so many topics to write about! It takes time, but it will pay dividends in the long run in terms of SEO. Google notices when your website is constantly updating itself with new content and it prefers websites that do.

Read our article on content writing for dentists here.

But blogs aren’t the end of it. The most successful and engaging form of media on any website is video. It attracts customers, it engages them and it converts. Get yourself in front of the camera and talk about your services, dentistry in general, your team and your mission & values.

You can create a short video for each treatment page explaining the procedure. You could also have a video for each team member on their profile page. Video is more engaging for audiences and also performs better than simple text or images.

You can read more about video marketing for dentists here.

Social Media

There is no doubt that social media plays a larger than ever role in dental marketing. Using social media gives you the opportunity to interact with people in the local community who are patients or potential patients. You can post updates about the practice, including details of your community work and of any new treatments that are being provided.

You can also interact with your patients, by encouraging them to provide reviews of your practice, or ask questions. Do not forget that it is not sufficient to simply set up social media accounts; you need to make sure that they are managed effectively and regularly updated.

At the very least, you need to be on Facebook and Instagram. Not only can you keep in contact with your patients, keep them engaged and send them updates, offers and news. You can also advertise very effectively straight from these platforms.

Social media is essential to growing and marketing a practice. Even if you do not use Facebook or Instagram in your personal life, you need to be using it for your dental practice. Post about once a day. Post things like blogs, articles, behind the scenes videos, even content that isn’t directly related to the practice like motivational pictures!

Action Points

  • Actively use social media platforms, especially Facebook and Instagram, to engage with the local community, patients, and potential patients by sharing updates, community involvement, and new treatments.
  • Encourage patient interaction through reviews and Q&A sessions to foster a community around your practice.
  • Maintain a consistent and effective social media management strategy to ensure your accounts are regularly updated with relevant content.
  • Utilize social media for direct advertising, leveraging the platforms’ targeting capabilities to reach specific audiences with updates, offers, and news.
  • Post diverse content daily, including blogs, articles, behind-the-scenes videos, and motivational images to keep your audience engaged and informed about your dental practice.

Read our article on using social media to grow a practice here.

Reviews 

One of the best ways to grow your practice using digital marketing is to encourage current customers to review your practice. Hopefully, these reviews on online spaces such as Google Reviews or Trustpilot will be positive. However, negative reviews can still be an opportunity for you to address them in a helpful and positive manner. Look at the negatives as constructive criticism and make sure you are seen to be addressing the problem.

In this day and age, when prospective patients are looking to go to a new dental practice, the first thing they usually look at is reviews. Reviews are what will entice or repel prospective clients. When people see those reviews online, they will (hopefully) see that your dental practice is reputable and highly thought of. This makes it more likely for them to book an appointment with you and use your services. 

Your best, as well as your worst, reviews equally have a way of quickly spreading online. Encouraging customers to review your company is an easy way to expand your brand’s reach. When people have good things to say and have a positive experience at your practice, they are more likely to spread their review to more sites including external websites such as TripAdvisor, Yelp and FourSquare

Not only will good reviews impress possible patients, it also impresses Google. The better your reviews, the more reputable and trustworthy in the field of dentistry Google will consider you. 

Action Plan

  • Actively encourage your current patients to leave reviews for your practice on platforms like Google Reviews or Trustpilot.
  • View negative reviews as opportunities for improvement and address them publicly in a constructive and positive manner.
  • Recognize the importance of online reviews in attracting prospective patients, as they often check these before choosing a new dental practice.
  • Promote customer reviews to enhance your practice’s online reputation and visibility, which can lead to increased appointments and service usage.
  • Understand that positive reviews not only influence potential patients but also contribute to Google’s perception of your practice as reputable and trustworthy in dentistry.

Watch our webinar on marketing and patient care here.

Email Marketing 

Email marketing is still one of the most effective digital marketing methods, if it is utilised in the right way. You can provide a means of people giving you their email address, such as a newsletter sign-up page on your website or in person when they book an appointment. Once you have collected email addresses, you need to decide on your campaign.

Click here to read our article on Email marketing for dentists

For instance, you may want to offer discounts for treatments or an ongoing newsletter with details of latest news within your practice. Newsletters that consist of getting to know the staff segments and continuous updates of your practice, helps your clients feel closer to you as a business. Think carefully about the people you are targeting with your emails and make sure that the tone of your email content is engaging and appropriate.

Newsletters can be a great way of keeping your customers engaged, enhance your brand awareness and build a feeling of community. 

Action Points

  • Implement a strategy for collecting email addresses, such as through newsletter sign-ups on your website or during appointment bookings.
  • Plan your email marketing campaign, considering offering discounts or sending newsletters with updates and news about your practice.
  • Include personal touches in your newsletters, like staff introductions and practice updates, to foster a sense of connection with your clients.
  • Tailor the content and tone of your emails to suit your target audience, ensuring it is engaging and relevant.
  • Utilize email marketing to keep your patients engaged, increase brand awareness, and cultivate a community around your dental practice.

Watch our webinar on using marketing to increase profits here.

Offline Marketing for Dentists

Branding

Before we begin on effectively marketing a dental practice, we need to start with what you are promoting. Needless to say, it is your brand name and image that will define you and get you recognition. But you need to start somewhere else entirely, your brand should come later. The first thing and main thing you need to market is the benefits of your practice. This is what will get you the attention you need. Remember, benefits before branding.

You need to promote the specific benefits patients will get if they visit your dental practice. The fact of the matter is, the dental industry is heavily populated. You need to market what makes you different and special. That is what your audience will respond to, your unique selling points. 

It is hard to be unique as a dental practice, but there are certain aspects of your practice that can make you different, that is what you should market. 

Think about anything positive about your surgery that can be promoted. Here are a few aspects that we have come up with but remember, with the right team, you can promote just about anything. 

  • Easily available emergency appointments.
  • Easy access to appointments. 
  • Orthodontic surgery available on site. 
  • Specialist care for nervous patients.
  • Specialists available (eg, orthodontists, hygienists). 
  • Children’s dental care specialists available at the practice 
  • Cosmetic dental procedures available on site. 
  • Location!

Many dental patients tend to respond well to benefits like these before they even begin to respond to traditional commercial branding. Now you know the specific aspects of your dental practice that you need to promote, you need to remember to navigate a direct path from these benefits to the name of the dental practice. The aim is for patients to associate the benefits of the practice to the name of your practice, this will be your brand. Essentially, you will be branding your dental practice with your unique selling points. 

Action Points

  • Focus initially on promoting the unique benefits of your dental practice rather than the brand itself to capture attention and differentiate from competitors.
  • Highlight your practice’s unique selling points (USPs) such as emergency appointment availability, specialist care, or convenient location to appeal to potential patients.
  • Identify and market the aspects of your practice that set you apart, like specialized services for nervous patients, children’s dental care, or on-site cosmetic procedures.
  • Craft your marketing messages to directly link the benefits of your services to your dental practice, aiming to create a strong association in patients’ minds.
  • Use your practice’s USPs to define and build your brand, ensuring patients recognize and remember your practice for its distinctive advantages and quality of care.

Interact with the community

The patients who attend your practice are part of the local community, so it makes sense that you should ensure that your practice is known and respected locally. Community involvement can be of huge benefit to any business that is so closely involved with people in the local area.

The type of involvement that you can consider includes attending local fêtes, contributing to local charities and sponsoring junior sports teams. You may even be able to attend local schools, to talk about the importance of good dental care or about the pros and cons of a career as a dentist.

Action Points

  • Engage actively with your local community to build a positive reputation for your dental practice.
  • Participate in local events such as fêtes to increase visibility and connect with potential patients.
  • Contribute to local charities and causes to demonstrate your practice’s commitment to community well-being.
  • Sponsor local junior sports teams to support youth activities and enhance your practice’s presence in the community.
  • Offer educational visits to local schools to discuss dental care and career opportunities in dentistry, further establishing your practice as a knowledgeable and caring community member.

Postcards and Flyers 

It is important to remember that not all of your dental marketing efforts need to be based online. Your practice is physically located amongst both your current patients and prospective patients. Therefore, you are in the ideal position to make use of non-digital marketing solutions such as postcards and flyers. 

Make sure that your postcards and flyers are relevant and have something important to say about your practice. Remember that there are many businesses that post their advertising materials through the postboxes of your potential clientele. Many people still get bombarded with many flyers and postcards that are all more or less the same, which is why your content needs to stand out. 

