June 21, 2026 • 36 mins
Special Offer: Get 15% OFF your first FIGS order with code FIGSUK at checkout.
Shop now at https://www.wearfigs.com/
———————————————————————
UK Dentists: Collect your verifiable CPD for this episode here >>> https://courses.dentistswhoinvest.com/smart-money-members-club
———————————————————————
If you think selling a dental practice is just about getting the biggest number, this conversation will challenge that fast. We are joined by Maja Thompson from Henry Schein, who works across practice sales and valuations at scale and has seen the real human cost behind once-in-a-lifetime exits. We talk honestly about the emotional whiplash sellers face, from the long build-up to the moment the deal completes, and the unexpected void that can appear when your identity has been tied to ownership for decades.
We dig into what makes an exit smoother years before you ever go to market: planning purpose, setting realistic expectations, and building a life you actually want after the sale. On the business side, we explore practical drivers of dental practice valuation, including diversifying revenue streams across NHS, private, plan income and more, and reducing how dependent the practice is on the principal’s own clinical output. We also get tactical about measurement: chair utilisation, white space, and why “you master what you measure” is a real edge when you are trying to improve profitability and stability.
Then we demystify dental practice due diligence, including what buyers check, why the timeline can drag on for months, and the hidden deal-breakers that trip sellers up. Property and lease length, building compliance, funding alignment, and the realities of CQC registration transfer all matter, and each can slow completion if you leave it too late.
———————————————————————
Disclaimer: All content on this channel is for education purposes only and does not constitute an investment recommendation or individual financial advice. For that, you should speak to a regulated, independent professional. The value of investments and the income from them can go down as well as up, so you may get back less than you invest. The views expressed on this channel may no longer be current. The information provided is not a personal recommendation for any particular investment. Tax treatment depends on individual circumstances and all tax rules may change in the future. If you are unsure about the suitability of an investment, you should speak to a regulated, independent professional. Investment figures quoted refer to simulated past performance and that past performance is not a reliable indicator of future results/performance.
Listen
Watch
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Dr James (01:15):
Selling at dental practice is notoriously
stressful.
It's a toss-up between gettingthe best number and also not
having the process drag on fortoo long.
But guess what?
No matter where you arewhenever it comes to that
process, whether it's longbefore or imminent, there's
things that you can do today inorder to make that as smooth as
possible.
I have with me today on theDentists Who Invest podcast Mrs.
Maja Thompson.
Maja works for Henry Schein,responsible for over 1 billion
(01:37):
in practice valuations lastyear, and she's been in the
dental industry for 10 years.
She's seen those transactionshappen firsthand that are
normally once in a lifetime forus dentists.
And over the years she's pickedup a shedload of wisdom that
she can share with us today inorder for us to benefit.
So let's get into it.
As ever, you can claim your CPDfor this episode within the
official Dentists Who InvestSmart Money Members Club.
(01:57):
Smart Money Members Club alsoincludes multiple mini courses
and webinar series on financefor dentists, including how to
become as tax efficient aspossible, as well as
understanding investing.
All of this content counts asverifiable CPD, and you can
download your certificates thereand then on completion of each
lesson.
In addition to this, we alsoinclude a whopping 10% discount
(02:18):
on your dental indemnity and a5% discount on lab bills for
dental principals, amongst otherperks and discounts for
members.
Please use the link in thedescription to claim your
verifiable CPD for this episode.
Maja, I know that you do thisstuff day in, day out, but to us
dentists, we only get to see itonce in a lifetime.
(02:40):
Tell me this.
This is the first thing I'dlove to ask.
In your experience and in yourwisdom over the years, what
would you say are the biggestthings that us dentists don't
account for whenever we reachthe practice exit side of things
in terms of our emotions, interms of our outlook in life, in
(03:02):
terms of how this affects us inways that we don't expect?
The the stage is yours, I'm allears.
Maja (03:07):
Yeah.
No, it's it's great, James.
I think that's a greatquestion.
And and uh I think um just kindof looking through the podcasts
that you have done in the past,uh, a lot of them are talking
about the financial value of abusiness and how do you value a
business, how do you plan anexit, you know, what do you do
with the money once you've umonce you've sold, and which is
(03:29):
super important.
I mean, those things are youknow somebody's life lifetime's
work.
But really, I think sometimeswe we neglect the aspect of what
the what it means to theindividual.
And um I I've been in thebusiness of kind of this kind of
brokerage business for for anumber of years, and uh it's so
(03:50):
easy to get taken away with thetransaction itself and forget
that there's a person at theother end.
So I think one of the keythings that's this is usually a
one-time experience.
There are serial entrepreneursand they'll sell businesses and
they are serial buyers, and andyou know, for them that that
will be like bread and butter,and they will get used to the
(04:10):
emotions that go with the rideof selling a business.
But actually, doing it once ina lifetime, I think is a really
big deal because lots ofbusiness owners identify with
that, with that business.
This is their lifetime work,and I think that impact of going
through the process of sale,even though the kind of the exit
(04:32):
might be the you know, thenirvana that they're waiting
for, you know, oh the the thepot at the end of the rainbow.
I think it's not always arainbow, that that kind of the
transition journey.
So it's really important toconsider that even before
selling the business, becausewhat I've found is a lot of
owners find themselves in in thekind of the tsunami of the the
(04:55):
um the transaction and theprocess going on, and they get
towards the end of it andcertainly past the end of it,
and they've sold the businessalmost, and all of a sudden
there's this huge void.
What do I do with my time?
You know, what do I what do Ido when I've kind of left behind
something that I've worked forall my life?
Dr James (05:15):
And you know what?
You know, the more and more Ihave these conversations, and
I'm the I'm used to do this, Istill do do this, but I I I I
definitely did it in the past alot more.
I used to futurize my successso much, and I was like, okay,
well, when I do this or when Iachieve this, I'll be happy.
Then I'm then it's okay for meto be happy.
And any single, I even knowthat's not true because any
(05:36):
every single time I ascend somesort of summit in terms of
success and hit some sort ofheight that I wish to achieve or
achieve something, there'salways the next thing.
There's like this happiness andthen there's a void, right?
And X in a business is going tobe exactly the same.
Maja (05:53):
It is.
It is, but you know, there's athen there's uh uh another
psychological aspect to it,living in the moment.
I think you know kind of a lotof us don't live in the moment
and actually enjoy it.
And the the it's almost likethe success or the rewards are
always in the future.
So, but that that's probablynot what we're talking about
today.
But let's talk about that uhkind of the just the I suppose
(06:16):
the idea of it happening at thetime.
I think it's it's being able inthe same way that you visualize
that success and you kind ofthink what what will success
look like is then visualizingvisualizing what will post sale
look like.
I think it's super important.
Now, interestingly, a lot ofsellers we're talking about,
(06:38):
majority of the sellers will getto a certain age and they will
then sell.
So we're not talking about thetransactions that are you know
happening at a younger age wheresomebody might then buy another
business and kind of flip thatand continue to do it.
We're talking about somebodyrealizing the value of their
lifetime's work.
I think that's also tied inwith a transition in life, you
(07:00):
know.
So talking about retirement,talking about slowing down,
talking about what does thatperiod of life look like?
And a lot of people talk aboutretirement and get, you know,
almost like that place that youwork all your life to get to
that point.
And most people, certainlydentists, will get to that, you
know, the age where they're theycan potentially retire in their
(07:21):
you know, late 40s, early 50s,early 60s, where they have
another potentially 40, 50years, you know, of life to to
get through.
So it's important to thinkabout what does that post-sale
life look like?
And what does, you know, youstill have the ability, you
still have all the knowledge,you have the experience.
