June 6, 2024 • 34 mins
Is your dental practice ready for sale? Many dentists find themselves unprepared for the complex process of selling their practice, especially in today’s volatile market. Aaron and Dan are here to guide you through every critical step. Starting with an analysis of current market trends, we unpack the growing preference for private squat practices amid high-interest rates and a slowdown in corporate acquisitions. Discover why it's crucial to adapt your business model now and how to navigate the economic uncertainties that might otherwise delay your plans.
Planning to sell your practice involves more than just a decision—it's a strategic, multi-year endeavor. With Aaron and Dan’s expertise, you'll learn why planning at least two years ahead is essential for maximizing your practice's value. We discuss whether to sell outright or retain elements like the freehold, and the implications of staying on post-sale. Plus, uncover the importance of accurate financial data, specialist advisory teams, and a strong network to attract serious buyers. Don't miss this episode loaded with valuable insights for any dentist contemplating the sale of their practice.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:03):
Good evening everybody.
Good evening, hello and welcometo this webinar that we're
doing this evening, and it's allabout preparing your dental
practice or sale.
My name is Aaron and I'm basedhere in Surrey.
Tonight I'm actually a lovely,quite sunny evening, so I'm
quite lucky, and I'm lucky to bejoined by my colleague, dan.
Hi Dan, how are you doing?
Speaker 2 (00:24):
Yeah, I'm very good, aaron, how are you doing?
Speaker 1 (00:26):
Yeah, all good, all good.
So the intention tonight is notto take up your evening
certainly isn't.
It's just to share with yousome salient points and
information from our kind ofgreyhead experience of dealing
with the sale of dentalpractices and we've got plenty
of greyhead experience aroundthat.
Okay, so, without, withoutfurther ado, I'll launch some
slides.
(00:46):
Hopefully this will work.
Can you see them, dan?
Yeah.
I can see the slides?
Perfect right, so we'll crackthese on.
So, preparing your dentalpractice for sale.
Now a little bit of backgroundif you don't know who I am.
My name is Arun and I'm theowner and CEO of Samara Business
Advisors.
I've been doing this for about20 odd years, working with
(01:09):
dentists of all shapes and sizesall practice sales for the last
20 odd years.
I'm a trained charteredaccountant with PwC many years
back, and I used to work inbanking king, um, and I also
wear another hat.
I also own the neem tree dentalgroup, a small group down here
based in surrey and london, um,where I kind of, I suppose, get
a lot of my ideas and thoughtsto share to other clients, um.
(01:32):
So experience in the dentalsector is significant.
And then we have, dan, have ityourself.
Do you want to give a bit ofbackground about yourself?
Speaker 2 (01:41):
just one quick.
I really hate that picture,erin, by the way.
I think we need to update that.
But, um, yeah, just me.
So, um, I worked for rbs for 20years.
Um, in the last 10 years ofthat I was in the healthcare
department, so just dealing with, you know, doctors, uh,
dentists, etc.
And I've been working at samiranow for five years, mainly on
(02:05):
the finance side, but alsolooking at practice sales.
Speaker 1 (02:08):
So a lot of experience, like like you said,
really in terms of dental sure,and I think, yeah, and I think,
dan dan's, as he said, he'sworked in health care from
donkeys years, I think, from 16,by the sounds of it, isn't it?
Speaker 2 (02:22):
no, it's all starting to catch up with me now and I'm
looking older and older as itgoes by and where we all are.
Speaker 1 (02:29):
So, so right, let's crack on um.
So what's happening in themarket?
So I'll the way we'll run thistoday.
I'll probably talk a little bitabout the slides, and dan will
kind of add his value to theslides as well and his thoughts,
um, and then we'll kind of movethrough this.
So, in my thought process, isthat, up until kind of liz trust
(02:51):
kind of made a disaster of theeconomy a few years back there,
it seems to be quite a buoyantmarket in dentistry post that
things have literally droppedsignificantly.
Um.
What we've seen, though, though, is a real shift to buyers not
actually buying practices, butactually opening up squat
practices.
Private squat practices allshapes and sizes all across the
(03:14):
UK, and they're all private,tend to be private unless
they've got a lucky to get anNHS contract if they want it.
And with the interest ratesremaining high, we've seen
people not resisting but holdingback on purchasing.
Um, now the the indication.
(03:35):
There's no guarantee theindication to interest rates may
fall over the next few months,um, but with an election coming
up, who knows?
okay, um prediction on another,uh webinar that it'll be going
down by september, so I'm hopingthat it will go down soon, yeah
, fair enough, but but I think,if I I don't know what you, your
(03:59):
thought is on this, dan, butpeople have held back, but
there's only a certain pointthat you can hold back to
ultimately, you want to move inwith your lives.
If you want to buy a practiceor set up a practice, you can
wait a year, we wait 18 monthsor two years, but ultimately,
life is flying by and if youhave this aspiration to do it,
it's it's.
It's not necessarily the wisestthing just to keep waiting.
You've got to adapt yourbusiness model, but you need to
(04:21):
do that.
I don't know what do you think?
Speaker 2 (04:23):
yeah, I agree, I think we have had that sort of
wait and see model, I supposebecause people have got used to
that lower base rate in the pastand when the base rate started
moving up people had that time.
So let's hopefully would startgoing down.
But you know, in the past baserate has always been sitting
around sort of four, fivepercent.
(04:43):
So it the unusual bit was thelow base rate.
Obviously, what, what we've gotnow is probably more like that
we've we've had in the past.
Speaker 1 (04:51):
So I agree, I think people now are accepting what,
what the price of funds are andand moving forward and say, if
you want to go to that next stepof becoming a practice owner,
they're coming back into themarket now yeah, okay, and I
think the other, the other sideof the coin is that corporate
acquisition has certainly sloweddown, um, we're starting to see
(05:13):
signs of this restarting, andthey all present an argument,
say, oh, we never stopped buying, okay, but the reality is that
they they're they stop buying byjust slowing down effectively,
or being much more picky, ortheir terms are much more
onerous, that sellers wouldn'tsell to them, ok.
(05:34):
So I think they're exposed tothe debt markets as well.
And they've got high, they'rehighly leveraged.
A lot of these groups are sobacked by certain private equity
groups, backed by certainprivate equity groups.
So if they're borrowing andtheir interest rates have gone
up, the the desire to acquire umsuddenly slows down.
So we've really seen a real?
Um change in the marketbehavior.
(05:55):
But, but and I do say but,having been in this industry a
long time, having dealt withbusinesses for a long time um, I
think we're going to startturning a corner.
Assuming kind of there's nomajor kind of economic shocks
that come our way in the next 12months, I think we'll start
seeing buying happening again.
Um, and that's that's kind ofmy thought process anyway.