Using customer testimonials on your flyers is always a great thing to add, but be sure not to go crazy with any designs. Sometimes it helps to include a promotion or discount on your flyers to provide more of an incentive for people to come to your practice and actually keep the flyer rather than throwing it away. 

However, with society becoming more environmentally conscious, it is important to use sustainably sourced materials and to advertise that fact. 

Action Points

  • Utilize non-digital marketing methods like postcards and flyers to reach current and prospective patients in your local area.
  • Ensure your printed materials convey relevant and compelling information about your dental practice to stand out from other advertisements.
  • Consider incorporating customer testimonials into your flyers and postcards to build trust and credibility.
  • Include special promotions or discounts in your materials to incentivize potential patients to visit your practice.
  • Opt for sustainably sourced materials for your printed marketing efforts and highlight this eco-friendly choice to align with increasing environmental awareness among consumers.

SMS reminders 

SMS marketing has made a huge comeback recently. If you’re like me and knew nothing about text marketing until recently, then you’re in for a pleasant surprise. In the last few years, there have been a lot of new and old marketing strategies that have seen a sudden boost in popularity, and SMS marketing is one of the older ones but is now more effective than ever. It has been around for a couple of decades now but only now has it really caught on, especially with the smaller to medium-sized business market.

SMS reminders are a great way to keep existing patients engaged by reminding them about scheduled appointments or prompting them to book an appointment if they haven’t been in a while. Almost everyone has a smartphone in their pocket nowadays and SMS reminders can help you reach your patients directly, cheaply and easily. 

Action Points

  • Explore the potential of SMS marketing as an effective tool for engaging with patients in today’s digital age.
  • Implement SMS reminders to keep existing patients informed about their upcoming appointments or encourage them to schedule a visit if it’s been a while.
  • Leverage the ubiquity of smartphones to ensure your messages reach your patients directly, offering a cost-effective and straightforward communication channel.

Our Expert Opinion

“Marketing, especially online marketing, is one of the most important aspects of running any business. It can make or break your business, especially if you’re a start-up practice or an existing practice that’s struggling.

My biggest recommendation would be to focus on getting the SEO right. This means you need to focus on content optimisation, user journey, user experience and the speed of your website.

There are so many tools and Google Chrome extensions you can use for free. Download Google Lighthouse and the Website SEO Checker extension on Google Chrome. Feed your website urls into these tools and they’ll tell you what you need to do to your website.

Some of it will need to be handled by your developer, and hopefully they’re already on top of it. But if I can give you one piece of advice, it’s focus on SEO and your website. Ads can work brilliantly but they cost money. SEO is free, it’s effective and it can be done fairly easily if you know what you’re doing.”

Chris O’Shea
Head of Digital Marketing

Marketing a Dental Practice: Further Information

For further information on how to effectively market a dental practice, check out our Learning Centre here, where you can find articles and webinars like our guide How to Market 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 Start a Dental Practice in 13 Steps

Setting up your own squat dental practice is a way of getting into ownership without the costs of buying an existing dental practice.

This is the story of how we started our first dental practice in 13 steps and how you can too.

Back in 2004, when many dentists were bumbling along with the old NHS contract, we decided to start up a squat dental practice. We had no experience of how to start a dental practice, we just had plain business ideas and clinical knowledge to back us up.

Most dentists we spoke to said we were mad not trying for an NHS contract, but we believed (and still do today) that being business-like in our approach to delivering dentistry would ensure our success. It did.

To date, we have done pretty well by taking the road less travelled, and with the prospect of further changes in the NHS, we only anticipate things to be even more difficult in the NHS for the UK’s dentists.

So now we want to share with you our story, how you can go it alone and how to set up your own successful private dental practice from scratch in just 13 steps.

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

Practice Startup Checklist

Download the Samera Dental Practice Startup Checklist to make sure you’re following every step on the path to becoming a dental practice owner.

Download the Starting a Dental Practice Guide

What is a Squat Dental Practice?

Usually this is a single surgery practice started from the beginning with a view of turning this into a highly profitable business. It can be more than one surgery if there are multiple dentists involved in the project.

You will need to have a vision of what you want to achieve and build your business plan around this, take into account the services you will provide and ensure you research the area you are to set up in to ensure that there is demand.

Think about your opening hours and whether these will include weekends and early starts or late finishes. Most importantly, make sure you have the right location, with new clients being able to find your premises clearly.

Create a Business Plan

Putting Our Ideas on Paper

The first stage in setting up our first dental practice was putting down onto paper what we wanted to create. We had ideas, dreams, even aspirations, just like you almost certainly do. It was imperative to start putting these ideas down on paper as the first step to making it really happen.

Using sound business techniques, we clarified our vision of what we wanted to create and then, most importantly, started putting a business plan together.

After a couple of months, we had a great looking business plan, with our goals, mission and values. However, as wonderful as these ideas looked on paper – we had no location!

Learning Point 1: Clarify your vision of what you want to create and seek assistance if necessary to put a detailed and well thought through business plan together. Make sure your business plan includes:

  • The aims and objectives
  • Services that will be available
  • Market research
  • Acquisition and operational costs
  • How you intend to run the practice
  • Financial forecasts

You need to consider what your practice will become and work out the costs and income that you will generate so that projections can be calculated to provide lenders with a well thought out viable business opportunity. You can find further information on business plans for dental practices at the link below.

Click here to read more about putting a business plan together.

Choose the Right Location

Driving Around London at Night and Finding a Site

How could we have a wonderful business plan and idea with no location? Well, our plan had identified exactly what type of customer we wanted to come to our dental practice, including their psychographic and demographic characteristics. All we needed to do was start looking for suitable premises! Premises with everything we were looking for don’t come up regularly, so we started scouring London for suitable properties.

Click here to learn more about choosing between leasehold and freehold.

This meant walking and driving around looking for suitable sites at particularly strange hours of the day. We found the site of our first dental practice in Wandsworth Town, after driving back late from dinner with friends in North London. Days later we agreed the contract with the vendor.

We followed the same approach for our subsequent sites in Canary Wharf, Esher, Surrey and Fleet Street – always checking out the competition, visibility of the premises and the amount of traffic passing by. Hours spent doing this proved to be very valuable indeed!

Learning Point 2: Finding the right location to open your dental practice is critical. Don’t settle for second best, walk around different areas at different times of the day and speak to many agents and you will eventually find a suitable location for your new dental practice.

Make sure you do the necessary market research on the demographics of your chosen location and any competition you may face from existing practices in the area. Be prepared to make some tough decisions, like having to move to an area you hadn’t originally dreamed of.

You will need to research this carefully – remember you are going to be working there for several years and it needs to be an area you would want to work in.  Look at the local competition, how much footfall is there, are there good transport links and can patients park easily.

The building will need to be adapted and will need ventilation, space for plant and equipment and enough space to develop the practice into a 2/3 surgery practice or more.

Click here to find out more about choosing a location in our webinar on starting a profitable private practice.

Contact us to find out more

Create a Flexible Business Model

Becoming pregnant was not part of our equation, we had to create a flexible business model.

A week after agreeing all the terms for the premises we found in Wandsworth Town, Principal dentist, Smita, who was supposed to be doing most of the dentistry (particularly in the early days of the practice) was in fact, pregnant. Although this threw us momentarily, we decided to take the plunge anyway.

However, we decided we had to re-design our business model, where from an early stage, the practice would not rely upon the earnings of the Principal dentist – pretty much unheard of in the setting up of a squat dental practice.

Learning Point 3: In business, you have to be flexible and be ready to change your ideas and plans quickly. Don’t be inflexible, always be ready to adapt and change as circumstances change. You will make mistakes. You will face obstacles. Things will go wrong. It is important that you are ready to adapt to these new situations. Make sure you have a plan B for every eventuality. It is also essential that you create a business crisis continuity plan for your practice in case the worst should happen.

Click here to watch our webinar on mistakes to avoid when running a dental practice.

Hire an Expert External Team

The next few months were very exciting. What we had on paper was now being transformed into reality. Our next stage involved hiring experts to help with the business, something which we firmly believe in. Cutting corners can appear to help in the short-term, but 9 times out of 10, this approach can eventually come back to haunt you.

So, we hired a design team to aid us with the branding and design of the practice. We knew we had to create something special that stood out in a crowded environment. Their expertise was essential in creating a brand that ensured we got the right customers.