Usually you have a lot of time,maybe not the same amount of
(07:42):
energy, but you certainly cancontinue to contribute.
And that's not something that alot of people think about, you
know.
And I I think it's a it's areally important aspect, making
sure that you know they continueto be engaged.
And and I suppose as a society,we give them the opportunity to
be engaged if they want to.
Dr James (08:01):
I think two questions spring to my mind.
I think the first thing, and Idon't know if this is something
we can even quantify today, butin your experience of seeing
these once-in-a-lifetimetransactions fairly frequently,
so being able to observe howthis affects people fairly
frequently, whereas we only getto observe how it affects us in
ourselves, maybe once or a fewtimes in a lifetime.
(08:23):
So, how frequent is this?
How many times do people do youjust sail off into the sunset
in from your from your uhperspective?
And how many times do peoplejust come back from more or feel
a bit listless afterwards?
I don't know if we've got anydata on that so much, but I'm
interested to know what yourthoughts are.
Maja (08:38):
Yeah, I think a big driver of that would be age.
You know, what what age theperson is, and and and actually,
you know, starting up apractice, if you if you've sold
in your 50s, it's quitedifficult to then say, well,
actually, I'm going to go andget involved in another one.
But there's potentiallycapacity to then get involved as
a clinical director somewhereelse or an associate somewhere
(08:59):
else, or you know, just continueto work.
The most interesting thing is,and I think we will kind of get
to potentially that process ofdue diligence and that latter
process of selling a business,is that that process can be
deceivingly long.
So um I think sellers are notprepared for the fact that once
(09:21):
you've agreed the sale, it cantake months to get to the end
point.
It almost feels like, you know,I've agreed the sale, I've
agreed the number.
Actually, you know, it'llhappen fairly quickly.
And it doesn't.
Sometimes it takes months.
Sometimes it can take it cantake two, two years and upwards.
And that's a long time to be inthat exit mode.
Now that process is so involvedand so it can be very draining
(09:46):
that you probably find that whenpeople get to the end of that
process, they are utterlyexhausted.
And I think if they never sawanother document or legal
document, they usually are atthat phase where I just cannot
get wait to get this over theline and done and moved on.
And you can completelyunderstand them.
I mean, it's it's quite a toughprocess.
(10:07):
But once you once you've gotgot past that and you know the
money's landed in the bank andthey're starting to kind of plan
their life, a few months on,people start feeling the void
because you have had the wholelife of working, you've had this
buildup of selling thebusiness, and then you've got to
the point where you have soldand then you know, nothing, or
(10:29):
very little, or much less.
And I think that that takesreparation.
That takes kind of thinkingabout, and I think some of the
things that um I wanted us totalk about today is that the
sense of loss, you know, so youhave had this thing that you
have built up, and then you umyour a lot of your identity is
(10:51):
tied in with being that businessowner and being, you know, the
dentist and you leading the teamand usually the dentist,
leading the team and you know,building something.
And that becomes your everyday.
That's how people address you,that's how people in your
business address you, that's howyour business uh partners
address you, and you then kindof live that life where you're
(11:14):
basically the top dog in yourbusiness.
And all of a sudden, oncethat's finished, you don't have
a team, you usually don't have ateam around you.
You are you are basically yourown individual and your identity
is no longer tied with thebusiness.
So and I think that that takesa little bit of getting used to
it, and it's not somethingpeople think about because you
(11:34):
spend a lot of time working.
Most people spend a lot of timeworking, and most people spend
a lot of time with theiridentity tied around the
business, so that when they getto a point where they're no
longer part of that business,the sense of that identity and
you know, what's my purpose?
Potentially, what's my purposefor the next 40 years is no
longer tied to that business.
(11:56):
And I think peopleunderestimate what that means to
them.
So it's something to bear inmind, you know, while you're
going through the process andthinking about the future.
Dr James (12:07):
The second thing I was gonna ask as well, which you
actually kind of answered whenwe were talking just then, was
what things can we do in thehere and now so that we don't
feel that sense of loss wheneverwe get there.
I think it's just I think a bigpart of that is recognizing
that it's just not going to bethe nirvana necessarily that you
think it's gonna be.
(12:28):
And maybe it's just about notputting so much expectations on
that moment.
And I feel for me, you know,I've been in places before where
for whatever reason there's aton of stuff I want to do, but
for whatever reason it justdoesn't make sense to do it
right now, and I have to waitlike a month, okay?
And it kills me.
I hate it, I hate that feelingof listlessness, I hate that
(12:50):
feeling of not doing something.
Um, and I think that really, ifyou spend a lot of your time,
that's the whole that's that'swhat retirement is in principle,
right?
Okay, or sailing off into thesunset is in principle where we
don't do anything.
So if you spend your whole lifelooking forward to that moment,
and then when you get there,you realize that actually it's
really not you.
You've invested so much mentalenergy and so much of your life
(13:13):
looking forwards to that momentwhen you could have just been
enjoying things so much more inhere and now.
And I'm actually grateful forthe times that happened to me
because it taught me to enjoythe moment here and now, and it
taught me to realize that thejourney is the result, the
journey is the thing that youenjoy, not the end.
Maja (13:28):
Absolutely, absolutely, absolutely, and and uh but
recognizing that that you know,if you're selling the business,
recognizing that that journey isdue to end at some point, you
know, most people I suppose evenif they had the stamina to run
their businesses into the 70s,uh majority of b dentists don't,
(13:51):
or very few dentists do.
It's then deciding what arethose things.
You know, you said you have ayou have kind of a a list of
things that you would want to doin your life.
It's almost like jotting downthe list of things that you
wanted to do, wanted to try, andthen looking at how do I put
those things into practice andwhat do I do with my life
(14:12):
afterwards?
Do I have hobbies that I canspend more time in?
Can I volunteer?
Can I add the knowledge that Ihave, knowledge, experience, you
know?
Um how can I share that andactually still continue to be
engaged, but be mindful of thefact that that's the transition
in your identity for the future.
So recognizing it and thenbeing able to plan the kind of
(14:35):
things that you couldn't dobefore because you were working,
majority of dentist spendmajority of their time with the
fingers in the patient's mouth,managing the team and all of
those issues that that you knowthat that arrive along the way.
Um not having to do thatanymore, but then being able to
utilize those skills and beingmindful that that's coming.
(14:55):
And how can I make the like thebest of it?
It's supposed to be some of thebest, like most freeing times
in life.
You get to retirement, yougenerally don't have as many
kind of personal ties.
You know, kids tend to havegone to university if you have
them, so you have a lot morefreedom to experience those
things.
And if the sale has beensuccessful, you have the funds
(15:17):
to do it as well.
Yeah.
Dr James (15:20):
Maja, I guess the traditional logic is that we
want to just get the biggestnumber as possible on sale offer
dental practice, but that's notalways a good idea.
Am I right in saying that?
UK Dentists, Dennists WhoInvest now has an official
platform where you can learnabout finance and obtain UK
compliant, verifiable CBD at thesame time.
(15:40):
The only platform that existson which you can do both.
The Smart Money Members Clubhas hundreds of hours of mini
courses, webinar series, andlive day recordings on all
things finance slash taxefficiency for UK dentists.
This includes complete courseson how tax works for UK
dentists, finance so that youcan invest and grow your own
(16:00):
money, business so you canimprove your profitability as an
associate or principal, and forthose out there that want it,
there's also a mini course andhow you can responsibly enter
the crypto space using measuredamounts of capital.
I've gathered this content fromthe best of the best I could
find in each respective area sothat you know that this is how
people at the forefront of eachfield advise their clients.