Speaker 2 (06:17):
So and I think I think also dental always seems
to ride out the waves.
You know I worked for ibs like2008 when everything was falling
apart but dental still donewell there and even the bank
that wasn't doing too great wasstill lending that market.
So I still think it's quite arobust sector.
That sort of continues really.
Speaker 1 (06:38):
Yeah, okay, cool, and then.
So now in terms of valuation.
So historically, the models orvaluations would be based on
turnover as a percentage, butwhat we see now is everything's
based on EBITDA, that'sultimately a measure of
profitability, and what thatstands for is earnings before
interest, tax depreciation andamortization, and ultimately
that's the number that one partycan think what EBITDA is and
(07:02):
another party could think it'sdifferent.
Ok, so it's important to haveaccurate accounts but then, at
the same time, determine anEBITDA that is realistic.
Now, the way then the practicesare then valued is based on the
multiples of the EBITDA, andthat depends on location, the
size of practices or private,and also whether it's a owner
(07:26):
operator kind of practice orit's associate led.
So, dan, do you want to runthrough these figures here?
Just to give an idea?
Speaker 2 (07:36):
yeah, so we just gave us sort of a broad sort of
outline, just based on a coupleof regions that we've we've
picked based on, like, ifthey're owner-occupiers, really,
and what we're seeing, what thepossible EBITDA calculations
could be.
So obviously London is slightlyhigher.
That's probably got a number offactors because certain areas
(07:58):
in London that people want to bein and also, I suppose in terms
of staffing as well, becausepeople want to move to London,
so it is higher where you know,maybe possibly the southwest
could be slightly lower in termsof that because, you know, not
as many people live there andobviously getting associates to
move to that area could beslightly harder.
(08:20):
So it does give.
Speaker 1 (08:22):
Obviously these are not set in stone, like you said,
because the practice that we'relooking at will have a factor
in that, but it's just given aflavor of what we're seeing in
the market really, sure, and Ithink we haven't put it on here,
but if you, if you is a, ifit's an associate, an associate
led practice where the practiceowner isn't working within the
practice, then we might see ahigher EBITDA multiple yeah, you
(08:45):
could be say london, it couldbe seven, possibly eight, you
know, depending on the practiceyeah, correct, yeah, right.
So I think we've got a realrange of.
But just to give you an idea,so if you're looking to work out
your EBITDA, then you canpotentially apply multiple and
then you'll kind of get a kindof very back of the MRI idea,
yeah, of how much your practicemay be worth.
(09:06):
Um, so when you're getting toum, if you're, if you're
thinking about selling, okay,you need to do some planning,
okay, um, and it's not kind ofthing you wake up one morning
and say, oh, I want to sell mypractice.
If you're going to do it thatway, you really won't get the
best value for your practice.
Um, so, dan, you're not gonnarun through these points here.
Speaker 2 (09:29):
Actually, yeah, so in terms of the, the planning side
of things, I suppose you know,like you said, really is not
just thinking one day I'm gonna,you know, sell my practice.
It's probably maybe two years inthat you start thinking about
that and planning, going forward, um and I suppose you need to
decide what you want to do onceyou sell as well, because you
(09:53):
know you may want to retire,which is fine, but then you may
also have the option that youwant to sell the practice and
then maybe stay on at that site.
So the things that you probablyneed to consider is you know
the person you're selling to doyou like them?
Can you work with them?
Because that's quite important,because you could sell the
practice to them.
And if you don't like them, soyou could have that issue where
(10:16):
you actually, when you meet theperson, take an option of maybe
selling the practice slightly ata cheaper rate because you like
the person.
You think, actually, goingforward, you can work with them.
And then, in terms of thegoodwill side of things is you
need to decide what you'reselling, what you're selling.
(10:40):
So if you own the freehold andthe goodwill, you know, do you
want to retain the freehold ordo you just want to sell the
goodwill element of the practicesort of going forward?
So you sort of need to have aplan in mind when you're sort of
going forward in terms of the,the sale yeah, valid point.
Speaker 1 (10:53):
And I think if you're potentially, if you're perhaps
a larger practice, okay andyou're looking to sell to a
group, I think you've got to berealistic.
And if you're potentially, ifyou're perhaps a larger practice
, okay and you're looking tosell to a group, I think you've
got to be realistic.
And if you're working in thatpractice as a clinician, even if
it's a couple of days a week,okay, they're going to want you
to stay in that practice for aprolonged period of time and tie
you in for maybe anythingbetween three and five years
(11:14):
time.
So you've got to be realistic.
If you're selling thatparticularly to a group now, if
you're selling that'sparticularly to a group now, if
you're selling it to anindividual and it's still a big
practice, they may still want toretain you as well.
So you've got to factor all ofthis into, kind of your, your
game plan for life.
Speaker 2 (11:27):
Um, if that makes sense and again, I suppose in in
terms of the selling, thepractice, to say if you could
choose not to sell to a group,if you wanted to exit quicker,
you may again take a slightlylower offer if they're giving
you the option to sort of exitmaybe in six months, like you're
saying, instead of being tiedin for two, three years where
(11:48):
the payment for the practicecould be staged.
You know they pay you a certainpercentage up front and then
another after performance of thepractice.
So you know you've got a way ina number of factors in terms of
who you're selling to.
Speaker 1 (12:03):
Yeah, okay, all right .
So then, moving on to premises,as Dan mentioned, is freehold,
leasehold, repairs, all thisstuff.
So, dan, do you want to kind ofgive us a heads up on this?
Speaker 2 (12:15):
Yeah.
So just what we're talkingabout in terms of the freehold
is that you know, do you want tosell the freehold or do you
want to retain that?
Um, possibly something that youmight need to think about if
there's maybe debt on thefreehold that would be
outstanding post-sale, you mayneed to sort of speak to the
lender on that, that they'rehappy for you to keep that
(12:35):
freehold because obviously thethe terms on that, because at
the freehold you'd be, you know,opco, propco, operator, you
know there.
So it may be that slightlychanged.
So you may need to speak to thelender in terms of that.
If it's a lease that you'relooking to sort of, you know you
could be looking to lease thefreehold to someone.
(12:56):
So you've got the freehold thatyou're going to keep and you
might need to create a lease forthe new person coming in.
So normally for the financethey'll need like a 15 year
lease, so you would need to getthat put in place beforehand for
them.
And then, on the other side, ifit's just a leasehold property
that you own, if the lease isrunning down, the same scenario
(13:18):
would be that you'd need tocreate a longer lease.
The problem that we sometimesfind in in terms of sales is
they've got to the point theywant to sell sell the practice
but they haven't done anythingabout the lease.
And if you've got a third partyinvolved, they don't actually
care in terms of how quickly thepaperwork needs to get sorted
out and what needs to be done.