Learning Point 4: Build a team of experienced professionals from day one, don’t try and do it on your own, as it will be much more difficult to reach the lofty heights of success alone. People you will need include accountant, lawyer, designer, website and digital marketing experts just to name a few! Yes, it’s possible to do all these things on your own, but it’s not a good idea. Your skill is dentistry, not accounting or marketing or brokering.

Click here to read the 10 things to look for in a dental accountant.

Raise the Finance

Raising cash and being tight with the purse strings

Naturally, we had in our hearts a picture of the dream practices we wanted to build, with the newest technology, the most futuristic decor and a dozen surgeries. However, in our heads we also had budgets, cash flows, expenses and reality!

We got to work figuring out what we knew we could afford to raise, we calculated projected profits, we found as many quotes for every purchase we could.

Click here to listen to our podcast episode on financing a squat dental practice.

With great designers supporting our start-up, we now needed associate dentists, especially since our business model was not going to have our own Principal dentist earning for a while. We knew we had to be careful in our set-up costs. So, armed with a detailed business plan and robust financial forecasts, we approached various banks to support the venture.

Our plan, which was paramount to raising the finance, was approved by one of the major banks and we got the go-ahead to move forward. That said, sticking to our budget was also essential in successfully getting the business off the ground. Not spending on superfluous dental toys was an essential aspect to doing it right too. Hard negotiation and saying NO to salespersons was an essential part of the set up process.

Read more about how lenders want you to manage a start-up dental practice.

How Much Does it Cost to Start a Dental Practice?

How much it costs to start a dental practice will vary greatly and depends on a huge range of factors, such as:

  • Where you’re opening the site
  • What type of building you’re going to be trying to acquire to put a dental practice into
  • What type of kit you’re going to be putting into the practice
  • How many surgeries you’re going to be putting into the practice
  • How much the building work is going to cost, what the design is etc. 

The ball park figure for starting a dental practice that we’re seeing today is anything between £100k and £500k. On average, probably about £200,000 to £250,000 to start up a dental practice as a squat these days.

Click here for more information on raising the finance to start a dental practice.

Contact us to find out more

What Does a Dental Practice Need to Purchase?

There can be a seemingly endless list of equipment and consumables that dental practices need to purchase. It’s great to have up-to-date technology and all the latest gear, but it’s also important to be mindful of your cash flow and working capital.

So, what exactly are you going to need to budget for?

Here is a list of just some of the equipment and consumables for which you may need to raise asset finance. Please bear in mind that this list is not exhaustive, nor will you need to purchase everything on this list.

Click here to find out more about asset finance.

Learning Point 5:

The project will consist of two main costs –

  1. The Build – this is the transformation of the property into a dental practice the cost of taking out the fabric of the premises if necessary and installing your electrical requirements / surgery rooms / decontamination room / staff room / toilets / disabled access and toilets
  2. The Equipment – the cost of buying and installing a chair / x-ray machine / autoclave/ suction / compressors etc

These costs will form the basis of your projections (required by all lenders) showing how the practice will grow and become profitable.

Put some tight financial management into play by setting a budget, negotiating hard and keeping a close eye on your costs. Don’t get too excited and spend more than you have to use, only spend money on space and equipment you 100% need.

Make sure you have all the necessary documentation like accounts and bank statements. Contact a commercial finance broker (with experience in the dental sector) to discuss the different funding options available to you. You will get a better price and a better deal by using a broker. You will need to think about finance to cover assets, property, staffing, working capital and much more. Download our free cash flow forecast template.

Click here to watch our webinar on financing your first dental practice.

Put a Great Team Together

The old cliché –TEAM

Whilst the practice was developing, in parallel, we had to hire and build a team of associates and nurses. Did we get it right first time? Of course we didn’t! Do we still make mistakes? Of course we do, but we have pretty much experienced anything and everything that can occur within a team. However, without a dedicated team, the business would not be in its strong position today.

Keep in mind the basic principles of hiring a team. You’re going to be working with these people for quite a while (if all goes the plan!). Make sure you hire people you get along with, and make sure you hire people your patients will get along with!

Learning Point 6: Yes, it’s team again. You will need to hire your practice team too, so it’s imperative to start looking early for quality people to join your team. Don’t hire them because they are cheap, hire them because they can help you build your business.

Not everyone who is great at dentistry is also great with people. Make sure your clinical team have a good bedside manner and know how to upsell. Remember that your front-of-house staff can make or break a dental practice – they are the face of your business so make sure they are friendly, well-trained and great communicators.

Click here to read more about putting a dental team in place.

Market Your New Dental Practice

Pre-opening Marketing – The First Day

With our first team in place, and around 6 months after finding the premises, we opened the doors of our first dental practice to the public by holding “The world’s first tooth-brushing class!” A bit cheesy, but it worked, plus it certainly got the local community involved. We offered discounted check-ups and various other incentives to get people through the door.

Contact us to find out more

Before we actually opened (due to our pre-opening marketing exercises) we had over 50 patients booked for appointments in the first 2 weeks. During those first few months, the business grew, then grew some more, whilst being blessed with our first child. As the business went from strength to strength financially, we felt (12 months on) that we had designed a strong enough business model that could be sustained and replicated again, perhaps on a higher risk scale.

Learning Point 7: As part of your business plan, make sure you have a detailed plan of marketing in place. Don’t just wait for patients to come in, you will need to be active before you open and even more active in your marketing once open. Make sure you have sufficient budget to do this, else you will open a practice with no patients to see! Start building a website at least 3 months before the practice opens – Google takes a while to rank new websites. Start some Google and Facebook ads to start building brand awareness online.

Click here for all our articles and webinars on marketing a dental practice.

Growing Your Dental Practice

Think BIG – Roll on practice number two!

Despite what other people said (including our bank at the time) we decided to take a MASSIVE step for us – the decision to open up a dental practice in 2006 at Canary Wharf. Bigger overheads, higher profile based in the shopping malls, but also more to lose if it went wrong!

We were confident that using the same sound business acumen and techniques we had used on the Wandsworth Town practice would ensure that the new practice would be a roaring success.

Within 12 months of opening, the Canary Wharf practice was doing extremely well, and growing beyond our expectations. How did we do it?With the right location, right team, and a bit of luck.

Learning Point 8: Always think big, or else go home. You need to think about growing your business, it may not be another location but it could be new services or more surgeries, but always be thinking about how to grow! Make use of any extra space in your premises. Step up your marketing efforts. Try to minimise your costs as much as you can by cutting expenses where possible. Raise your prices. Be prepared to borrow further finance to help grow the practice, or perhaps refinancing your current loans.

Click here to watch our webinar on how to grow a dental practice.

Get Your Structure and Systems Right.

And then practice number three, all due to systemisation and structure!

Our first two squat dental practices started in 2004 and 2006 respectively, both of which were in good London locations, with leasehold premises (as the freeholds were not available). Then, in 2009, after exiting a local Waitrose in Esher, we saw a disused and empty building that looked perfect for our next site.

Following discussions with estate and planning agents, banks and structural engineers, we received the keys in December 2009 to our first freehold commercial premises of over 3500 square feet, which was to contain practice number 3.

By May 2010 practice number 3 in Esher was officially opened in an affluent Surrey town. Third time around, we knew much more than the first time, but we also had written systems in place, which was key for our expansion plans.

Learning Point 9: Write down everything and put systems into place for everything you do, as this will help when growing and developing your team. It is vital that the practice can be run without you. If the practice relies too heavily on you personally, that can be a problem. Systematise your practice and procedures so that the business can be run on its own comfortably. Your procedures need to be well documented and accessible by the whole team. The team itself needs to be well trained in these procedures as well. A business that is run on systems, not on individuals, is much easier to scale and/or replicate in a new practice.

Click here to read more about structuring a dental group.

Always Be Ready to Sell

But then out of the blue…Remember always be flexible.

We were approached by a leading Healthcare insurer wanting to buy us out. Again, we were 50/50 but eventually in May 2013 we sold our Canary Wharf site. It was not in our plans, but it made considerable sense for our personal needs (we have young children after all) and this worked for us financially too.

Contact us to find out more

In late November 2015 our Fleet Street practice was born, and a year later Notting Hill gate opened too. Both in fantastic locations for a practice to serve the many working people in their respective areas. Our ability to open in a location like this came from us taking the big step back in 2004 into the unknown. The Neem Tree brand is growing with partners across the UK, so if you want to be part of it do get in touch.