(16:24):
The Smart Money Members Clubalso contains discounts on
common things that UK dentistsneed to pay for on a regular
basis.
This includes a whopping 10%discount on dental indemnity,
the offer to beat your incomeprotection deal no matter what
you're paying, and for theprincipals out there, 5%
discount on lab bills and 10%discount on practice insurance.
(16:44):
These are designed to offerhundreds, if not thousands, in
annual savings.
The purpose of this membersclub is to not only boost your
monthly income but also manageyour outgoings as much as
possible and therefore createmore profit.
To celebrate the launch of theSmart Money Members Club, and
given that the CPD deadline iscoming up soon, I've decided to
offer the first month of thisplatform entirely for free.
(17:05):
This offer will end in thecoming weeks as soon as the
current CPD cycle is up.
To collect your CPD for thispodcast episode using the Smart
Money Members Club, feel free touse the link in the description
of this podcast.
Maja (17:23):
Um depends on how well you do the planning and the kind of
of what you do with you.
I've had accountants here, I'msure that they'll tell you that
a big number is good and thebigger number is even better.
And it's just how you plan uhkind of your I suppose exit in
terms of tax planning andpreparation.
(17:45):
So if that's kind of whereyou're going, I think in terms
of that takes time.
So if you if you're looking toso one of the things that I
would say to somebody, if you'relooking to sell, you start
thinking about that fairly earlyon.
So let's let's kind of play ascenario of somebody who is
looking to sell in their early50s, mid-50s, or something like
(18:08):
that, or late 50s.
Let's say in their 50s.
I would I would suggest thatthey start planning in their in
their early 40s because at thatpoint, kind of having control of
your business, knowing yournumbers, knowing where your
income is coming from.
So you're kind of working fromthe top line, you're then
(18:28):
working, making sure that you'remaximizing the revenue that
you're bringing to yourbusiness.
I talk about a dental businessbeing like a chair.
And if you have a chair that'ssitting is like on one leg and
your all of your income iscoming from the NHS, it's not a
particularly stable chair.
But if you have a chair thathas a number of legs, so you
(18:50):
have private income, you have umpotentially plan income, you
potentially have other sourcesof revenue, aesthetics or or
things like that.
The more revenue streams youhave, the more legs your chair
has and the more stable it is.
So that's really important.
So it's kind of thinking aboutand you can start addressing
(19:10):
that fairly early on.
So that's one of the firstthings.
I would say that that revenueneeds to come from different
places so that it's pr it's apretty stable business.
The other thing it's reallyimportant to consider is are you
the only or the maincontributor in the business?
Because if you're then handingthat over the uh business over
(19:31):
to somebody else, you need tothink about the fact that um the
other person or people have gotto pick up your patients.
And if your patients are reallytied to you, and if majority of
the revenue in the business istied to you as the owner, it's
really quite uh difficult toguarantee for the buyer that
(19:52):
they would be able to pick allof that up or pick all of that
up securely.
And even more, if you look atuh corporate buyers, so
corporate buyers tend to buy thebusiness, you you then end up
being tied in that business fora number of years.
But if majority of the revenueis with you, and let's say you
(20:13):
have a few associates and thosethose associates contribute a
smaller proportion, it's a verybig risk on one individual.
So as you start preparing forthat transition and selling your
business, whether you are doingit to an independent buyer uh
or whether you are selling to acorporate, you need to think
about what's my contribution tothis business and how um how
(20:37):
much of this relies on me.
So then if you start in your40s, you can think about your
revenue streams, you can thinkabout what proportion of uh work
you bring in, and then reducingthe risk for somebody else in
the future.
And starting like that, if youthink if you're reducing your
responsibility within thebusiness, you could then be
(20:59):
looking at when I exit thisbusiness, what could I be doing
in this time that I am reducingmy responsibilities now by
handing those over to somebodyelse who will be for either
fulfilling the NHS contract orseeing my private patients or or
what you know, whatever thatmight be.
So you are reducing the risk inthe current business, but
you're also future-proofing kindof that thought process about
(21:22):
what do I do with my time once Iretire or once I exit.
Dr James (21:27):
Interesting.
And I'm gonna guess the actualsales process itself, as in the
negotiation, is gonna be anemotional whirlwind, at least
normally for most people.
Maja (21:38):
Yeah.
It can be.
Yeah, no, no, no, it can be.
It definitely can be becauseum, I suppose let's talk about
that going back to that timebetween like your your foot, so
you're in your 40s, you arethinking about this lifetime
work, you are getting thatincome to come from different
avenues, you have a stable chairin your business, uh, you're
(22:02):
bringing in associates, and youwill then get to a place where
you know you'll kind of lookaround, there'll be your
generation that are sellingtheir business, and then you'll
start comparing your business totheir business, and they'll say
they also they have sold forthis amount, or they've sold at
this multiple or that multiple.
And in your mind, people tendto build up what's this number
(22:24):
that I'm working towards.
And in most cases, you know,dentists are are aware of what
approximately their number mightbe.
But uh I suppose the mostimportant thing is like if you
if you are planning with thatnumber in mind, get get a
valuation.
I think that's a great pointplace to start because the
(22:45):
valuation process itself willtake you through the details of
you know your income, yourcosts, and it'll give you that
Ibidar operating profit uhfigure.
And then you'll be able to seekind of what your business is
worth.
Now it's really important to Isuppose um be realistic in that
(23:10):
process.
So and listen to the listen tokind of people that that.
Go through it all the time.
You know, so we as a business,we value about 400 practices a
year.
And over the last, I think, 15years, we've valued a lot of
businesses.
So we have background data onhow the businesses' business
(23:31):
valuations vary.
So our team will be able toadvise and say, this is what
we're seeing in the market.
And this is how it could beaffecting your business.
And, you know, depending onwhere you're in the country,
it'll also affect, you know, thevalue of your business.
So it's being, I suppose,approaching it realistically.
You know, if you get the upsideand your business sells for
(23:52):
more, great.
But don't peg your expectationsto a figure because that can
just lead to disappointment.
And um so that's reallyimportant, kind of keep it
keeping it real, you know, beingrealistic of where where you
can get to.
But also um that process of umthe closer you are to your
(24:16):
business in terms of numbers,and um, I suppose understanding
how well your business isperforming, the more informed
you will be of the kind ofthings that you are doing to the
business and how that'saffecting the output.
So we talked about you knowthat stability of a chair,
knowing what percentage of yourrevenue comes from NHS, what
(24:37):
percentage of your revenue comesfrom private, how profitable
those individuals' revenuestreams are.
Um, looking at white space inyour practice, you know, how
utilized are your chairs?
Are they, you know, is there abum on the seat whenever the
seat is free?
Really important.
What's the value of the dentalhour on those chairs is really
(25:01):
important.
And those are some of the likebig levers that you can pull
within your business to thenunderstand how profitable it is
and ultimately have thatreflects on the value of the
business.
So knowing your numbers, sohaving I guess Henry Schein
business.
So Henry Schein One, softwareof excellence, dentally have
(25:23):
really good reporting tools anduh background reports where you
can take this data out.
And they have consultants thatdo it for free and help you um
decipher kind of these, theycall it magic numbers, but like
key levers in your business andhow well you're performing
against other businesses.
I think they have like 70% ofthe market covered with their
(25:46):
practice management system.
So, as a pool of data on kindof how businesses are
performing, you can thenbenchmark your practice against
those other practices and say,well, actually, you know, I have
a, you know, I have 50% ofwhite space.
Some of the best performingpractices have 90% occupancy.
You know, I'm missing 40% ofoccupancy on my chairs.