(13:39):
And also it opens up theopportunity that if you're a bit
desperate to get a new lease inplace, that they could take
advantage of that.
So if you give yourself a longrun up in terms of that, you
could get all those items sortof squared off before you sort
of bring it to market.
Then you've got that lease inplace and you haven't got those
delays in terms of the creatingthe new lease, repairs and
(14:03):
decorations on.
In terms of that it's.
It's not about spendinghundreds of thousand pounds on
new equipment at the practicebecause that won't be cost
effective for you.
It's more about is there somesort of bits that need a little
bit of tidying up?
A bit like when you're sellingyour house.
You know there'll be a coupleof rooms that maybe need a bit
of decoration, so to make sureit's it's looking okay.
(14:26):
What you're trying to do is getaway from people chipping away
at your price.
Because if they say, oh, if Ihave to come in here I'm gonna
have to do this, I may need todo this.
If, if you can sort of clearthat stuff off, then hopefully
when they're looking around thepractice, it's more in their,
their mind.
They're sort of, yeah, that alllooks fine.
That all looks fine.
So it's just getting everythingnice up on its toes ready to go
(14:48):
.
And the due diligence side ofthings.
These are stuff that the thesolicitor will need from you at
some point in terms of thepractice.
So you know your cqc, you knowfire risk assessments and stuff
like that.
You need to start getting thatpaperwork together because again
, you don't want the sale todelay because you haven't got
(15:09):
all your paperwork up straightand the solicitors chasing you
for paperwork.
So there's a lot of stuff thatyou you'll need to look at.
You know asbestos checks, youknow, know maybe some of the
oldest sort of properties, butagain it's something that you'll
need to go through to make sureit's all there ready for the
solicitor, because what you wantis a nice smooth sale and you
(15:32):
don't want you holding up theitems really Sure Cool.
Speaker 1 (15:38):
And then on the other side of the coin which we
haven't mentioned that, but thisis kind of something that we
are really kind of focusing onokay is the accounting and
finance side, and I think we wesee buyers getting information
from practice or from salesagents, um, with accounts that
might be two years or even threeyears old sometimes, I think I
(15:59):
have one today.
Speaker 2 (16:00):
Someone sent me 2002 accounts for 20 22, not 2002,
yeah, 2022 yeah, so yeah, theysent me those accounts and
there's nothing you can doreally with them.
The dates are so out of dateand all all that happens in that
situation is you.
You have to go back and ask formore.
(16:20):
You know, I need the up-to-dateaccounts.
You know 2023s I need somemanagement information.
I don't understand why youwould bring it to market with
such old figures.
Really Correct correct.
Speaker 1 (16:32):
So I think, firstly, it's essential.
So where are we now?
We're in May, june, june.
So if are we now, we're in June.
So if you were thinking ofselling, yeah, we're in June,
okay, the year flies by already.
If you were thinking of, kindof, I'm ready to go on to sell
my practice honestly if youryear end is at March 24, okay, I
would strongly advise you havethe March 24 annual accounts all
(16:56):
done and dusted, okay, beforeyou do that, in addition to that
, really, what you want to haveis the last 12 months, and it's
known as usually LTM managementaccounts.
Now, if you're looking atselling to a group or anyone
kind of who's got kind ofinvestors and private equity
involved, they will always lookat last 12 months trading.
Okay to see, actually, does itcorroborate with, say, the
(17:20):
previous years?
Because that will.
That's what they'll base theirvaluation on, that data.
Um, increasingly, individualbuyers are requesting this
information.
Because the banks arerequesting this information.
They want to see up-to-datefinancial information before
they say you know, we're goingto lend you a million quid or
whatever it may be.
So this, this is, this is, Ithink, is where it's going to go
in the marketplace.
(17:41):
I think you won't be.
It's hard to sell a dentalpractice at the moment.
You make it a lot harder if youdon't have this information to
hand.
Okay, um, and for a buyer,they'll say well, if that
information is not there, you'llthink you know what, forget it,
I'm not gonna do it, I'm notinterested, um, it's just, it's
too many risks, too manyunknowns.
So you need to be transparent,you need to provide this
information.
(18:01):
So, as I said earlier, in thisclient climate, buyers and
lenders want to see anup-to-date and accurate history
and don't put your practice onthe market, certainly if you
don't have the annual accounts,and ideally you want the last 12
months management information.
So when I say last 12 monthsmanaging accounts, everything
should be on the thing.
Now, if you're running apractice, you should be having
(18:22):
your books done every month.
Okay, on something like zeros,quick books.
So the bookkeeping's done, okay.
If you're not doing that,that's the first step before you
even get to the point ofthinking about selling in
practice.
Get yourself, get yourself anorder and again, we can help you
there.
Now, how can you get the bestvaluation?
Um, again, before you put it onthe market, you need to think
(18:44):
about how you can do, what youcan do to improve your valuation
.
Now, if you've got the managinginformation, you'll be able to
see trends, okay, and you needto think okay, are there things
that I can increase turnover,could I change pricing, can I
increase the profits?
But similarly, you might think,well, actually are there areas
that I can reduce costs, such asmaterials or utilities and that
(19:04):
type of thing?
And so, again, we can help.
We help clients join our buyinggroup where we help people save
money on the materials, utilitycosts, all those types of
things.
In addition, you want to havestaff contracts in place.
You need to make sure everyonehas a contract.
It needs to be very clear thatwhat they're getting paid, what
are they being paid for, okay,um.
So I think that's reallyimportant and increasingly now
(19:27):
what we're doing is, when we doa valuation of a practice, we're
using last 12 months data,we're hooking up, we're gaining
access to um zero for the clientor quickbooks for the client,
and then actually, from thoselast 12 months data are able to
provide an up-to-date valuationof the practice based on the 12
month data, um.
So we'll get an ebitda for theclient and then, actually, from
those last 12 months data areable to provide an up-to-date
evaluation of the practice basedon the 12-month data, um.
So we'll get an ebitda for thelast 12 months based on the
(19:49):
information sitting inquickbooks or zero, and that
means that information needs tohave been done properly,
accurately and up to date.
If it's garbage in, then theresult will be garbage out.
So that's an essential aspect,um, but that will then give you
an accurate valuation based onthe current marketplace.
Um.
And I think and the last pointyou've kind of pushed here, dan
it's not just a sales brochure.
(20:10):
You want to talk about thatfrom a bank's perspective yeah.
Speaker 2 (20:14):
So we, when we look at the figures because sometimes
I see we, you know, work on thefinance side we we get sales
figures in from from otheragents and you know we look at
that and we try and look at howa bank would look at the
financials and the EBITDAfigures and the add-backs that
they've done.
And sometimes what is beingadded back probably is not right
(20:37):
and it doesn't get to the rightfigures, how a bank would look
at those figures really.