Learning Point 10: Always be ready to sell, and we were in this instance. At the time we were not even considering a sale, however, if the right offer comes along, it is sometimes a much better idea to receive much more than you thought you would get and secure one’s financial position. You are growing a business, after all, and it is important to think of it in business terms. By maximising your turnover and reducing your costs, you can grow your practice to a point where selling it returns an enormous profit on your original investments.

Click here to read more about selling a dental practice.

Live and Learn

Would we do it all again? Absolutely!

We have learned so much, worked with some wonderful people, and have helped secure the financial future for our family. We achieved this whilst encountering so many challenges, but this has made us stronger and fitter and ready for the new challenges that lie ahead of us all.

Learning Point 12: Live a life of no regrets and learn from everything you do! Expect problems, expect failures, expect obstacles. Nothing worth having in life comes easy. It’s okay to get things wrong (within reason!), as long as you learn from those mistakes and do what you can to avoid them again in the future. You can read more about the five traits of failed dental start-ups here.

Click here to learn from our mistakes and watch our webinar on mistakes to avoid when setting up a practice.

Be Ready For a Challenge

So, is setting up a dental practice for everyone?

Honest answer; probably not. It requires stepping out of your comfort zone many times. Working extremely hard, taking decisions that impact not just you but many others, and basically putting yourself on the line. If you relish that kind of challenge and possess an appetite for calculated risk-taking, then you probably need to set up your own dental practice!

If you are serious about setting up a dental practice, here are our 5 top tips for success:

  1. Use professionals to help you – ensure they have experience of squats and have done these before
  2. Research the area thoroughly and review the competition
  3. Speak early about Finance to ensure you have enough of a deposit to see the project through
  4. Plan what sort of dental practice you want but make sure that it is affordable and use the saying: What do I want / What do I need / What can be afforded?
  5. Use the experience of others to guide you through the process

Learning Point 13: If you want to grow, you need to take risks, so if you have the appetite of being your own boss, become a serial (but calculated) risk taker.

Click here to watch our webinar on how to start a dental practice during a pandemic.

Regulations for a Start-up Dental Practice

The building for your new dental practice will need to have suitable planning use for a dental practice. Class E is the recently introduced new coding system for dental practices and this can be checked with the local council planning department.

You must register with the CQC as a provider – you must be interviewed and the premises is inspected once complete. Once you have the premises and the finance you should start the registration process, as this can take some time.

Our Expert Opinion

“Having opened many dental practices over the years, I personally know it is not easy. The key is building a great team to support you, finding a prime location, marketing it strongly and then ultimately doing great dentistry. Easy? No. Possible. Yes! If you have the vision to do this, it is possible but don’t expect a smooth ride!”

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.

How To Grow A Dental Practice

In this article, we’ll take a look at all the different factors you need to consider to grow a dental practice. From structuring your finances and accounts to digital marketing techniques, this guide will cover everything you need to know when it comes to growing a dental practice.

Why the Climate is Right for Growing a Dental Practice

According to a report published by IBIS World in 2017, the size of the dental market in the UK was £6.7bn, with a growth projection of 1.1% over the following five years. This means that the time is right to grow a dental practice. If you get it right, you can take advantage of the growing UK population, which is leading to a growing demand for dental health services nationwide.

The UK population is continuing to grow. By 2039 it’s estimated to reach 74 million. You can take a look at more detailed figures, provided by the Office for National Statistics. A growing population leads to an increased need for resources, including dental care. As strain on NHS dental care increases, there is an increased need for good quality private dental care.

The population is also ageing and, as the only part of the human body that has no self-repair ability, teeth require on-going repair and maintenance, if they are to last into later years. As I have discussed with several clients in recent years, there is plenty of opportunity to scale a dental practice, as long as the scaling process is completed correctly.

Listen to our podcast on the climate for dental practice growth in the UK.

Factors to Consider When Growing a Dental Practice

In order to grow a dental practice, it’s important to have a good understanding of the methods that you need to use. Making the right use of these methods is essential if you want your dental practice to expand and thrive.

From accounting and finances to the in’s and out’s of digital marketing, it’s essential that you consider all aspects of the business when you decide to grow your dental practice.

Click here to read more articles about growing a dental practice.

As a dental practice grows, there is likely to come a time when significant additional funding is required in order to scale further. This funding may be needed to purchase new equipment, to extend a current practice, or to buy more dental practices to become a group.

The first point I want to make is that it’s not all about profits when it comes to growing a dental surgery.

It’s important to consider the costs of running a practice, which are also likely to increase significantly over the coming years. For instance, payroll costs can account for almost 60% of revenue expenditure on average. In 2019 especially, the increase in the National Living Wage made a significant difference to dental practices that employ younger administration and support staff.

Click here to read more about the costs of running a dental practice.

These cost increases need to be factored into any decision to scale a dental practice. Other on-going costs that should be accounted for include non-payroll related expenses, such as the purchase of materials, payment of utility bills, insurance premiums and the cost of marketing.

The obvious lesson to take from all this is that any dental practice owner needs to concentrate their efforts on increasing revenue as soon as they take over at a practice or start up their own dental surgery. It’s these efforts that make expansion a possibility.

Click here to read about how easy it is to start, scale and sell a dental group.

Contact us to find out more

Work with Professionals When Looking for Growth and Acquisition Financing

In the same way as it’s important to work with expert dental accountants and dental solicitors when financing and buying an initial dental practice, it’s also vital to work with professional brokers when you plan to grow your dental practice.

Click here to book a free consultation with our finance team and discuss your options.

Never forget that a dental surgery owners talents lie with running the practice itself and not with accounting or legal implications. It’s better to work with experts to deal with these factors. on these aspects of scaling a dental practice with clients on many occasions and it’s made the process a lot simpler for them.

Click here to read the 5 reasons you need to use a commercial finance broker.

Actions

  • Contact a dedicated dental accountant if you haven’t already. You can read more about what look for in a dental accountant here.
  • Contact a commercial finance broker before you approach a bank or other financial institution to borrow finance. It’s important that you make sure the broker you work with has extensive experience in the UK’s dental sector. They will be able to make sure you choose the right option and get the best deal for your business.

Apply for Financing

There are a wide range of reasons for which you may need to raise funds as a dentist. From expanding the premises and equipping new surgeries to raising working capital or paying off outstanding debts, there will most likely come a time when you need to raise commercial finance.

Click here to find out more about funding options for dentists.

Banks and other financial institutions want to reduce their risk and tend to only lend to businesses that can prove they have reliable revenue and are in a position to make repayments on time.

It’s worth bearing this in mind when making decisions to grow a dental practice. Planning ahead is essential. Ideally, plan 10-12 months ahead of time, and make sure that revenue is optimised and accounts are up-to-date and accurate before applying for funding. When you apply for funding, be prepared to provide a significant amount of documentation including:

  • An up-to-date business plan.
  • Up-to-date and accurate accounts (personal and business).
  • Up-to-date tax records.
  • Details of expenditure.
  • Detailed analysis of proposed finance spending and growth of the practice.

Click here to find out more about how banks judge dentists.

Having everything in one place before applying for growth or acquisition funding makes a successful outcome more likely. 

You can find more webinars and articles on financing the growth of a dental practice here.

Actions

Structure Your Accounts and Finances Correctly

We’re dental accountants at heart and we firmly believe that structuring your accounts correctly can make or break your business. You can save time, money and effort when you go digital with your accounts and use programmes like Xero and Quickbooks. Automating your accounts and finances with these kinds of programmes brings huge benefits for your business. You can read more about the benefits of automated accounts here.

As we’ve already mentioned, it’s essential that you choose a dental accountant who has experience in the dental industry. It’s not enough to find a good accountant. They need to have a working knowledge and understanding of the tax, accounting and financial issues facing the UK’s dentists.

Click here to listen to our podcast episode on how to structure your finances.

Actions

Contact us to find out more

Maintain a High-Performing Team

When you set up your dental practice, you put a team in place that you could trust. It’s important to retain this team if you want to grow your dental practice successfully. This means that you have to consider several factors.

Make Sure The Working Environment is Positive.

A working environment that is less than positive will deter people from wanting to remain working at your practice. Make sure that everyone is aware of the vision of the practice and working towards it. You should also make sure that members of your team have access to the training and technology that they need.

Watch our webinar and listen to our podcast on leadership skills for dentists.