(26:09):
What can I do to fill those?
So things like that.
Really important to know yournumbers so that that can lead to
knowing your valuation.
Long-winded answer.
Dr James (26:19):
No, listen, the more value, the better.
And there's a saying that Ilove, I'm sure I've said this a
hundred times in the podcast,but I'm going to say it again.
You master what you measure.
Every time I've bothered tolook into the numbers of how
something works, you you know,it's very hard to figure out
sometimes what to do next.
And if you're in that place, Ibet if you look at the numbers,
(26:40):
they'll help you significantly,or there'll probably be an
answer staring right back atyou.
Because the number of that's ifI ever am confused about where
I should go or what I should do,it's almost always a data
problem, I think personally.
It's really helped me out.
And practice, dental practicesare no exception.
All businesses operate likethat, so it's worth saying
another podcast today.
On the topic of numbers, duediligence.
Let's talk that because thatconfuses the heck out of
(27:02):
dentists.
Maja (27:03):
Yes.
Okay, uh, again, I was justgoing to say on the numbers, one
of the scary things about thenumbers is that you start
scratching if you if that's notyour bag, if you are not the
person that's like on top ofyour numbers, starting to
scratch the surface of that canbe really scary.
So start early.
(27:23):
We're talking about 40s, you'repreparing to sell in your like
late 50s.
If you start in your 40s andjust get over the kind of
anxiety of uh being knowing yournumbers well, it will serve you
so well because it can only getbetter, because otherwise
you're driving blind.
So that's the on the on thepoint of numbers.
I think it's super important toknow them.
And you're right, it's alwaysin the data.
(27:45):
Um, so let's say talking aboutdue diligence.
So you are on the journey tosell your business, you've got
the right valuation, you'rereally happy with with where
that's going.
Um, you then get to a pointwhere you have negotiated with
the buyer, they've given you anoffer, you have agreed, you're
both happy, they're getting theright kind of business.
(28:07):
You are you are selling yourbusiness for the number that you
want.
Now, the most important thingis if you remember, I said um
these things take time.
And the process of uh once thebuyer and the seller have agreed
to buy the business, sell thebusiness, um, they come into uh
into an agreement.
And it's an agreement that's abasic agreement that the buyer
(28:30):
agrees to you know to buy thisbusiness at this value and the
seller agrees to do the same.
They are always contingent onthe due diligence process being
carried out.
So at this point, the buyer istaking taking the seller on face
value that the stuff that's inthe valuation is exactly as it
is.
So they are making their offerbased on the information that
(28:54):
they have at that point.
Now, what the due diligenceprocess does, it allows you to
kind of scratch the surface ofthat business, for the buyer to
scratch the surface of thebusiness, and then basically
have a look if the if thenumbers, the way that they have
been presented, if the team, ifthe property stack up in the way
(29:14):
that they had imagined, andthat's reflected in their offer.
And the due diligence processcovers kind of main areas.
So most people think about duediligence basically being based
around finance and finance andand kind of the legal side.
And in theory, they are.
So finance makes a big part ofit.
(29:34):
It's a it's a uh quite anin-depth dive into the profit
and loss, into the kind ofthings that the company owns,
into the um patient numberscoming through, patient lists,
NHS contract.
So it's it's a it feels quiteinvasive.
You know, somebody's having alike taking a big looking glass
(29:55):
and having a look into yourbusiness.
So that's a big part of it.
Then you have the legal aspect,so the buying agreements,
potentially if you're selling toa corporate and associate
agreement.
So that takes time, which isbasically kind of uh, I suppose
tying up the legal side oftransferring a business to
somebody else.
So that's the legal side.
(30:16):
And the thing that gets a lotof the there are two other
really big areas that can end upbeing really troublesome, and
they need to be addressed veryearly on almost in the sales
process.
So if somebody is looking atselling their business, the
property, so your business is anentity that sits in a building.
(30:39):
Now that building is eitherowned by you as the dentist
owning the bit owning thebuilding where your business is
sitting, or it can be owned byanother landlord or it can be
owned by your SIP, but thebusiness is a different entity
to the property that it'ssitting in.
So if you think about it, ifyou are buying a business that's
(31:01):
sitting in a property, what youwant to know as a buyer is that
that business will be able tocontinue to operate in that
property for a number of years.
So as a seller, when you cometo sell the business, what you
really need to think about is doI have the permission to
continue to operate my businessfrom these premises, you know,
(31:25):
for the long term?
That's pretty simple.
If you own the property, youknow, you're the landlord, you
can then decide either I'll sellthe property at the same time,
potentially to that buyer, or Iwill retain the property and
continue to receive income fromit.
But uh, if your landlord is athird party or somebody else
owns the building, there are afew kind of legal requirements
(31:48):
with regards to the lease.
Uh, so to make sure that youcan continue to have that lease
for a number of years.
So if your lease is coming upto renewal within the next one,
two, three years, it's superimportant that you extend that
lease if it's a third-partylandlord.
Because you might get to apoint where you want to sell
your business and actually thebuyer goes, Well, how do I know
(32:10):
that I'll be able to operate?
You know, I buy this businessand the landlord won't extend
the lease for me.
So it's really important tohave a long lease, super
important.
And that's something that tripsup a lot of people.
And property matters, legalmatters, in my experience, don't
happen very quickly.
So if you're thinking thingswill happen quickly, they
generally don't.
So tackle that early.
The property is reallyimportant to be tackled early.
(32:32):
And alongside with theproperty, you have a number of
other things that are within theproperty, health and safety,
fire, um CQC and regulations.
You got, is there asbestos inthe building?
Um, is the lease if you do havea lease, is it in good repair?
So does it will the buildingneed other adjustments before
(32:54):
somebody can take the lease on?
So there are a number of otherthings that you need to consider
that are tied to the property.
Um, so you need to addressthose very early on because they
are a big part of the duediligence process.
And one of those things thatthat takes a really long time.
The other thing that'simportant, obviously, how you're
funding this.
So I'm sure that there werepeople on on the on the podcast
(33:17):
that were talking about funding,would know a lot more kind of
in detail funding um uh kind ofaspects of buying a business.
But it's really important thatyou secure funding early enough,
that you have the right levelof deposit, that um the
valuation that the bank carriesout aligns with the valuation
that you might have uh that theoffer is based on.
(33:40):
So it's it's really importantthat those things are aligned.
So and making sure thatobviously you can you can buy
the business and you can buy theproperty if you if you decided
to buy the property.
And the last one, the reallybig one, is the CQC.
So CQC, huge in our industry,obviously um regulate uh the way
(34:01):
that practices operate.
But that process oftransferring the CQC
registration from one owner tothe other owner can be really
complicated.
And CQC have recently had um alot of changes kind of at that
top level.
They launched the portal, theportal hasn't worked uh that
that well.
Uh so they're back to paperapplications.
And the process that wouldusually take, say, three to four
(34:25):
months, can now take sixmonths, seven months.
So this is from the moment whenthe sale is agreed.
So you're kind of thinking,actually, I've sold.
I now have four, six, eightmonths for the process to be,
you know, submitting anapplication to CQC, getting all
of the kind of um things inplace so that the application
(34:46):
can be approved.
It can take time.
So it's being really preparedand making sure that you have
the right advisors around youfor that process uh that takes
kind of that significant amountof time to happen.
And being kind of, you know, ifyou're prepared for it, if you
know it's coming, it's mucheasier to deal with than when
(35:06):
you are in the midst of it andkind of thinking, is this ever
going to end?
You know, I am in this processand these people are asking me
for stuff.
Um it's really important to besurrounded by people who are
guiding you on that journey.