So it's really sort of lookinga bank would look at those
figures really.
So it's it's really sort oflooking at.
When we look at the thesefigures, we're looking at how a
bank would present it and howthose figures will be again
relied on by the lenders.
Because, like your point, reallyin terms of the EBITDA stuff,
(20:57):
if, if the EBITDA is wrong andthe figures are wrong, it gives
the buyer the opportunity tochip away at your price again
because they can come back andsay, well, that's not actually
right, you've added back in thatfigure.
I don't think that's correctbecause that figure is going to
be there going forward.
So we try and look at very muchhow a lender would look at the
(21:18):
EBITDA figures and we try andget to that right figure.
So again, it can be relied onby the buyers.
They, they, will pay the pricethat you want for your practice
yeah, yeah, okay.
Speaker 1 (21:32):
So, as I mentioned earlier, I think, if you want to
get the best valuation, provideaccess to zero or QuickBooks.
Firstly, make sure you havezero and QuickBooks set up and
you're doing the bookkeeping,okay, and then provide access to
that data.
Becausebooks Firstly, make sureyou have zero and QuickBooks
set up when you're doing thebookkeeping, okay, and then
provide access to that data,because then we can review the
accounts, we can assess thequality of the bookkeeping first
and then ultimately provide avaluation based on the most
(21:52):
recent EBITDA, because if you'rethen using recent data, the
buyers can't argue and it'sgoing to be a lot harder for
them to chip away at the price,as dan mentioned.
Um, yeah, so I think thatthat's those.
That's a really.
Speaker 2 (22:07):
These are really important points I think it's
key getting the right sort of.
You know you want that rightebitda figure because if that's
driving the value of thepractice, you know that needs to
be correct and it needs to bewith the right information.
So Because if you're puttingdata in that's two years old,
you know how do they know whatthey're buying.
You know the lenders are notgoing to rely on it because they
(22:30):
won't lend.
So you're not going to be ableto sell the practice and
obviously it makes it opens upopportunities to say to chip
away.
And I think a few times.
You know if all your accountsare not up to date, they'll chip
away at your price.
If there's items in thepractice that need a bit of
refurbishment, they'll chip awayat your price.
(22:52):
So what you're trying to do iscreate an area where you've
covered every point that you canso that the price that you want
for your practice you're goingto receive.
Speaker 1 (23:03):
Yeah, agreed, agreed, okay.
So then specialist advisors whodo they need Dan?
Yeah, so.
Speaker 2 (23:12):
I think yeah, an accountant.
Speaker 1 (23:15):
Got one here sitting here.
We've been doing it 20-oddyears.
There's not much we haven'tseen.
We're very much a digital-firstaccountancy firm, so
everything's on Xero orQuickBooks.
We use all the latesttechnology and any client that
we have we strongly encourage tobe on those types of platforms,
because that then can help youmake sure that you have accurate
(23:36):
accounts, because then, if youget accurate accounts, you can
have an accurate valuation andtherefore ultimately hopefully
get the price that you deservefor your practice.
Ok, so that's my hard sell.
Who else?
Speaker 2 (23:47):
Yeah, the sales agent .
So obviously it's Samira.
We can undertake that work foryou as well.
We've got experience in thedental market and, like you say,
we've got an accountancy firm.
We've also got a financebrokerage as well.
So you know we've got a lot ofexperience in terms of the
sector.
So obviously we can give youthe information that you need.
(24:08):
The solicitor's point is quiteimportant as well, because there
are solicitors out there thatcould be cheaper than dental
solicitors.
But what you'll find is thetransaction will probably take
longer because they won'tunderstand what they're doing.
So you may pay slightly morefor a dental specialist
solicitor, but they're certainlyworth paying.
(24:29):
And in terms of the financebrokerage side of things, again,
what we you know we've we'vegot plenty of buyers out there
that are looking.
You know we speak to them everyday in terms of what they're
looking for, in terms ofpractices and and obviously we
will do like a pre-assessment ofthem of what they can afford.
So that helps in terms of sortof cutting down on time wasters
(24:50):
where people are looking at thepractice but probably can't
afford it.
Speaker 1 (24:56):
Sure and yeah, right, and I think that's important.
When we as a finance brokerage,we will always vet buyers okay
to say, well, if they want tobuy a million-pound practice,
but they can only afford a halfa million-pound practice, we
won't even put that type ofbuyer forward.
Okay, yeah.
And in addition, I think we'vegot so much experience in that
finance side of things, I thinknow it's important to realise
(25:20):
that you need buyers who havegot the funds to do it.
Otherwise it's a waste of time.
Now in our database we have adatabase of about four and a
half thousand uk dentists, okay,who we email regularly, um, so
we have a big reach.
When we're sending out anyparticular details about a
practice, um, we get a goodresponse usually from from such
(25:41):
things okay, so definitely, uh,uh, you need specialist advisors
, um, so do you want to coverthis?
Speaker 2 (25:50):
that slide down yeah, I think a lot of this stuff is
is what we spoke about, isn't itreally?
In terms of the experience thatwe had within the sector.
So, see, you know we've gotpractice, sales, finance and
accountancy.
So, you see, me was very much,you know, geared up to help
dentists in the market, really,and so we've got many years
(26:10):
experience.
Like you said, you've got 20years.
I've got 20 odd years and thennigel's got slightly more.
But, like I said, we've got abig reach in terms of, you know,
the network that we have.
You know we, we've got a lot on.
You know, we reach out to a lotof people in terms of linkedin,
(26:31):
um, you know the, the emailsthat we we send out.
So we've got a lot of peoplethat we we can reach out to, to
to take any sale forward.
And you, you know theinformation that we're preparing
for clients is information thatwe want to receive in terms of
for the finance, because workingwith the finance team is that
(26:51):
you know, if I sent, say toNigel, if I sent him, you know,
2022 accounts for a practicethat I'm looking to sell, I'd
imagine he would come back to mequite strongly and say that
this has not been packaged inthe right way.
So what we're trying to do interms of the packaging is
everything that's going out ishow we would want to see it
(27:12):
coming through, and making surethat we're covering off all the
points that we need.
So, one, you can sell thepackages quickly and, two, know
the buyers are able to to raisethe finance that they need,
because you know, if they can'traise the finance unless you
find those cash buyers which aregreat out there, but you know
that they will need a banksupport and they need all that
(27:34):
information to take that forward.
Speaker 1 (27:36):
Sure, and I think, if I give you my own experience,
as I said earlier, we own dentalclinics ourselves, we've sold
dental clinics ourselves, andthe way we've always done it is
by making sure we haveup-to-date management
information, making sure that wehave everything aligned already
and then, once we get to thatpoint, we can sell.
Okay, um, now you might haveall that ready.