Encourage Good Performance.

You cannot grow a dental practice without having a high performing team in place. This is why it’s so important to make use of key performance indicators, SMART objectives and an effective appraisal system that includes an emphasis on personal development.

Read our article on building a dental team.

Make Sure That Communication Works.

Effective communication is central to the success and growth of any dental practice. This may sound easy, but communication can become confused and messy if you let it. Make use of tools such as a communications strategy, an Intranet system and weekly team meetings, to help make sure that this does not happen. It may sound simple, but a clear communication strategy that everyone understands can make the world of difference in any workplace.

Click here to watch our webinar on The Language of Communication.

All of these factors can help you to keep your high performing team in place.

Actions

  • Set KPI’s and objectives with your team.
  • Dedicate a specific time each week (or every 2 weeks at the most) to meet with your team to listen to their ideas and air any issues.
  • Make sure you are open about, and that your team buy into, your vision for the practice. Be prepared to make some tough decisions about staffing if any of your team do not buy into the vision and objectives of the practice.

Use Marketing to Grow A Dental Practice

You can have an exceptional dental practice, but it’s not going to grow and flourish if you do not market it effectively. Optimised marketing is essential to the growth of any business. It’s important that you emphasise the benefits that people can get from choosing your dental surgery, rather than simply concentrating on the brand itself.

It’s these benefits that will attract people to your practice and make it easier for you to retain their loyalty.

The first step is creating a website for your dental practice that ranks highly on Google and converts patients. It’s important that you understand the basics of SEO for websites, if you’re planning on creating it yourself. You can find out more about SEO for dental websites here.

Remember to keep your website’s layout simple. Make sure everything is easy to find and the menus are simple to navigate. Whilst you need to pepper your website with videos, images and other widgets, it’s essential to keep in mind that speed is paramount – don’t go overboard! Do not forget to optimise your website for mobile, as more people use mobile devices to access the Internet than use desktops or laptops.

You can find out more about creating a website for dentists here.

When you are marketing your dental practice, do not forget to make full use of social media. This is where large numbers of potential patients spend time, and it’s the perfect place for you to reach them and communicate with them. You can also choose to pay for social media advertising, as well as other advertising options, such as Pay-Per-Click (PPC) advertising.

Click here to read more about growing a dental practice with social media.

Your website and social media’s content should be central to your marketing efforts. You need to make sure that the content is fresh, interesting and well-written. Starting a blog may seem time-consuming but you’ll be surprised at how easy it is to get into – and how useful it is for marketing! Start writing your top tips, start educating patients on your different treatments, start a newsletter and you’ll start attracting new, interested leads.

Click here to read more about writing content for dentists.

By getting the marketing right, you’ll attract new patients, convert leads and retain new patients far easier. Digital marketing especially is becoming more and more important with each year. You need to make sure you are paying attention to SEO, social media and PPC in particular to ensure the growth of your patient list and practice.

Watch our webinar on Using Marketing to Increase Profits.

Actions

  • Perform an SEO audit on your website and improve the on-page and local SEO as much as you can. You can learn more about SEO for dental websites here.
  • Start writing blogs and articles, as well as creating video content with your team.
  • Improve your social media profiles and start posting your blogs and engaging with patients – set aside an hour a day for either you or a team member to post and respond to followers.
  • Start some simple Google Ads campaigns using your most popular treatments and your location as keywordsfor instance ‘invisalign Brighton’, ‘dental implants Wigmore Street’
  • Use these 5 free ways to grow your dental practice.

Attract Emergency Patients

Emergency patients are our secret weapon to growing a dental practice. Emergency patients are actively and urgently looking for a dentist right now. They’re most likely in pain, a little desperate and willing to travel farther than general patients. This means that, while other patients are idly considering dental work sometime in the future while they look at your website, emergency patients are looking for a dentist right here and right now. They’re hot leads just waiting to be converted.

The best bit is that you’re not just trying to attract patients for one-off emergency treatment. You were there for them when other dentists weren’t – maybe even their regular dentist. If your front-of-house staff are good enough, this gives you a real chance of turning these emergency patients into regular patients. Patients will travel farther than you think for a dentist they like – make sure that dentist is you!

Click here to listen to our podcast on using emergency patients to grow a practice.

Actions

  • Make sure your website has a page dedicated to and optimised for emergency dental appointments.
  • Give patients as many ways as possible to contact you in an emergency – for instance; WhatsApp, Facebook messenger or you could forward the practice phone to your own personal mobile out-of-hours.
  • Offer as many evening and weekend appointments as are feasible for your team and practice.
  • Set up PPC campaigns on Google Ads and Facebook Ads for emergency dental appointments in your area.

Contact us to find out more

Retain New Patients

Attracting new patients is not enough to grow a dental practice, you need to make sure that they are retained. There are several things that you need to do, in order to make sure that this happens.

  • Make a good first impression. That includes maintaining a welcoming but tidy waiting room and making sure that reception staff are friendly as well as efficient. The importance of friendly front-of-house staff that your patients get on with cannot be overstated!
  • Engage with your patients. No-one expects you, or the associates who work at your practice, to be best friends with patients. However, you do need to engage with them. Few patients will return to a dentist who is unapproachable and distant.
  • Remind patients in a friendly manner. We all lead busy lives, and it’s easy to forget things like dental check-ups. Keep your patients engaged by sending them friendly reminders, but do not harass them with constant contact.
  • Monitor the retention of patients. In order to understand how your patient retention efforts are working, you need to monitor their effectiveness. If you do not do this, you cannot hope to grow your dental practice successfully.

Read our article on retaining new dental patients.

Actions

  • Set up a simple contact form on your website (just ask for name and email address) and encourage people to sign up for a newsletter. Send these contacts offers, discounts and updates once a month.
  • Set up a referral programme and offer benefits to patients who return and refer a friend.
  • Upload your patient list to Facebook and encourage patients to follow you on social media. Make sure you are posting interesting content and engaging with your followers as often as possible.
  • Install an automated process for reminding patients of their upcoming appointments or that they need a check-up soon.
  • Set up a cheap brand awareness campaign on Facebook Ads and Google Ads targeted at audiences who have already been on your website.

Expanding a Dental Practice

For anyone who is successful in scaling a dental practice, there will hopefully come a time when a physical expansion is necessary. There may be an option to re-design the current surgery in order to make this happen, or it may be necessary to acquire additional property, in order for expansion to take place.

Optimising the use of current space

The first question to ask when looking for room to expand is, “How effective is the current use of space?” For instance, staff break rooms do not need to be large, luxurious spaces. They simply need to be a place to take a reasonably comfortable break before returning to work. It may be possible to use some of this space as a treatment area.

Unused hallways and storage areas can also be utilised. Taking the time to consider the current usage of the entire surgery space, and coming up with new design options, can save on the cost of having to acquire additional premises, in some circumstances.

Click here to read our guide to commercial mortgages.

Dealing with the landlord

This will only be an issue if the leasehold of the property is not owned by the dental practice. If this is the case, it’s important to discuss any refurbishment or re-design ideas with the landlord, before any work commences. Failure to do so could lead to legal complications further down the line.

Depending on how good or bad the relationship with the landlord is there could be an argument for involving a dental solicitor in the discussions, or at least seeking their advice and support.

The Issue of Planning Permission

If the purpose of the premises is to remain the same, it’s unlikely that planning permission will be needed. However, there may be times when there will be a need to acquire planning permission when extending a dental practice. For instance, part of the property which is currently being used as a residence may be converted for business use, or neighbouring residential property may be purchased for conversion.

Any property that is going to be used as part of a dental practice should have Class E planning consent. If the correct consent is not in place, it’s possible that enforcement penalties could be imposed. It’s always best to check if planning consent is needed, before going ahead and making any changes. The government provides advice on this subject.

Click here to read our articles.

Our Expert Opinion

“There’s no one particular route to grow a dental practice, it requires a multi faceted approach to ensure you achieve your goal of growth. Marketing, finance, pricing, teamwork plus of course great clinical care, all contribute to growing your practice.”

Actions

  • Contact a commercial finance broker to discuss your financial options when it comes to expanding the practice.
  • Conduct market research and be certain you will have the capacity to fill the extra surgeries or chairs after expansion.

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.

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.

