‘I want to buy a dental practice’
 

Dental News
Article detail

See the following article detail about

‘I want to buy a dental practice’

0845 527 9810

Article details for

‘I want to buy a dental practice’

 

‘I want to buy a dental practice’

Buying a dental practice is easier said than done. However, this remains a firm aspiration for many associates who clearly see a value in owning their own business because of the long-term investment opportunities.

A determined approach, with guidance from expert professional advisers, is essential to a successful purchase. Finding the right practice in the right location can be difficult, but associates should never overlook the challenge of arranging finance and the associated costs of the purchase. There are some fundamental issues to deal with along the way.

Consider your ‘strategic buying position'
At the very least, a basic self-assessment of your experience and financial position is helpful. However, it is equally important to consider the type of practice you would want to buy and how this might fit in with your career plans. Banks will want some reassurance that you are able to manage your new role. For example, concerns might be raised if your UDA output is much lower than that of an outgoing principle. It is quite common to want to buy a practice jointly. This certainly has some advantages, but it will require the right practice with a sufficiently large NHS funding or private patient list.

Specialist skills and a strong CV are often an advantage and may be expected by a bank if you intend to develop the practice in a specialist direction. This can work to your advantage, as can outlining to the bank opportunities such as developing a private practice, or using surgery space on days where it is unoccupied.

Get a professional valuation
Ensure you are paying a realistic price for the practice and that there is sufficient
profitability to make the purchase viable. A professional valuer should visit the practice and make a detailed assessment of the goodwill, fixtures, fittings and equipment. Your valuer should examine the practice accounts and schedules and alert you to any potential problems or opportunities. The valuation report will add weight to your finance application and provides the bank with much of the required background information to assess a finance application.

Raising finance: don't fall at the first hurdle and choose the right bank

There are a small number of banks who offer a specialist lending facility to dentists. You are well advised to use these banks. They tend to offer the most competitive interest rates and their credit team (the decision makers) will understand how a dental business operates. A dedicated bank manager, experienced in dental lending, will be assigned to you from the outset. Banks without a dental lending division will probably want your business. Beware of this – your application might be rejected later down the line by a decision maker who applies non-dental profit expectations or a non-dental valuation to the practice you are buying.

Seek independent specialist advice on raising finance
A specialist independent adviser can prepare a detailed ‘lending report' in support of an application. This will cover your financial profile and that of the practice with commentary on why you are a suitable purchaser.

This offers reassurance to the bank that you meet their lending requirements without undue risk. The banks will expect you to cover the loan repayment in the event of death or ill-health. They will insist on an ‘assigned' life cover policy, ‘adequate' income protection, surgery insurance and practice expenses (locum) insurance. You should seek advice from an independent adviser to make sure you have  dental-specific cover.

A strong application which is  supported by a ‘lending report' should allow you to borrow the funding you require or at least reduce the requirement for a deposit or alternative security.

Consider the costs involved
Specialist legal advice from an experienced dental solicitor is essential to make sure that issues such as the contract transfer are dealt with properly.

You could expect legal costs and bank fees (including valuation costs) to be between £5,000 and £10,000. Some initial costs can often be added to your loan and repaid at a later date. There will be additional monthly costs to consider such as insurances and the loan repayment itself. You should expect your accountant to charge a higher fee for practice accounts than associate accounts. Practice owners will rightly tell you that running a business while fulfilling a clinical role is a challenge in itself. However, for many this is a rewarding career path which offers control over your future and the opportunity to build up a saleable asset.


Jon Drysdale is an independent financial adviser and director of Practice Financial Management Ltd, a leading practice valuer and sales agent offering a wide range of independent business and financial services to dentists nationwide. PFM also offers a comprehensive service to associates buying a practice.

 Posted on : Tue 10th - Nov - 2009

 

Call Dental Support UK

Premium IT Support

  • All Servers & workstations covered..
  • Saturday Cover INCLUDED.
  • Telephone support.
  • Remote support.
  • 4 hour on-site Server response.
  • System monitoring.
  • Network monitoring and security.
  • Anti-Virus & Application updates.
  • Unlimited Remote Server Data backup.
  • Loan equipment on hardware failure.
  • Reduced rates for PC parts supply & installations.

No matter how big
your practice you
pay the same
price!!


ONLY

Click here for more info
Dental News Archives 2018

August - 2018
July - 2018
June - 2018
May - 2018
April - 2018
March - 2018
February - 2018
January - 2018

Dental News Archives 2017

December - 2017
November - 2017
October - 2017
September - 2017
August - 2017
July - 2017
June - 2017
May - 2017
April - 2017
March - 2017
February - 2017
January - 2017

Dental News Archives 2016

December - 2016
November - 2016
October - 2016
September - 2016
August - 2016
July - 2016
June - 2016
May - 2016
April - 2016
March - 2016
February - 2016
January - 2016

Dental News Archives 2015

December - 2015
November - 2015
October - 2015
September - 2015
August - 2015
July - 2015
June - 2015
May - 2015
April - 2015
March - 2015
February - 2015
January - 2015

Dental News Archives 2014

December - 2014
November - 2014
October - 2014
September - 2014
August - 2014
July - 2014
June - 2014
May - 2014
April - 2014
March - 2014
February - 2014
January - 2014

Dental News Archives 2013

December - 2013
November - 2013
October - 2013
September - 2013
August - 2013
July - 2013
June - 2013
May - 2013
April - 2013
March - 2013
February - 2013
January - 2013

Dental News Archives 2012

December - 2012
November - 2012
October - 2012
September - 2012
August - 2012
July - 2012
June - 2012
May - 2012
April - 2012
March - 2012
February - 2012
January - 2012

Dental News Archives 2011

January - 2011
February - 2011
March - 2011
April - 2011
May - 2011
June - 2011
July - 2011
August - 2011
September - 2011
October - 2011
November - 2011
December - 2011

Dental News Archives 2010

December - 2010
November - 2010
October - 2010
September - 2010
August - 2010
July - 2010
June - 2010
May - 2010
April - 2010
March - 2010
February - 2010
January - 2010

Dental News Archives 2009

December - 2009
November - 2009
October - 2009
September - 2009
August - 2009
July - 2009
June - 2009
May - 2009
April - 2009
March - 2009
February - 2009
January - 2009

Dental News Archives 2008

December - 2008
November - 2008
October - 2008
September - 2008
August - 2008
July - 2008
June - 2008
May - 2008
April - 2008
March - 2008
February - 2008
January - 2008

Dental News Archives 2007

December - 2007
November - 2007
October - 2007
September - 2007
August - 2007
July - 2007
June - 2007
May - 2007
April - 2007
March - 2007
February - 2007
January - 2007

Dental News Archives 2006

December - 2006
November - 2006
October - 2006
September - 2006
August - 2006
July - 2006
June - 2006
May - 2006
April - 2006
March - 2006
February - 2006
January - 2006

Dental News Archives 2005

December - 2005
November - 2005
October - 2005
September - 2005
August - 2005
July - 2005
June - 2005
May - 2005

hide toolbar
Would you like weekly updates on our latest offers? If so enter your email :
Quick Remote Dental Support