(27:58):
And my view is if, in mypersonal opinion is, you should
always be ready to sell yourpractice, okay, um, because you
never know who might comeknocking on door, on your door,
with a, with a big check.
Therefore, have these thingsready, have the management
accounts, have the cqc paperworkready, have the leasing ready,
all these type of things.
Get.
Get yourself organized, okay,because you just don't know
(28:18):
who's going to knock on the door, what the opportunity,
opportunity that can come aroundto you.
Okay, so we have, we cancertainly help in that respect.
Um, what type of information dothey need, dan?
Speaker 2 (28:31):
yeah, so this is, I suppose, going through
everything that we we would need.
So, obviously, the last threeyears practice accounts, um, and
obviously having the, the pnlin there would would be great.
Obviously, the, the access tothe online, online bookkeeping
this is something that we'rereally trying to push because we
can then give real time sort ofvaluations on the practice.
(28:51):
We're using the last sort of 12months data, which would be
useful.
Obviously, that sort of feedsinto the management information,
management information.
Or see if you've got an nhscontract.
You know people will want tosee that you know the contract's
performing.
You know that you're up to dateon your udas.
Again, the, the one I looked attoday, they had an nhs contract
(29:14):
but they didn't send any nhscontract details, which is quite
a key part to the application,really.
So it's, it's these type ofthings.
You know the patient plan.
If you've got a patient plan inplace, you know, yeah, who's
using it, how many people usingit, um, staff breakdowns, like
you were saying in terms of that.
Have they all got theircontracts?
(29:34):
What are they being paid?
You know how much everyone thatworks in the practice.
You know you need to understandwho's getting paid and when.
Obviously, cqc registration.
Most of that should be up todate, and then any other
relevant information.
If there's certain things interms of your practice that
people need to know, so thesequestions don't come up later on
(29:57):
, you know, let us know andobviously we'll build that into
the report because, again, it'sjust trying to make sure that
everything's covered off in thatinitial application.
Speaker 1 (30:06):
Really, okay, cool.
So how do?
How do people help?
How do we help people dad?
Speaker 2 (30:16):
yeah, so they can just reach out to me.
So if they want to have a chatum individually, um free of
charge, in terms of their, theirpractice and what they want to
do going forward, these are mycontact details.
They can either drop me anemail, you know, give me a or if
they want to book a calldirectly with me at a time
that's convenient to them, thenjust use those links on there
(30:37):
and then they can book a slot.
Speaker 1 (30:39):
And so we'll be happy to help and have a chat.
Sure, if you go to thesamaracouk website, you can see
Dan's profile there.
You can book a time, a call,with him.
Alternatively, you want to booka call with me?
I'm happy to have a chat aswell.
Um, and as I think, just to kindof wrap up today, I think it's
(30:59):
all about planning andorganizing yourself and having
the conversation, um, withsomeone like ourselves to help
you.
Um, we're there to support you.
We're there to support you toget the best kind of deal
available that may be out there.
Um, and it's also we're thereto support you.
We're there to support you toget the best kind of deal
available that may be out there.
And we're also there to adviseyou, to say, if we think it's
not a good deal as well, okay,and to hold fire.
(31:19):
Or maybe it might be a coupleof years down the line and your
practice isn't quite right.
We'll tell you what you need todo to change.
This is what you need toimplement.
Do X, y, z, and then we canhelp you.
So, um, we're here to helpcontact dan or contact myself,
and, uh, we'd be delighted tohelp you.
Speaker 2 (31:39):
Okay, so, and just sort of one other point, if
everyone you know, we spokeabout material costs and we
mentioned the buying group.
Um, if anyone wants to join thebuying group, it's free of
charge to join.
Um, and we've got loads ofcompanies on there.
So we've got a company thathelps with cqc, we've got a
consumables company on there, um, we've also got a patient plan
(32:00):
um company on there as well, andsome that helps with utilities.
So, um, if, if you want to lookat your costs and to help
increase your bottom line, likelike you're saying, aaron, you
know it's a bit of a running, soif you can start getting that
done now, um, yeah, just again,reach out to me on that.
Speaker 1 (32:15):
I'm happy to drop the details through to you, sure,
and I think just on theaccounting side of things.
Lastly, if you're not on aplatform like zero, if you're
not getting bookkeeping doneevery month, you don't have
up-to-date information.
Um, firstly, I would stronglysuggest you did, okay.
And then, secondly, if you needsome help with it or anything,
just reach out to me.
(32:36):
Me and my accounting team cancertainly help and put some
structure and organisation intoyour finances, which will only
help you, not just for selling,but just generally for your
practice, for your taxes, foreverything.
Okay.
So we're here to help and, onthat note, we've been talking
about 30 minutes, or just over30 minutes.
Um, I'd like to say thank youto everyone.
If there's any questions, we'llhold fire a minute, because I
(32:58):
know there's always a slightdelay.
There might be a question ortwo that may come through, any
final thoughts from you, dan.
Otherwise, if we wait for anyquestions, otherwise we'll end
there.
Speaker 2 (33:07):
No, just to say if someone obviously sometimes on
this forum people don't want, soyeah, if they just want to
reach out to us directly, we'remore than happy to have a
conversation with them and sayit's a pre-initial conversation,
so just reach out to us, sure.
Speaker 1 (33:22):
And finally, I will be.
This is all recorded.
I will be sharing this video onYouTube and through our
database as well, so you canalways watch this again or share
it with anyone you want to aswell.
Okay, so thanks very much.
I don't have any questions thisevening, which is fine, and
have a lovely remainder of theevening.
Thank you, good night.
See you later, bye, bye.
Good evening everybody.
Good evening, hello and welcometo this webinar that we're
doing this evening, and it's allabout preparing your dental
practice or sale.
My name is Aaron and I'm basedhere in Surrey.
Tonight I'm actually a lovely,quite sunny evening, so I'm
quite lucky, and I'm lucky to bejoined by my colleague, dan.
Hi Dan, how are you doing?
Speaker 2 (00:24):
Yeah, I'm very good, aaron, how are you doing?
Speaker 1 (00:26):
Yeah, all good, all good.
So the intention tonight is notto take up your evening
certainly isn't.
It's just to share with yousome salient points and
information from our kind ofgreyhead experience of dealing
with the sale of dentalpractices and we've got plenty
of greyhead experience aroundthat.
Okay, so, without, withoutfurther ado, I'll launch some
slides.
(00:46):
Hopefully this will work.
Can you see them, dan?
Yeah.
I can see the slides?
Perfect right, so we'll crackthese on.
So, preparing your dentalpractice for sale.
Now a little bit of backgroundif you don't know who I am.
My name is Arun and I'm theowner and CEO of Samara Business
Advisors.