How to Sell Your Dental Practice in 9 Steps

Sell your dental practice while maximising its value, and minimising your tax

No dental practice sale is identical to another. It usually takes at least 6 months for the process of selling a dental practice to be completed, but this varies depending of the type of practice that is involved and the support structure that is in place. The process itself should always involve certain important steps.

If you are wondering what the proper steps are to sell a dental practice, keep these 9 points in mind. If you’re ready, contact us today and our expert dental practice sales agents will help guide you through the process

Step One: Work out your timeline to sell your dental practice

When are you looking to sell your dental practice? Is it in the next 12 months, or is it in 3-4 years time? Are you thinking of staying on working at the practice or are you looking to make a clean break when you sell?

We have often found that it takes around 6 months to sell a dental practice. However, all deals are different, they all present their own challenges and they can all take varying lengths of time.

When you plan on selling your dental practice, and how far ahead in the future the sale will be, is crucial to making sure you get the best possible price.

Once you have a clear idea of when you are thinking about selling, work backwards and plan what you think needs doing. Ask yourself these questions:

  • What is the financial performance of your dental practice like?
  • How profitable is the dental practice?
  • Does it show a steady improvement or decline?
  • If in decline, what needs to be done to turn the situation around?
  • How dependent is the practice of your income generation?
  • How dependent is the practice of any key income earners?
  • If you fell ill at the practice, would it still be profitable?
  • If not, what would need to be done to make it profitable in such a scenario?

If you have no idea what the answers are to these questions, then you have your work cut out, and you really need to get your house in order to ensure you achieve the sale you want in the timeline you want. Otherwise, you will struggle to get a qualified buyer with the right money for your dental practice.

Action Points

  • Determine your desired timeline for selling your dental practice, considering whether it’s within the next year or in 3-4 years.
  • Decide if you plan to continue working at the practice post-sale or if you prefer a complete departure.
  • Understand that selling a dental practice typically takes about 6 months, though timelines can vary due to unique challenges each deal may present.
  • Assess the current financial performance and profitability of your dental practice, noting any trends of improvement or decline.
  • Identify necessary actions to improve the practice’s financial health, especially if it’s currently in decline.
  • Evaluate the practice’s dependency on your personal income generation and its capacity to remain profitable in your absence, such as during illness.
  • Develop a plan to address any issues identified in the financial performance and operational dependency to ensure the practice’s profitability and appeal to potential buyers.

Click here to watch our webinar on selling a dental practice.

Step Two: Raise the profitability to sell a dental practice

The times of using a % of your revenue figure as a metric for valuing a dental practice are truly gone. Whilst revenue may inflate your ego, it will be your profit that will determine your valuation and the price you sell your practice. A valuation of your goodwill will more than likely be based on profitability, whilst using turnover purely as a secondary indicator.

Click here to read more about growing a dental practice.

EBITDA (Earnings before Interest Tax Depreciation and Amortisation) is a term you may have heard about. This is a common measure used to determine the “cash” profit of the business and is increasingly used to value dental practices, especially by the cash-rich Dental Corporates. Focus on increasing your EBITDA to maximise the value of your practice goodwill and other assets.

Click here for more information on EBITDA.

Action Points

  • Shift focus from revenue to profitability as the key determinant in valuing your dental practice.
  • Understand that goodwill valuation will primarily be based on profitability, with turnover serving as a secondary metric.
  • Familiarize yourself with EBITDA (Earnings before Interest, Tax, Depreciation, and Amortization) as a crucial measure of “cash” profit.
  • Aim to increase your practice’s EBITDA, as this metric is commonly used by Dental Corporates and others in the industry for valuation purposes.
  • Implement strategies to enhance the profitability of your dental practice, thereby maximizing the value of your practice’s goodwill and other assets in preparation for sale.

Step Three: Get your financial house in order to sell your dental practice

Whilst high-quality clinical dentistry is essential in order to sell a dental practice, it is critical to have accurate and up-to-date financial information about your dental practice as well. Why? Well, the reasons are two-fold.

  1. If you are serious about improving your financial performance, you will need to know where things are working, but also where problems lie. Not knowing the figures means you don’t really have your finger on the pulse with respect to your practice performance and, therefore, its valuation. Knowing your financial performance, and adjusting it accordingly, is imperative to maximising the sales value of your dental practice.
  2. When it comes to showing off your financial performance to prospective buyers, having an up-to-date set of accounts (last 3 years), plus recent management accounts (last 12 months) really are essential. These can be a deal breaker if not available, as a serious buyer is only going to buy your practice if they have accurate financial information about your practice in the first place.

If you have up-to-date financial information, it is then imperative to ensure your cost base is managed well, whilst your revenue is strong – Why? So you are maximising your EBITDA.

Contact us to find out more

For instance, look at your staff costs; have you got too many staff for the revenue you are generating? Are your laboratory bills carefully managed? What about your materials, have you sourced cost-effective suppliers? And do you have a tight control over ordering each month? How much are you spending on marketing? It’s very easy to spend on marketing, but are you getting a good return on it?

Click here to find out more about accounting and managing finance in a dental practice.

Run through each line of your accounts and see where you can make potential savings, then act on making the changes needed. Why? Because every £ saved increases your profit, which increases your EBITDA, which increases your practice valuation.

In summary, if you want to get top whack for your practice, make sure you have up-to-date and accurate financial information for any prospective buyers, but have also ensured your cost base is well managed, and your revenue is maximized.

Action Points

  • Ensure your dental practice’s financial information is accurate and current, as this is crucial for both valuation and sale preparation.
  • Conduct a thorough financial analysis to identify strengths and areas for improvement within your practice.
  • Maintain a clear understanding of your practice’s financial performance to effectively manage and adjust operations for maximum sales value.
  • Prepare and organize the last 3 years of financial accounts and the most recent 12 months of management accounts for prospective buyers.
  • Recognize the importance of these financial documents in providing transparency and building trust with serious buyers, potentially influencing their decision to purchase your practice.

Click here to listen to our podcast on how to structure your dental practice finances.

Step Four: Find or build a team that will help you get maximum value when you sell a dental practice

Running a dental practice is one thing, selling it successfully is something completely different. To maximise the sale of your practice, getting the right advisors early on can significantly add to the ultimate sales price.

Creating a power team makes it far more likely that a sale will be secured at the right price. Accountants, brokers and lawyers with significant dental experience, are essential to getting an excellent deal.

Our experience has shown that it really is essential to have people who know and understand your practice before it is even put on the market for sale.

A few tweaks in the business in the right place can optimise its performance, which will ultimately improve the practice sale value. So, make sure you have thought through your timeline for sale, then work with expert dental accountancy, legal and marketing advisors that can recommend a course of action.

Specialist Dental Sales brokers

Making sure to engage a specialist dental sales broker is important. It provides far more value than trying to sell a practice without professional assistance.

Specialist dental sales brokers have access to a long list of active, interested individuals and corporates that want to buy your practice, who they can introduce to clients. They can also professionally value practices, create sales brochures and deal with questions about, and interest in, a practice. The normal cost of using this service is around 2.5-5% of the sale price.

In other words, a dental practice sales broker can get you a much better price for your business.

Click here to read our 8 things you need to know when choosing a dental practice sales agent.

Specialist Dental Accountants

A specialist dental accountant and tax advisor helps a seller to get the most from the sale of a dental practice. They know how to present accounts in a way that is attractive to buyers. They can also provide advice on aspects such as ownership of the business and how to optimise the tax position of the seller.

Seek advice early from your Specialist Dental Accountant, as before selling a dental practice there maybe tax structures that could be considered before the final sale, which could save tax.

Click here to find out more about our dental accountancy services.

Specialist Dental Solicitors

It’s never a good idea to use the services of a solicitor who has no experience of the dental practice market when selling a dental surgery. They may be an excellent solicitor when it comes to dealing with the sale of a home, but without the required specific experience of the dental industry they could cause serious delays with the sale, or it could collapse altogether.

Do not forget, the solicitor that is chosen will be advising on vital aspects of the sale such as the contract, due diligence and property transfer, so expertise is essential. The normal cost of this service is around £5,000 – £10,000 for a sole trader or partnership and around £10,000-£20,000 for a limited company.

Click here to listen to our podcast on the 7 legal pitfalls of dental practice sales.