And there are a number ofreally experienced solicitors,
really experienced brokers, umaccountants that understand the
(35:28):
dental industry and theintricacies of the dental
industry that can hold your handthrough that process.
Um, so that, you know, ifyou're prepared, you kind of
know what's coming, and you areaware of the fact that you have
to be pushing and you have to beengaged as a seller, that this
process is far less painful thanif you just go in with a
(35:49):
blindfold and go, I know whatI'm going to get.
It's just I just don't knowwhat is going to happen because
this process is killing me.
Selling at dental practice is notoriously
stressful.
It's a toss-up between gettingthe best number and also not
having the process drag on fortoo long.
But guess what?
No matter where you arewhenever it comes to that
process, whether it's longbefore or imminent, there's
things that you can do today inorder to make that as smooth as
possible.
I have with me today on theDentists Who Invest podcast Mrs.
Maja Thompson.
Maja works for Henry Schein,responsible for over 1 billion
(01:37):
in practice valuations lastyear, and she's been in the
dental industry for 10 years.
She's seen those transactionshappen firsthand that are
normally once in a lifetime forus dentists.
And over the years she's pickedup a shedload of wisdom that
she can share with us today inorder for us to benefit.
So let's get into it.
As ever, you can claim your CPDfor this episode within the
official Dentists Who InvestSmart Money Members Club.
(01:57):
Smart Money Members Club alsoincludes multiple mini courses
and webinar series on financefor dentists, including how to
become as tax efficient aspossible, as well as
understanding investing.
All of this content counts asverifiable CPD, and you can
download your certificates thereand then on completion of each
lesson.
In addition to this, we alsoinclude a whopping 10% discount
(02:18):
on your dental indemnity and a5% discount on lab bills for
dental principals, amongst otherperks and discounts for
members.
Please use the link in thedescription to claim your
verifiable CPD for this episode.
Maja, I know that you do thisstuff day in, day out, but to us
dentists, we only get to see itonce in a lifetime.
(02:40):
Tell me this.
This is the first thing I'dlove to ask.
In your experience and in yourwisdom over the years, what
would you say are the biggestthings that us dentists don't
account for whenever we reachthe practice exit side of things
in terms of our emotions, interms of our outlook in life, in
(03:02):
terms of how this affects us inways that we don't expect?
The the stage is yours, I'm allears.
Maja (03:07):
Yeah.
No, it's it's great, James.
I think that's a greatquestion.
And and uh I think um just kindof looking through the podcasts
that you have done in the past,uh, a lot of them are talking
about the financial value of abusiness and how do you value a
business, how do you plan anexit, you know, what do you do
with the money once you've umonce you've sold, and which is
(03:29):
super important.
I mean, those things are youknow somebody's life lifetime's
work.
But really, I think sometimeswe we neglect the aspect of what
the what it means to theindividual.
And um I I've been in thebusiness of kind of this kind of
brokerage business for for anumber of years, and uh it's so
(03:50):
easy to get taken away with thetransaction itself and forget
that there's a person at theother end.
So I think one of the keythings that's this is usually a
one-time experience.
There are serial entrepreneursand they'll sell businesses and
they are serial buyers, and andyou know, for them that that
will be like bread and butter,and they will get used to the
(04:10):
emotions that go with the rideof selling a business.
But actually, doing it once ina lifetime, I think is a really
big deal because lots ofbusiness owners identify with
that, with that business.
This is their lifetime work,and I think that impact of going
through the process of sale,even though the kind of the exit
(04:32):
might be the you know, thenirvana that they're waiting
for, you know, oh the the thepot at the end of the rainbow.
I think it's not always arainbow, that that kind of the
transition journey.
So it's really important toconsider that even before
selling the business, becausewhat I've found is a lot of
owners find themselves in in thekind of the tsunami of the the
(04:55):
um the transaction and theprocess going on, and they get
towards the end of it andcertainly past the end of it,
and they've sold the businessalmost, and all of a sudden
there's this huge void.
What do I do with my time?
You know, what do I what do Ido when I've kind of left behind
something that I've worked forall my life?
Dr James (05:15):
And you know what?
You know, the more and more Ihave these conversations, and
I'm the I'm used to do this, Istill do do this, but I I I I
definitely did it in the past alot more.
I used to futurize my successso much, and I was like, okay,
well, when I do this or when Iachieve this, I'll be happy.
Then I'm then it's okay for meto be happy.
And any single, I even knowthat's not true because any
(05:36):
every single time I ascend somesort of summit in terms of
success and hit some sort ofheight that I wish to achieve or
achieve something, there'salways the next thing.
There's like this happiness andthen there's a void, right?
And X in a business is going tobe exactly the same.
Maja (05:53):
It is.
It is, but you know, there's athen there's uh uh another
psychological aspect to it,living in the moment.
I think you know kind of a lotof us don't live in the moment
and actually enjoy it.
And the the it's almost likethe success or the rewards are
always in the future.
So, but that that's probablynot what we're talking about
today.
But let's talk about that uhkind of the just the I suppose
(06:16):
the idea of it happening at thetime.
I think it's it's being able inthe same way that you visualize
that success and you kind ofthink what what will success
look like is then visualizingvisualizing what will post sale
look like.
I think it's super important.
Now, interestingly, a lot ofsellers we're talking about,
(06:38):
majority of the sellers will getto a certain age and they will
then sell.
So we're not talking about thetransactions that are you know
happening at a younger age wheresomebody might then buy another
business and kind of flip thatand continue to do it.
We're talking about somebodyrealizing the value of their
lifetime's work.
I think that's also tied inwith a transition in life, you
(07:00):
know.
So talking about retirement,talking about slowing down,
talking about what does thatperiod of life look like?
And a lot of people talk aboutretirement and get, you know,
almost like that place that youwork all your life to get to
that point.
And most people, certainlydentists, will get to that, you
know, the age where they're theycan potentially retire in their
(07:21):
you know, late 40s, early 50s,early 60s, where they have
another potentially 40, 50years, you know, of life to to
get through.
So it's important to thinkabout what does that post-sale
life look like?
And what does, you know, youstill have the ability, you
still have all the knowledge,you have the experience.
Usually you have a lot of time,maybe not the same amount of
(07:42):
energy, but you certainly cancontinue to contribute.
And that's not something that alot of people think about, you
know.
And I I think it's a it's areally important aspect, making
sure that you know they continueto be engaged.
And and I suppose as a society,we give them the opportunity to
be engaged if they want to.
Dr James (08:01):
I think two questions spring to my mind.
I think the first thing, and Idon't know if this is something
we can even quantify today, butin your experience of seeing
these once-in-a-lifetimetransactions fairly frequently,
so being able to observe howthis affects people fairly
frequently, whereas we only getto observe how it affects us in
ourselves, maybe once or a fewtimes in a lifetime.
(08:23):
So, how frequent is this?
How many times do people do youjust sail off into the sunset
in from your from your uhperspective?
And how many times do peoplejust come back from more or feel
a bit listless afterwards?
I don't know if we've got anydata on that so much, but I'm
interested to know what yourthoughts are.
Maja (08:38):
Yeah, I think a big driver of that would be age.
You know, what what age theperson is, and and and actually,
you know, starting up apractice, if you if you've sold
in your 50s, it's quitedifficult to then say, well,
actually, I'm going to go andget involved in another one.
But there's potentiallycapacity to then get involved as
a clinical director somewhereelse or an associate somewhere
(08:59):
else, or you know, just continueto work.
The most interesting thing is,and I think we will kind of get
to potentially that process ofdue diligence and that latter
process of selling a business,is that that process can be
deceivingly long.