I've been doing this for about20 odd years, working with
(01:09):
dentists of all shapes and sizesall practice sales for the last
20 odd years.
I'm a trained charteredaccountant with PwC many years
back, and I used to work inbanking king, um, and I also
wear another hat.
I also own the neem tree dentalgroup, a small group down here
based in surrey and london, um,where I kind of, I suppose, get
a lot of my ideas and thoughtsto share to other clients, um.
(01:32):
So experience in the dentalsector is significant.
And then we have, dan, have ityourself.
Do you want to give a bit ofbackground about yourself?
Speaker 2 (01:41):
just one quick.
I really hate that picture,erin, by the way.
I think we need to update that.
But, um, yeah, just me.
So, um, I worked for rbs for 20years.
Um, in the last 10 years ofthat I was in the healthcare
department, so just dealing with, you know, doctors, uh,
dentists, etc.
And I've been working at samiranow for five years, mainly on
(02:05):
the finance side, but alsolooking at practice sales.
Speaker 1 (02:08):
So a lot of experience, like like you said,
really in terms of dental sure,and I think, yeah, and I think,
dan dan's, as he said, he'sworked in health care from
donkeys years, I think, from 16,by the sounds of it, isn't it?
Speaker 2 (02:22):
no, it's all starting to catch up with me now and I'm
looking older and older as itgoes by and where we all are.
Speaker 1 (02:29):
So, so right, let's crack on um.
So what's happening in themarket?
So I'll the way we'll run thistoday.
I'll probably talk a little bitabout the slides, and dan will
kind of add his value to theslides as well and his thoughts,
um, and then we'll kind of movethrough this.
So, in my thought process, isthat, up until kind of liz trust
(02:51):
kind of made a disaster of theeconomy a few years back there,
it seems to be quite a buoyantmarket in dentistry post that
things have literally droppedsignificantly.
Um.
What we've seen, though, though, is a real shift to buyers not
actually buying practices, butactually opening up squat
practices.
Private squat practices allshapes and sizes all across the
(03:14):
UK, and they're all private,tend to be private unless
they've got a lucky to get anNHS contract if they want it.
And with the interest ratesremaining high, we've seen
people not resisting but holdingback on purchasing.
Um, now the the indication.
(03:35):
There's no guarantee theindication to interest rates may
fall over the next few months,um, but with an election coming
up, who knows?
okay, um prediction on another,uh webinar that it'll be going
down by september, so I'm hopingthat it will go down soon, yeah
, fair enough, but but I think,if I I don't know what you, your
(03:59):
thought is on this, dan, butpeople have held back, but
there's only a certain pointthat you can hold back to
ultimately, you want to move inwith your lives.
If you want to buy a practiceor set up a practice, you can
wait a year, we wait 18 monthsor two years, but ultimately,
life is flying by and if youhave this aspiration to do it,
it's it's.
It's not necessarily the wisestthing just to keep waiting.
You've got to adapt yourbusiness model, but you need to
(04:21):
do that.
I don't know what do you think?
Speaker 2 (04:23):
yeah, I agree, I think we have had that sort of
wait and see model, I supposebecause people have got used to
that lower base rate in the pastand when the base rate started
moving up people had that time.
So let's hopefully would startgoing down.
But you know, in the past baserate has always been sitting
around sort of four, fivepercent.
(04:43):
So it the unusual bit was thelow base rate.
Obviously, what, what we've gotnow is probably more like that
we've we've had in the past.
Speaker 1 (04:51):
So I agree, I think people now are accepting what,
what the price of funds are andand moving forward and say, if
you want to go to that next stepof becoming a practice owner,
they're coming back into themarket now yeah, okay, and I
think the other, the other sideof the coin is that corporate
acquisition has certainly sloweddown, um, we're starting to see
(05:13):
signs of this restarting, andthey all present an argument,
say, oh, we never stopped buying, okay, but the reality is that
they they're they stop buying byjust slowing down effectively,
or being much more picky, ortheir terms are much more
onerous, that sellers wouldn'tsell to them, ok.
(05:34):
So I think they're exposed tothe debt markets as well.
And they've got high, they'rehighly leveraged.
A lot of these groups are sobacked by certain private equity
groups, backed by certainprivate equity groups.
So if they're borrowing andtheir interest rates have gone
up, the the desire to acquire umsuddenly slows down.
So we've really seen a real?
Um change in the marketbehavior.
(05:55):
But, but and I do say but,having been in this industry a
long time, having dealt withbusinesses for a long time um, I
think we're going to startturning a corner.
Assuming kind of there's nomajor kind of economic shocks
that come our way in the next 12months, I think we'll start
seeing buying happening again.
Um, and that's that's kind ofmy thought process anyway.
Speaker 2 (06:17):
So and I think I think also dental always seems
to ride out the waves.
You know I worked for ibs like2008 when everything was falling
apart but dental still donewell there and even the bank
that wasn't doing too great wasstill lending that market.
So I still think it's quite arobust sector.
That sort of continues really.
Speaker 1 (06:38):
Yeah, okay, cool, and then.
So now in terms of valuation.
So historically, the models orvaluations would be based on
turnover as a percentage, butwhat we see now is everything's
based on EBITDA, that'sultimately a measure of
profitability, and what thatstands for is earnings before
interest, tax depreciation andamortization, and ultimately
that's the number that one partycan think what EBITDA is and
(07:02):
another party could think it'sdifferent.
Ok, so it's important to haveaccurate accounts but then, at
the same time, determine anEBITDA that is realistic.
Now, the way then the practicesare then valued is based on the
multiples of the EBITDA, andthat depends on location, the
size of practices or private,and also whether it's a owner
(07:26):
operator kind of practice orit's associate led.
So, dan, do you want to runthrough these figures here?
Just to give an idea?
Speaker 2 (07:36):
yeah, so we just gave us sort of a broad sort of
outline, just based on a coupleof regions that we've we've
picked based on, like, ifthey're owner-occupiers, really,
and what we're seeing, what thepossible EBITDA calculations
could be.
So obviously London is slightlyhigher.
That's probably got a number offactors because certain areas
(07:58):
in London that people want to bein and also, I suppose in terms
of staffing as well, becausepeople want to move to London,
so it is higher where you know,maybe possibly the southwest
could be slightly lower in termsof that because, you know, not
as many people live there andobviously getting associates to
move to that area could beslightly harder.
(08:20):
So it does give.
Speaker 1 (08:22):
Obviously these are not set in stone, like you said,
because the practice that we'relooking at will have a factor
in that, but it's just given aflavor of what we're seeing in
the market really, sure, and Ithink we haven't put it on here,
but if you, if you is a, ifit's an associate, an associate
led practice where the practiceowner isn't working within the
practice, then we might see ahigher EBITDA multiple yeah, you
(08:45):
could be say london, it couldbe seven, possibly eight, you
know, depending on the practiceyeah, correct, yeah, right.