Action Points

  • Assemble a team of advisors with extensive dental industry experience to aid in selling your practice.
  • Partner with accountants, brokers, and lawyers who specialize in dental practices to ensure a favorable sale outcome.
  • Implement strategic business adjustments recommended by your advisory team to enhance your practice’s performance and sale value.
  • Engage a specialist dental sales broker to access a wider pool of potential buyers and benefit from professional valuation and marketing services.
  • Consult with a specialist dental accountant for tax optimization and financial presentation advice tailored to attract buyers.
  • Retain a solicitor with dental market expertise to handle legal aspects of the sale efficiently, avoiding potential delays or deal collapse.

Step Five: Practice visits and information disclosure

From our experience, no-one sells a dental practice better than the owner. They are the best person to answer any buyer questions, honestly and thoroughly. This is why I would always recommend the seller is present when buyers view a practice.

If you are the owner, try and arrange visits when you are around. This will enable you to sift through the serious buyers, but also provide you with the opportunity to sell the key benefits of buying your practice.

Remember, you may end up working at the practice for some time post-sale, it is imperative you understand and (maybe even like) the incoming party!

At this stage, the prospective buyer may well request certain information from you too, such as accounts, management accounts, details of the property lease, CQC registration details, details of the dentists working in the practice etc.

If you have your house in order, as detailed in step 3, you will have no problem in collating and providing this information to them. However, make sure that non-disclosure agreements have been signed, which will protect both parties.

Click here to read more about associated costs that buyers will scrutinise.

Contact us to find out more

Non-disclosure agreements

Non-disclosure agreements are an essential feature of a dental practice sale. They prevent potential buyers from discussing the sale with anyone except their own financial advisors. This is important as you do not want any details of the sale to leak out prior to completion.

It’s not even a good idea to disclose any information to people working in the practice. There is no certainty that a deal will go through until completion actually happens. It’s not worth creating stress and uncertainty amongst the dental practice team when there is no valid reason to do so.

Click here to read more about retirement and transition planning.

Document Other Agreements

Another important point to remember is that you may have verbal agreements with your support staff. When you’ve been running a business for so long, sometimes it can be easy to let certain things become purely verbal or even unspoken agreements.

When you’re selling a dental practice, it’s essential to make sure that all verbal agreements you may have with support staff, contractors or suppliers are documented properly. Make sure your agreements are in the form of a written contract to ensure a smoother transition.

Action Points

  • Ensure your presence during practice visits to effectively communicate the value of your dental practice to potential buyers and answer their questions directly.
  • Organize viewings for times when you can be present, allowing you to assess buyer compatibility and sincerity while showcasing your practice’s key benefits.
  • Be prepared to provide detailed information such as financial records, lease details, and CQC registration to interested buyers, ensuring all documentation is in order.
  • Require non-disclosure agreements to be signed by potential buyers to maintain confidentiality and protect sensitive information about the sale.
  • Document all verbal agreements with staff and suppliers to formalize arrangements and ensure a seamless transition to new ownership.

Step Six: Consider ALL offers before you sell your dental practice

When you put your practice out for sale you may well receive various offers. The key is to ensure you review each and every offer in detail.

Whilst an offer from your Associate may be the best one financially, they may struggle to raise the money from the bank, especially in this climate. Whilst a Dental Corporate may well offer you a slightly lower price, they can typically move quickly and get the deal done, whilst your Associate is still filling in forms for the bank!

Always assess each offer you receive carefully, knowing the full facts and the exact conditions of purchase, such as a tie-in to continuing to work at the practice for a few years. In addition, you may be requested for key personnel to stay on if you accept the offer, so the offer made may need to satisfy some of the existing team by getting them to sign and stay for a period too.

Details of the offer and knowing the buyer has the economic power to actually buy the practice are critical at this stage, or else you really will be wasting your time on offers from keen buyers who actually have no substance behind them.

An offer that guarantees a large sale price may seem like the best choice, but it’s not a great deal if the buyer making it is going to struggle to secure funding. There are many things to consider when looking at offers that have been made. Here are a few which are fairly common.

  • Can the buyer secure funding easily and quickly?
  • Is a lower offer the best choice as a quick sale is guaranteed, so associated costs will be reduced.
  • Is staying on as an associate part of the offer?
  • Are any of the current team part of the offer, do they need to agree to stay in order for the deal to progress?
  • Does the buyer have the substance for the sale to be successful?

It’s never as simple as just picking the highest offer and running with it.

Click here to read our 5 mistakes to avoid when selling to a dental corporate.

Step Seven: Negotiating a deal and due diligence

Once an offer comes along which looks interesting, it’s time for the dental specialist sales broker to structure the right deal for the seller, taking into account what the seller expects from the sale and what their tax situation is. There are several different arrangements for payment that can be put into place.

  • Upfront payment transfer for NHS driven profits.
  • Deferred payments when performance based criteria comes into play.
  • Earn out agreement when a buyer is not willing to meet the sale price now but payment of an additional amount based on profits can be made at a later date. This can mean that the seller achieves more than the original sale price at the end of the day.
  • Negotiated UDA rates for a seller who is going to remain working at the practice after the sale.

Once the deal has been negotiated and agreed, Heads of Terms should be put in writing so that there is no room for misunderstanding. These terms will normally be written by the buyer’s solicitor but they should be scrutinised by the seller’s expert dental solicitor. They should always be marked as “subject to contract”.

Do not sign these without taking legal advice.

A timeline for exchange and sale can be agreed at this point, but is subject to due diligence being completed successfully.

Once the heads of term have been signed and agreed, the buyer will now want to carry out due diligence on what they are buying. This will include due diligence in the 3 key areas of legal, clinical and financial.

Depending on the type of buyer, this can be quite a thorough and exhaustive process which requires you, the vendor, to be organised and quick in providing the information by key dates.

INFORMATION THAT WILL BE REQUESTED INCLUDE:

  • Historic Accounts and Financial records
  • Clinical patient records
  • CQC registration details
  • Employment contracts
  • Associate agreements
  • Supplier contracts
  • Hire purchase and lease contracts
  • Property lease agreement
  • Details of the performance of the practice
  • Loan agreements
  • Complaint details
  • Patient list details

This list is not exhaustive. Due diligence can be a complex process and sellers always need to be prepared to provide any requested information and to answer buyer’s questions in a transparent manner.

Click here to read more about due diligence.

Standard Purchase Agreement

Both parties should be protected as part of a Standard Purchase Agreement. The buyer’s solicitor will normally request a warrant from the seller to state that all contractual and financial information provided is accurate. The seller’s solicitor should negotiate to ensure that any inclusions in the warrants minimise the risk of any potential future claims.

A Standard Purchase Agreement will normally include:

  • Sale of the practice and assets.
  • Handover.
  • Post completion considerations.
  • Partially completed treatments.
  • Employees of the practice.
  • Non-Solicitation and restrictive covenants.
  • Warrants.
  • Guarantees.

Step Eight: Exchange and completion

Once the due diligence has been completed, and the buyer is satisfied with what they are buying, then it is down to finalising the transaction. If the buyer is using a bank to finance the transaction then they will need to have satisfied all their necessary criteria too.

If all parties are happy, the deal can then be finalised by the solicitors of both parties.

Click here to read the 7 things we wish we’d known before selling our first practice.

Step Nine: Banking the money and paying the tax man!

Your solicitor will more than likely receive the funds due electronically. These will then be wired to your bank account, but don’t spend it all too quickly!

If money is being paid up front, this will normally be transferred into the bank account of the seller’s solicitor on the date of completion.

Enjoy it, but use it wisely and remember it is more than likely you will have a capital gains tax bill to pay.

Under current tax legislation, you may be entitled to Entrepreneurs relief against the Capital Gains Tax payable. If so, this may reduce the effective Capital Gains tax rate to just 10%. There are various criteria that need to be met to ensure you achieve a rate of just 10%, so seek professional advice before you sell.

Action Points

  • Anticipate the receipt of funds electronically through your solicitor, who will then transfer them to your bank account.
  • Understand that upfront payments are typically transferred to the seller’s solicitor’s bank account on the completion date.
  • Exercise financial prudence with the newly acquired funds, keeping in mind the potential capital gains tax obligations.
  • Explore the possibility of qualifying for Entrepreneurs’ Relief, which could reduce the Capital Gains Tax rate to 10%, and ensure you meet the necessary criteria.
  • Consult with a tax professional or financial advisor to navigate the tax implications effectively and to make the most of any available tax reliefs.

Click here to read the 7 essential things to consider before selling a dental practice.

Contact us to find out more

What is Samera’s Process for Selling a Dental Practice?