So um I think sellers are notprepared for the fact that once
(09:21):
you've agreed the sale, it cantake months to get to the end
point.
It almost feels like, you know,I've agreed the sale, I've
agreed the number.
Actually, you know, it'llhappen fairly quickly.
And it doesn't.
Sometimes it takes months.
Sometimes it can take it cantake two, two years and upwards.
And that's a long time to be inthat exit mode.
Now that process is so involvedand so it can be very draining
(09:46):
that you probably find that whenpeople get to the end of that
process, they are utterlyexhausted.
And I think if they never sawanother document or legal
document, they usually are atthat phase where I just cannot
get wait to get this over theline and done and moved on.
And you can completelyunderstand them.
I mean, it's it's quite a toughprocess.
(10:07):
But once you once you've gotgot past that and you know the
money's landed in the bank andthey're starting to kind of plan
their life, a few months on,people start feeling the void
because you have had the wholelife of working, you've had this
buildup of selling thebusiness, and then you've got to
the point where you have soldand then you know, nothing, or
(10:29):
very little, or much less.
And I think that that takesreparation.
That takes kind of thinkingabout, and I think some of the
things that um I wanted us totalk about today is that the
sense of loss, you know, so youhave had this thing that you
have built up, and then you umyour a lot of your identity is
(10:51):
tied in with being that businessowner and being, you know, the
dentist and you leading the teamand usually the dentist,
leading the team and you know,building something.
And that becomes your everyday.
That's how people address you,that's how people in your
business address you, that's howyour business uh partners
address you, and you then kindof live that life where you're
(11:14):
basically the top dog in yourbusiness.
And all of a sudden, oncethat's finished, you don't have
a team, you usually don't have ateam around you.
You are you are basically yourown individual and your identity
is no longer tied with thebusiness.
So and I think that that takesa little bit of getting used to
it, and it's not somethingpeople think about because you
(11:34):
spend a lot of time working.
Most people spend a lot of timeworking, and most people spend
a lot of time with theiridentity tied around the
business, so that when they getto a point where they're no
longer part of that business,the sense of that identity and
you know, what's my purpose?
Potentially, what's my purposefor the next 40 years is no
longer tied to that business.
(11:56):
And I think peopleunderestimate what that means to
them.
So it's something to bear inmind, you know, while you're
going through the process andthinking about the future.
Dr James (12:07):
The second thing I was gonna ask as well, which you
actually kind of answered whenwe were talking just then, was
what things can we do in thehere and now so that we don't
feel that sense of loss wheneverwe get there.
I think it's just I think a bigpart of that is recognizing
that it's just not going to bethe nirvana necessarily that you
think it's gonna be.
(12:28):
And maybe it's just about notputting so much expectations on
that moment.
And I feel for me, you know,I've been in places before where
for whatever reason there's aton of stuff I want to do, but
for whatever reason it justdoesn't make sense to do it
right now, and I have to waitlike a month, okay?
And it kills me.
I hate it, I hate that feelingof listlessness, I hate that
(12:50):
feeling of not doing something.
Um, and I think that really, ifyou spend a lot of your time,
that's the whole that's that'swhat retirement is in principle,
right?
Okay, or sailing off into thesunset is in principle where we
don't do anything.
So if you spend your whole lifelooking forward to that moment,
and then when you get there,you realize that actually it's
really not you.
You've invested so much mentalenergy and so much of your life
(13:13):
looking forwards to that momentwhen you could have just been
enjoying things so much more inhere and now.
And I'm actually grateful forthe times that happened to me
because it taught me to enjoythe moment here and now, and it
taught me to realize that thejourney is the result, the
journey is the thing that youenjoy, not the end.
Maja (13:28):
Absolutely, absolutely, absolutely, and and uh but
recognizing that that you know,if you're selling the business,
recognizing that that journey isdue to end at some point, you
know, most people I suppose evenif they had the stamina to run
their businesses into the 70s,uh majority of b dentists don't,
(13:51):
or very few dentists do.
It's then deciding what arethose things.
You know, you said you have ayou have kind of a a list of
things that you would want to doin your life.
It's almost like jotting downthe list of things that you
wanted to do, wanted to try, andthen looking at how do I put
those things into practice andwhat do I do with my life
(14:12):
afterwards?
Do I have hobbies that I canspend more time in?
Can I volunteer?
Can I add the knowledge that Ihave, knowledge, experience, you
know?
Um how can I share that andactually still continue to be
engaged, but be mindful of thefact that that's the transition
in your identity for the future.
So recognizing it and thenbeing able to plan the kind of
(14:35):
things that you couldn't dobefore because you were working,
majority of dentist spendmajority of their time with the
fingers in the patient's mouth,managing the team and all of
those issues that that you knowthat that arrive along the way.
Um not having to do thatanymore, but then being able to
utilize those skills and beingmindful that that's coming.
(14:55):
And how can I make the like thebest of it?
It's supposed to be some of thebest, like most freeing times
in life.
You get to retirement, yougenerally don't have as many
kind of personal ties.
You know, kids tend to havegone to university if you have
them, so you have a lot morefreedom to experience those
things.
And if the sale has beensuccessful, you have the funds
(15:17):
to do it as well.
Yeah.
Dr James (15:20):
Maja, I guess the traditional logic is that we
want to just get the biggestnumber as possible on sale offer
dental practice, but that's notalways a good idea.
Am I right in saying that?
UK Dentists, Dennists WhoInvest now has an official
platform where you can learnabout finance and obtain UK
compliant, verifiable CBD at thesame time.
(15:40):
The only platform that existson which you can do both.
The Smart Money Members Clubhas hundreds of hours of mini
courses, webinar series, andlive day recordings on all
things finance slash taxefficiency for UK dentists.
This includes complete courseson how tax works for UK
dentists, finance so that youcan invest and grow your own
(16:00):
money, business so you canimprove your profitability as an
associate or principal, and forthose out there that want it,
there's also a mini course andhow you can responsibly enter
the crypto space using measuredamounts of capital.
I've gathered this content fromthe best of the best I could
find in each respective area sothat you know that this is how
people at the forefront of eachfield advise their clients.
(16:24):
The Smart Money Members Clubalso contains discounts on
common things that UK dentistsneed to pay for on a regular
basis.
This includes a whopping 10%discount on dental indemnity,
the offer to beat your incomeprotection deal no matter what
you're paying, and for theprincipals out there, 5%
discount on lab bills and 10%discount on practice insurance.
(16:44):
These are designed to offerhundreds, if not thousands, in
annual savings.
The purpose of this membersclub is to not only boost your
monthly income but also manageyour outgoings as much as
possible and therefore createmore profit.
To celebrate the launch of theSmart Money Members Club, and
given that the CPD deadline iscoming up soon, I've decided to
offer the first month of thisplatform entirely for free.
(17:05):
This offer will end in thecoming weeks as soon as the
current CPD cycle is up.
To collect your CPD for thispodcast episode using the Smart
Money Members Club, feel free touse the link in the description
of this podcast.
Maja (17:23):
Um depends on how well you do the planning and the kind of
of what you do with you.
I've had accountants here, I'msure that they'll tell you that
a big number is good and thebigger number is even better.
And it's just how you plan uhkind of your I suppose exit in
terms of tax planning andpreparation.
(17:45):
So if that's kind of whereyou're going, I think in terms
of that takes time.
So if you if you're looking toso one of the things that I
would say to somebody, if you'relooking to sell, you start
thinking about that fairly earlyon.
So let's let's kind of play ascenario of somebody who is
looking to sell in their early50s, mid-50s, or something like
(18:08):
that, or late 50s.