So I think we've got a realrange of.
But just to give you an idea,so if you're looking to work out
your EBITDA, then you canpotentially apply multiple and
then you'll kind of get a kindof very back of the MRI idea,
yeah, of how much your practicemay be worth.
(09:06):
Um, so when you're getting toum, if you're, if you're
thinking about selling, okay,you need to do some planning,
okay, um, and it's not kind ofthing you wake up one morning
and say, oh, I want to sell mypractice.
If you're going to do it thatway, you really won't get the
best value for your practice.
Um, so, dan, you're not gonnarun through these points here.
Speaker 2 (09:29):
Actually, yeah, so in terms of the, the planning side
of things, I suppose you know,like you said, really is not
just thinking one day I'm gonna,you know, sell my practice.
It's probably maybe two years inthat you start thinking about
that and planning, going forward, um and I suppose you need to
decide what you want to do onceyou sell as well, because you
(09:53):
know you may want to retire,which is fine, but then you may
also have the option that youwant to sell the practice and
then maybe stay on at that site.
So the things that you probablyneed to consider is you know
the person you're selling to doyou like them?
Can you work with them?
Because that's quite important,because you could sell the
practice to them.
And if you don't like them, soyou could have that issue where
(10:16):
you actually, when you meet theperson, take an option of maybe
selling the practice slightly ata cheaper rate because you like
the person.
You think, actually, goingforward, you can work with them.
And then, in terms of thegoodwill side of things is you
need to decide what you'reselling, what you're selling.
(10:40):
So if you own the freehold andthe goodwill, you know, do you
want to retain the freehold ordo you just want to sell the
goodwill element of the practicesort of going forward?
So you sort of need to have aplan in mind when you're sort of
going forward in terms of the,the sale yeah, valid point.
Speaker 1 (10:53):
And I think if you're potentially, if you're perhaps
a larger practice, okay andyou're looking to sell to a
group, I think you've got to berealistic.
And if you're potentially, ifyou're perhaps a larger practice
, okay and you're looking tosell to a group, I think you've
got to be realistic.
And if you're working in thatpractice as a clinician, even if
it's a couple of days a week,okay, they're going to want you
to stay in that practice for aprolonged period of time and tie
you in for maybe anythingbetween three and five years
(11:14):
time.
So you've got to be realistic.
If you're selling thatparticularly to a group now, if
you're selling that'sparticularly to a group now, if
you're selling it to anindividual and it's still a big
practice, they may still want toretain you as well.
So you've got to factor all ofthis into, kind of your, your
game plan for life.
Speaker 2 (11:27):
Um, if that makes sense and again, I suppose in in
terms of the selling, thepractice, to say if you could
choose not to sell to a group,if you wanted to exit quicker,
you may again take a slightlylower offer if they're giving
you the option to sort of exitmaybe in six months, like you're
saying, instead of being tiedin for two, three years where
(11:48):
the payment for the practicecould be staged.
You know they pay you a certainpercentage up front and then
another after performance of thepractice.
So you know you've got a way ina number of factors in terms of
who you're selling to.
Speaker 1 (12:03):
Yeah, okay, all right .
So then, moving on to premises,as Dan mentioned, is freehold,
leasehold, repairs, all thisstuff.
So, dan, do you want to kind ofgive us a heads up on this?
Speaker 2 (12:15):
Yeah.
So just what we're talkingabout in terms of the freehold
is that you know, do you want tosell the freehold or do you
want to retain that?
Um, possibly something that youmight need to think about if
there's maybe debt on thefreehold that would be
outstanding post-sale, you mayneed to sort of speak to the
lender on that, that they'rehappy for you to keep that
(12:35):
freehold because obviously thethe terms on that, because at
the freehold you'd be, you know,opco, propco, operator, you
know there.
So it may be that slightlychanged.
So you may need to speak to thelender in terms of that.
If it's a lease that you'relooking to sort of, you know you
could be looking to lease thefreehold to someone.
(12:56):
So you've got the freehold thatyou're going to keep and you
might need to create a lease forthe new person coming in.
So normally for the financethey'll need like a 15 year
lease, so you would need to getthat put in place beforehand for
them.
And then, on the other side, ifit's just a leasehold property
that you own, if the lease isrunning down, the same scenario
(13:18):
would be that you'd need tocreate a longer lease.
The problem that we sometimesfind in in terms of sales is
they've got to the point theywant to sell sell the practice
but they haven't done anythingabout the lease.
And if you've got a third partyinvolved, they don't actually
care in terms of how quickly thepaperwork needs to get sorted
out and what needs to be done.
(13:39):
And also it opens up theopportunity that if you're a bit
desperate to get a new lease inplace, that they could take
advantage of that.
So if you give yourself a longrun up in terms of that, you
could get all those items sortof squared off before you sort
of bring it to market.
Then you've got that lease inplace and you haven't got those
delays in terms of the creatingthe new lease, repairs and
(14:03):
decorations on.
In terms of that it's.
It's not about spendinghundreds of thousand pounds on
new equipment at the practicebecause that won't be cost
effective for you.
It's more about is there somesort of bits that need a little
bit of tidying up?
A bit like when you're sellingyour house.
You know there'll be a coupleof rooms that maybe need a bit
of decoration, so to make sureit's it's looking okay.
(14:26):
What you're trying to do is getaway from people chipping away
at your price.
Because if they say, oh, if Ihave to come in here I'm gonna
have to do this, I may need todo this.
If, if you can sort of clearthat stuff off, then hopefully
when they're looking around thepractice, it's more in their,
their mind.
They're sort of, yeah, that alllooks fine.
That all looks fine.
So it's just getting everythingnice up on its toes ready to go
(14:48):
.
And the due diligence side ofthings.
These are stuff that the thesolicitor will need from you at
some point in terms of thepractice.
So you know your cqc, you knowfire risk assessments and stuff
like that.
You need to start getting thatpaperwork together because again
, you don't want the sale todelay because you haven't got
(15:09):
all your paperwork up straightand the solicitors chasing you
for paperwork.
So there's a lot of stuff thatyou you'll need to look at.
You know asbestos checks, youknow, know maybe some of the
oldest sort of properties, butagain it's something that you'll
need to go through to make sureit's all there ready for the
solicitor, because what you wantis a nice smooth sale and you
(15:32):
don't want you holding up theitems really Sure Cool.
Speaker 1 (15:38):
And then on the other side of the coin which we
haven't mentioned that, but thisis kind of something that we
are really kind of focusing onokay is the accounting and
finance side, and I think we wesee buyers getting information
from practice or from salesagents, um, with accounts that
might be two years or even threeyears old sometimes, I think I
(15:59):
have one today.