We like to simplify the process to 8 major steps when we help dentists sell a dental practice.

  • 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 consists of appointment making with potential buyers who have already been screened and viewings.
  • 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.

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

Selling a Dental Practice FAQs

How Do I Value My Dental Practice?

If you want to know how to value a dental practice, you firstly need to know that every single practice is unique, and every single dental practice has a range, where a lower range and a higher range. Of course, this will be determined by the financial accounts, so we always ask for at least the last 3 years’ sets of accounts, and the most up-to-date management accounts.

We analyse the potential value of a practice by visiting the practice and using a comprehensive questionnaire we have tailor made for dental practice valuations. We then create a valuation report and discuss with you the exact market value of your dental practice. If you are selling a practice and want to know what it is worth, please do get in touch.

You can find out more about determining the value of a dental practice here.

How Long Does Selling A Practice Take?

The length of time that it takes for selling a dental practice in the UK varies subject to several factors, such as the type of practice. However, the dental practice sales process averages to 5 and a half months from beginning to end, (from the initial inquiry to the completion of the deal).

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

How Do I Maximise The Value Of My Practice?

In order to maximize the value of your dental practice, you need to know that every single dental practice has a price range. In order to maximize the price, the first and most important thing to do is to value the practice properly according to market value. Generating a loss of interest, creating a successful and strategic marketing campaign.

At Samera Dental Practice Sales, we have a huge database of active registered buyers. Most importantly, we have a personable and sustainable relationship with our buyers that keep coming back and buying practices from us. We had a very successful year last year. We sold all valued in excess of £100 million worth of practices, with most of the practices achieving above asking price. If you are selling a dental practice and want to know how to maximize its value, please do get in touch.

What Do I Need To Sell My Practice?

If you are selling a dental practice, there are a few documents and contracts that you should have prepared for any potential buyers to look at. For example, any buyers would want to have visibility of their last 2 years’ sets of accounts, as well as the latest 12 months of management accounts. Also, if you have a verbal agreement with any of your support staff, do make sure that these agreements are documented and written down in a contract, so that any potential buyer will continue to pay and remunerate your staff as you currently do.

Most importantly, if you are thinking of selling a dental practice, perhaps you should think that if you were a buyer, what would you want to know about your practice? This is always a good question to ask yourself, alongside the reason for selling your practice. If you want to know more about what documents and what contracts should be prepared ahead of selling a dental practice, please do get in touch.

Why Do Some Buyers Choose To Pay Over A Deferred Period?

A deferred payment on the completion of a dental practice sale is when part of the agreed price is paid over billable time, over a number of years. That is always subject to either target for personal target achieved in terms of income, or practice turnover. We see more and more deferred payments applied to some of the deals completed over the years.

This is usually done by some corporates, and often some individual buyers, where they think that there might be an element of risk associated with the full price. They might want to protect themselves by applying for the deferred payment. If you want to know if your practice qualifies for deferred payment, or it might be subject to a deferred payment negotiation, and how to negotiate a deferred payment, please do get in touch.

Should I Get A Practice Evaluated When Selling To An Associate?


If you’re thinking about selling a dental practice, and even if you’re thinking about selling to your associate, you should always have a valuation carried out of your practice. Imagine if you’re selling a practice to your associate, and perhaps you decide to stay and work together for a number of years. Perhaps you sell below market value, and you realize a year or two year later you are above market value; clearly, it’s going to create some animosity with you and your associate.

However, even if you don’t decide to stay, it’s always advisable to achieve the best available price, and the best deal structure. If you want to know what your practice is worth and if you want any support in how to negotiate with your product associate, please do get in touch.

Why Should I Use A Broker For Selling My Practice?

A broker will help you to achieve the best price and the best possible deal structure available on the market by engaging with as many buyers as possible to create a loss of interest and examine the practice you’re thinking of selling.

Click here to find out more about finding a dental practice sales agent.

Why Should I Use Samera As My Broker?

We have a huge database of active registered buyers, corporate buyers or an individual buyer looking to purchase a practice. Most importantly, we have a personable and sustainable relationship with all of our buyers. We always match the right buyer with the right practice for the best price and for the best deal structure available in the market. We work on success. Your success is our success.

Click here to book a consultation to find out more about how we can help.

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 Should I Consider When Buying A Corporate Practice?

I think you should consider buying an ex-corporate practice. With corporates, they always have a good marketing strategy and they are usually very CQC compliant. They’re great with their policies and procedures. They really know how to run a day-to-day dental practice. The cons that you should consider are why are they selling their practice in the first place? Consider it just might not fit in their strategy or there might be other reasons, and that’s something we could help you with to see whether this purchase would be suitable for your needs.

What Do I Do With My Equipment Still Leased?

If all or part of your equipment is leased you could either transfer the arrangements to the buyer, if they are in agreement or paying 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.

Will The Dental Sales Process Trigger A New CQC Inspection?

The Care Quality Commission is another potential reason for a delay in practice sale, even sometimes 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 a practice will involve deregistration of the seller and registration of the buyer to work at the practice, and 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 when planning to sell a practice.

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 for you and your qualified staff, professional indemnity insurance, employer’s liability cover, autoclaves, compressors and X-Rays.

Have all those ready and it will save you time when selling a practice.

What If I Have 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 your 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.

What If I Own The Property?

The options are either selling the property, or have a lease in place with the buyer. If you are selling to a Corporate, you should know that the property aspect of the deal is not their main interest. However, they may acquire your property if you wish to sell it. 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 selling or not.

What Issues Do You Come Across When Selling A Practice?

We have never encountered an issue that we cannot resolve.

No practice is the same but we have never encountered an issue that we cannot 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.

You can find out more about issues in the selling process here.

What Is The Sales Process Of A Dental Practice?

We like to simplify the process 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 consists of appointments making with potential buyers already been screened and viewings.
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.

You can find out more about the selling process here.

When Should I Inform My Staff Of The Sale?

Selling a dental practice is a very emotional and challenging time in any dental owner’s life.

Informing your staff is a crucial step in the dental practice sales process and this must be done at the appropriate time.

If the timing is wrong, it could create unnecessary stress and uncertainty amongst your loyal and faithful staff, and what if the sales are not completed? The risk is ending up with creating disruption, loss of trust, loss of revenue and more costs.

Your solicitor will be able to advise you when the right time to inform your staff of the sale is.

You can find out more about transition planning here.

What If I Have An NHS Contract?

If your contract is time-limited (PDS) instead of open-ended (GDS), it may be worth considering a conversion, as a GDS contract (if possible) may attract more buyers. There are risks when converting the contracts, so it is always advisable to seek legal and financial expert support.

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.

Do I Need To Prepare An Inventory?

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

What Do I Do After Selling My Practice?

Consider accurately life after selling your dental practice, and make plans ahead of marketing the practice.

Whether you are retiring and want to cash in, or want to continue working in the practice or wish to set up a new practice, consider your options prior marketing your practice, and talk to a professional advisor who has helped others make the best choice before.

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 have experienced some dental principals going down the route of a solicitor who may be brilliant dealing with selling houses but could slow down the process of selling a practice.

Using an expert dental solicitor will ensure you get the right advice at the right time within budget.

What Is Due Diligence?

Due diligence is a very important exercise carried out during any dental 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 on offers is accurate and precise. Information such as accounts, management accounts, patient numbers, staff contracts, NHS contracts and any legal issues such as change of control clauses, lease and property contracts, just to name a few of the documents are usually checked at this stage. An expert legal and financial team will know what to look for in a professional and time-effective way.

Our Expert Opinion

“I have learnt that to sell your practice for the best terms available is it should always be ready for sale. Instead of thinking you can pick up the phone and ask someone to sell it, you should have everything prepared in advance to stand a chance of getting the best terms available. This means all contracts in place, all accounts up to date, and of course ensuring it is firing on all cylinders, this way you will always get the best available terms out there, as you will then have a wider pool of buyers.”

Sell your Dental Practice with Samera

If you’re thinking about selling your dental practice then Samera can help make sure that you find the right buyer and the best price for your business. If you want to get the best price possible when you sell your dental practice, you need to build the value and grow the revenue to ensure you get the best return on your investment.

Book your free consultation to find out how you can grow the value of your practice before you sell.

More on Selling a Dental Practice

For more information please check out the articles and webinars in the selling a dental practice section of our Learning Centre, like our guide on How to Sell a Dental Practice in 9 Steps.

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