Let's say in their 50s.
I would I would suggest thatthey start planning in their in
their early 40s because at thatpoint, kind of having control of
your business, knowing yournumbers, knowing where your
income is coming from.
So you're kind of working fromthe top line, you're then
(18:28):
working, making sure that you'remaximizing the revenue that
you're bringing to yourbusiness.
I talk about a dental businessbeing like a chair.
And if you have a chair that'ssitting is like on one leg and
your all of your income iscoming from the NHS, it's not a
particularly stable chair.
But if you have a chair thathas a number of legs, so you
(18:50):
have private income, you have umpotentially plan income, you
potentially have other sourcesof revenue, aesthetics or or
things like that.
The more revenue streams youhave, the more legs your chair
has and the more stable it is.
So that's really important.
So it's kind of thinking aboutand you can start addressing
(19:10):
that fairly early on.
So that's one of the firstthings.
I would say that that revenueneeds to come from different
places so that it's pr it's apretty stable business.
The other thing it's reallyimportant to consider is are you
the only or the maincontributor in the business?
Because if you're then handingthat over the uh business over
(19:31):
to somebody else, you need tothink about the fact that um the
other person or people have gotto pick up your patients.
And if your patients are reallytied to you, and if majority of
the revenue in the business istied to you as the owner, it's
really quite uh difficult toguarantee for the buyer that
(19:52):
they would be able to pick allof that up or pick all of that
up securely.
And even more, if you look atuh corporate buyers, so
corporate buyers tend to buy thebusiness, you you then end up
being tied in that business fora number of years.
But if majority of the revenueis with you, and let's say you
(20:13):
have a few associates and thosethose associates contribute a
smaller proportion, it's a verybig risk on one individual.
So as you start preparing forthat transition and selling your
business, whether you are doingit to an independent buyer uh
or whether you are selling to acorporate, you need to think
about what's my contribution tothis business and how um how
(20:37):
much of this relies on me.
So then if you start in your40s, you can think about your
revenue streams, you can thinkabout what proportion of uh work
you bring in, and then reducingthe risk for somebody else in
the future.
And starting like that, if youthink if you're reducing your
responsibility within thebusiness, you could then be
(20:59):
looking at when I exit thisbusiness, what could I be doing
in this time that I am reducingmy responsibilities now by
handing those over to somebodyelse who will be for either
fulfilling the NHS contract orseeing my private patients or or
what you know, whatever thatmight be.
So you are reducing the risk inthe current business, but
you're also future-proofing kindof that thought process about
(21:22):
what do I do with my time once Iretire or once I exit.
Dr James (21:27):
Interesting.
And I'm gonna guess the actualsales process itself, as in the
negotiation, is gonna be anemotional whirlwind, at least
normally for most people.
Maja (21:38):
Yeah.
It can be.
Yeah, no, no, no, it can be.
It definitely can be becauseum, I suppose let's talk about
that going back to that timebetween like your your foot, so
you're in your 40s, you arethinking about this lifetime
work, you are getting thatincome to come from different
avenues, you have a stable chairin your business, uh, you're
(22:02):
bringing in associates, and youwill then get to a place where
you know you'll kind of lookaround, there'll be your
generation that are sellingtheir business, and then you'll
start comparing your business totheir business, and they'll say
they also they have sold forthis amount, or they've sold at
this multiple or that multiple.
And in your mind, people tendto build up what's this number
(22:24):
that I'm working towards.
And in most cases, you know,dentists are are aware of what
approximately their number mightbe.
But uh I suppose the mostimportant thing is like if you
if you are planning with thatnumber in mind, get get a
valuation.
I think that's a great pointplace to start because the
(22:45):
valuation process itself willtake you through the details of
you know your income, yourcosts, and it'll give you that
Ibidar operating profit uhfigure.
And then you'll be able to seekind of what your business is
worth.
Now it's really important to Isuppose um be realistic in that
(23:10):
process.
So and listen to the listen tokind of people that that.
Go through it all the time.
You know, so we as a business,we value about 400 practices a
year.
And over the last, I think, 15years, we've valued a lot of
businesses.
So we have background data onhow the businesses' business
(23:31):
valuations vary.
So our team will be able toadvise and say, this is what
we're seeing in the market.
And this is how it could beaffecting your business.
And, you know, depending onwhere you're in the country,
it'll also affect, you know, thevalue of your business.
So it's being, I suppose,approaching it realistically.
You know, if you get the upsideand your business sells for
(23:52):
more, great.
But don't peg your expectationsto a figure because that can
just lead to disappointment.
And um so that's reallyimportant, kind of keep it
keeping it real, you know, beingrealistic of where where you
can get to.
But also um that process of umthe closer you are to your
(24:16):
business in terms of numbers,and um, I suppose understanding
how well your business isperforming, the more informed
you will be of the kind ofthings that you are doing to the
business and how that'saffecting the output.
So we talked about you knowthat stability of a chair,
knowing what percentage of yourrevenue comes from NHS, what
(24:37):
percentage of your revenue comesfrom private, how profitable
those individuals' revenuestreams are.
Um, looking at white space inyour practice, you know, how
utilized are your chairs?
Are they, you know, is there abum on the seat whenever the
seat is free?
Really important.
What's the value of the dentalhour on those chairs is really
(25:01):
important.
And those are some of the likebig levers that you can pull
within your business to thenunderstand how profitable it is
and ultimately have thatreflects on the value of the
business.
So knowing your numbers, sohaving I guess Henry Schein
business.
So Henry Schein One, softwareof excellence, dentally have
(25:23):
really good reporting tools anduh background reports where you
can take this data out.
And they have consultants thatdo it for free and help you um
decipher kind of these, theycall it magic numbers, but like
key levers in your business andhow well you're performing
against other businesses.
I think they have like 70% ofthe market covered with their
(25:46):
practice management system.
So, as a pool of data on kindof how businesses are
performing, you can thenbenchmark your practice against
those other practices and say,well, actually, you know, I have
a, you know, I have 50% ofwhite space.
Some of the best performingpractices have 90% occupancy.
You know, I'm missing 40% ofoccupancy on my chairs.
(26:09):
What can I do to fill those?
So things like that.
Really important to know yournumbers so that that can lead to
knowing your valuation.
Long-winded answer.
Dr James (26:19):
No, listen, the more value, the better.
And there's a saying that Ilove, I'm sure I've said this a
hundred times in the podcast,but I'm going to say it again.
You master what you measure.
Every time I've bothered tolook into the numbers of how
something works, you you know,it's very hard to figure out
sometimes what to do next.
And if you're in that place, Ibet if you look at the numbers,
(26:40):
they'll help you significantly,or there'll probably be an
answer staring right back atyou.
Because the number of that's ifI ever am confused about where
I should go or what I should do,it's almost always a data
problem, I think personally.
It's really helped me out.
And practice, dental practicesare no exception.
All businesses operate likethat, so it's worth saying
another podcast today.
On the topic of numbers, duediligence.
Let's talk that because thatconfuses the heck out of
(27:02):
dentists.
Maja (27:03):
Yes.
Okay, uh, again, I was justgoing to say on the numbers, one
of the scary things about thenumbers is that you start
scratching if you if that's notyour bag, if you are not the
person that's like on top ofyour numbers, starting to
scratch the surface of that canbe really scary.
So start early.
(27:23):
We're talking about 40s, you'repreparing to sell in your like
late 50s.
If you start in your 40s andjust get over the kind of
anxiety of uh being knowing yournumbers well, it will serve you
so well because it can only getbetter, because otherwise
you're driving blind.
So that's the on the on thepoint of numbers.
I think it's super important toknow them.
And you're right, it's alwaysin the data.
(27:45):
Um, so let's say talking aboutdue diligence.
So you are on the journey tosell your business, you've got
the right valuation, you'rereally happy with with where
that's going.
Um, you then get to a pointwhere you have negotiated with
the buyer, they've given you anoffer, you have agreed, you're
both happy, they're getting theright kind of business.
(28:07):
You are you are selling yourbusiness for the number that you
want.
Now, the most important thingis if you remember, I said um
these things take time.
And the process of uh once thebuyer and the seller have agreed
to buy the business, sell thebusiness, um, they come into uh
into an agreement.
And it's an agreement that's abasic agreement that the buyer
(28:30):
agrees to you know to buy thisbusiness at this value and the
seller agrees to do the same.
They are always contingent onthe due diligence process being
carried out.
So at this point, the buyer istaking taking the seller on face
value that the stuff that's inthe valuation is exactly as it
is.
So they are making their offerbased on the information that
(28:54):
they have at that point.
Now, what the due diligenceprocess does, it allows you to
kind of scratch the surface ofthat business, for the buyer to
scratch the surface of thebusiness, and then basically
have a look if the if thenumbers, the way that they have
been presented, if the team, ifthe property stack up in the way
(29:14):
that they had imagined, andthat's reflected in their offer.
And the due diligence processcovers kind of main areas.
So most people think about duediligence basically being based
around finance and finance andand kind of the legal side.
And in theory, they are.
So finance makes a big part ofit.
(29:34):
It's a it's a uh quite anin-depth dive into the profit
and loss, into the kind ofthings that the company owns,
into the um patient numberscoming through, patient lists,
NHS contract.
So it's it's a it feels quiteinvasive.
You know, somebody's having alike taking a big looking glass
(29:55):
and having a look into yourbusiness.
So that's a big part of it.
Then you have the legal aspect,so the buying agreements,
potentially if you're selling toa corporate and associate
agreement.
So that takes time, which isbasically kind of uh, I suppose
tying up the legal side oftransferring a business to
somebody else.
So that's the legal side.
(30:16):
And the thing that gets a lotof the there are two other
really big areas that can end upbeing really troublesome, and
they need to be addressed veryearly on almost in the sales
process.
So if somebody is looking atselling their business, the
property, so your business is anentity that sits in a building.
(30:39):
Now that building is eitherowned by you as the dentist
owning the bit owning thebuilding where your business is
sitting, or it can be owned byanother landlord or it can be
owned by your SIP, but thebusiness is a different entity
to the property that it'ssitting in.
So if you think about it, ifyou are buying a business that's
(31:01):
sitting in a property, what youwant to know as a buyer is that
that business will be able tocontinue to operate in that
property for a number of years.
So as a seller, when you cometo sell the business, what you
really need to think about is doI have the permission to
continue to operate my businessfrom these premises, you know,
(31:25):
for the long term?
That's pretty simple.
If you own the property, youknow, you're the landlord, you
can then decide either I'll sellthe property at the same time,
potentially to that buyer, or Iwill retain the property and
continue to receive income fromit.
But uh, if your landlord is athird party or somebody else
owns the building, there are afew kind of legal requirements
(31:48):
with regards to the lease.
Uh, so to make sure that youcan continue to have that lease
for a number of years.
So if your lease is coming upto renewal within the next one,
two, three years, it's superimportant that you extend that
lease if it's a third-partylandlord.
Because you might get to apoint where you want to sell
your business and actually thebuyer goes, Well, how do I know
(32:10):
that I'll be able to operate?
You know, I buy this businessand the landlord won't extend
the lease for me.
So it's really important tohave a long lease, super
important.
And that's something that tripsup a lot of people.
And property matters, legalmatters, in my experience, don't
happen very quickly.
So if you're thinking thingswill happen quickly, they
generally don't.
So tackle that early.
The property is reallyimportant to be tackled early.
(32:32):
And alongside with theproperty, you have a number of
other things that are within theproperty, health and safety,
fire, um CQC and regulations.
You got, is there asbestos inthe building?
Um, is the lease if you do havea lease, is it in good repair?
So does it will the buildingneed other adjustments before
(32:54):
somebody can take the lease on?
So there are a number of otherthings that you need to consider
that are tied to the property.
Um, so you need to addressthose very early on because they
are a big part of the duediligence process.
And one of those things thatthat takes a really long time.
The other thing that'simportant, obviously, how you're
funding this.
So I'm sure that there werepeople on on the on the podcast
(33:17):
that were talking about funding,would know a lot more kind of
in detail funding um uh kind ofaspects of buying a business.
But it's really important thatyou secure funding early enough,
that you have the right levelof deposit, that um the
valuation that the bank carriesout aligns with the valuation
that you might have uh that theoffer is based on.
(33:40):
So it's it's really importantthat those things are aligned.
So and making sure thatobviously you can you can buy
the business and you can buy theproperty if you if you decided
to buy the property.
And the last one, the reallybig one, is the CQC.
So CQC, huge in our industry,obviously um regulate uh the way
(34:01):
that practices operate.
But that process oftransferring the CQC
registration from one owner tothe other owner can be really
complicated.
And CQC have recently had um alot of changes kind of at that
top level.
They launched the portal, theportal hasn't worked uh that
that well.
Uh so they're back to paperapplications.
And the process that wouldusually take, say, three to four
(34:25):
months, can now take sixmonths, seven months.
So this is from the moment whenthe sale is agreed.
So you're kind of thinking,actually, I've sold.
I now have four, six, eightmonths for the process to be,
you know, submitting anapplication to CQC, getting all
of the kind of um things inplace so that the application
(34:46):
can be approved.
It can take time.
So it's being really preparedand making sure that you have
the right advisors around youfor that process uh that takes
kind of that significant amountof time to happen.
And being kind of, you know, ifyou're prepared for it, if you
know it's coming, it's mucheasier to deal with than when
(35:06):
you are in the midst of it andkind of thinking, is this ever
going to end?
You know, I am in this processand these people are asking me
for stuff.
Um it's really important to besurrounded by people who are
guiding you on that journey.
And there are a number ofreally experienced solicitors,
really experienced brokers, umaccountants that understand the
(35:28):
dental industry and theintricacies of the dental
industry that can hold your handthrough that process.
Um, so that, you know, ifyou're prepared, you kind of
know what's coming, and you areaware of the fact that you have
to be pushing and you have to beengaged as a seller, that this
process is far less painful thanif you just go in with a
(35:49):
blindfold and go, I know whatI'm going to get.
It's just I just don't knowwhat is going to happen because
this process is killing me.
Popular Podcasts
Betrayal Weekly
Betrayal Weekly is back for a new season. Every Thursday, Betrayal Weekly shares first-hand accounts of broken trust, shocking deceptions, and the trail of destruction they leave behind. Hosted by Andrea Gunning, this weekly ongoing series digs into real-life stories of betrayal and the aftermath. From stories of double lives to dark discoveries, these are cautionary tales and accounts of resilience against all odds. From the producers of the critically acclaimed Betrayal series, Betrayal Weekly drops new episodes every Thursday. If you would like to share your story, you can reach out to the Betrayal Team by emailing them at betrayalpod@gmail.com and follow us on Instagram at @betrayalpod and @glasspodcasts. Please join our Substack for additional exclusive content, curated book recommendations, and community discussions. Sign up FREE by clicking this link Beyond Betrayal Substack. Join our community dedicated to truth, resilience, and healing. Your voice matters! Be a part of our Betrayal journey on Substack.
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com