Speaker 2 (16:00):
Someone sent me 2002 accounts for 20 22, not 2002,
yeah, 2022 yeah, so yeah, theysent me those accounts and
there's nothing you can doreally with them.
The dates are so out of dateand all all that happens in that
situation is you.
You have to go back and ask formore.
(16:20):
You know, I need the up-to-dateaccounts.
You know 2023s I need somemanagement information.
I don't understand why youwould bring it to market with
such old figures.
Really Correct correct.
Speaker 1 (16:32):
So I think, firstly, it's essential.
So where are we now?
We're in May, june, june.
So if are we now, we're in June.
So if you were thinking ofselling, yeah, we're in June,
okay, the year flies by already.
If you were thinking of, kindof, I'm ready to go on to sell
my practice honestly if youryear end is at March 24, okay, I
would strongly advise you havethe March 24 annual accounts all
(16:56):
done and dusted, okay, beforeyou do that, in addition to that
, really, what you want to haveis the last 12 months, and it's
known as usually LTM managementaccounts.
Now, if you're looking atselling to a group or anyone
kind of who's got kind ofinvestors and private equity
involved, they will always lookat last 12 months trading.
Okay to see, actually, does itcorroborate with, say, the
(17:20):
previous years?
Because that will.
That's what they'll base theirvaluation on, that data.
Um, increasingly, individualbuyers are requesting this
information.
Because the banks arerequesting this information.
They want to see up-to-datefinancial information before
they say you know, we're goingto lend you a million quid or
whatever it may be.
So this, this is, this is, Ithink, is where it's going to go
in the marketplace.
(17:41):
I think you won't be.
It's hard to sell a dentalpractice at the moment.
You make it a lot harder if youdon't have this information to
hand.
Okay, um, and for a buyer,they'll say well, if that
information is not there, you'llthink you know what, forget it,
I'm not gonna do it, I'm notinterested, um, it's just, it's
too many risks, too manyunknowns.
So you need to be transparent,you need to provide this
information.
(18:01):
So, as I said earlier, in thisclient climate, buyers and
lenders want to see anup-to-date and accurate history
and don't put your practice onthe market, certainly if you
don't have the annual accounts,and ideally you want the last 12
months management information.
So when I say last 12 monthsmanaging accounts, everything
should be on the thing.
Now, if you're running apractice, you should be having
(18:22):
your books done every month.
Okay, on something like zeros,quick books.
So the bookkeeping's done, okay.
If you're not doing that,that's the first step before you
even get to the point ofthinking about selling in
practice.
Get yourself, get yourself anorder and again, we can help you
there.
Now, how can you get the bestvaluation?
Um, again, before you put it onthe market, you need to think
(18:44):
about how you can do, what youcan do to improve your valuation
.
Now, if you've got the managinginformation, you'll be able to
see trends, okay, and you needto think okay, are there things
that I can increase turnover,could I change pricing, can I
increase the profits?
But similarly, you might think,well, actually are there areas
that I can reduce costs, such asmaterials or utilities and that
(19:04):
type of thing?
And so, again, we can help.
We help clients join our buyinggroup where we help people save
money on the materials, utilitycosts, all those types of
things.
In addition, you want to havestaff contracts in place.
You need to make sure everyonehas a contract.
It needs to be very clear thatwhat they're getting paid, what
are they being paid for, okay,um.
So I think that's reallyimportant and increasingly now
(19:27):
what we're doing is, when we doa valuation of a practice, we're
using last 12 months data,we're hooking up, we're gaining
access to um zero for the clientor quickbooks for the client,
and then actually, from thoselast 12 months data are able to
provide an up-to-date valuationof the practice based on the 12
month data, um.
So we'll get an ebitda for theclient and then, actually, from
those last 12 months data areable to provide an up-to-date
evaluation of the practice basedon the 12-month data, um.
So we'll get an ebitda for thelast 12 months based on the
(19:49):
information sitting inquickbooks or zero, and that
means that information needs tohave been done properly,
accurately and up to date.
If it's garbage in, then theresult will be garbage out.
So that's an essential aspect,um, but that will then give you
an accurate valuation based onthe current marketplace.
Um.
And I think and the last pointyou've kind of pushed here, dan
it's not just a sales brochure.
(20:10):
You want to talk about thatfrom a bank's perspective yeah.
Speaker 2 (20:14):
So we, when we look at the figures because sometimes
I see we, you know, work on thefinance side we we get sales
figures in from from otheragents and you know we look at
that and we try and look at howa bank would look at the
financials and the EBITDAfigures and the add-backs that
they've done.
And sometimes what is beingadded back probably is not right
(20:37):
and it doesn't get to the rightfigures, how a bank would look
at those figures really.
So it's really sort of lookinga bank would look at those
figures really.
So it's it's really sort oflooking at.
When we look at the thesefigures, we're looking at how a
bank would present it and howthose figures will be again
relied on by the lenders.
Because, like your point, reallyin terms of the EBITDA stuff,
(20:57):
if, if the EBITDA is wrong andthe figures are wrong, it gives
the buyer the opportunity tochip away at your price again
because they can come back andsay, well, that's not actually
right, you've added back in thatfigure.
I don't think that's correctbecause that figure is going to
be there going forward.
So we try and look at very muchhow a lender would look at the
(21:18):
EBITDA figures and we try andget to that right figure.
So again, it can be relied onby the buyers.
They, they, will pay the pricethat you want for your practice
yeah, yeah, okay.
Speaker 1 (21:32):
So, as I mentioned earlier, I think, if you want to
get the best valuation, provideaccess to zero or QuickBooks.
Firstly, make sure you havezero and QuickBooks set up and
you're doing the bookkeeping,okay, and then provide access to
that data.
Becausebooks Firstly, make sureyou have zero and QuickBooks
set up when you're doing thebookkeeping, okay, and then
provide access to that data,because then we can review the
accounts, we can assess thequality of the bookkeeping first
and then ultimately provide avaluation based on the most
(21:52):
recent EBITDA, because if you'rethen using recent data, the
buyers can't argue and it'sgoing to be a lot harder for
them to chip away at the price,as dan mentioned.
Um, yeah, so I think thatthat's those.
That's a really.
Speaker 2 (22:07):
These are really important points I think it's
key getting the right sort of.
You know you want that rightebitda figure because if that's
driving the value of thepractice, you know that needs to
be correct and it needs to bewith the right information.
So Because if you're puttingdata in that's two years old,
you know how do they know whatthey're buying.
You know the lenders are notgoing to rely on it because they
(22:30):
won't lend.
So you're not going to be ableto sell the practice and
obviously it makes it opens upopportunities to say to chip
away.
And I think a few times.
You know if all your accountsare not up to date, they'll chip
away at your price.
If there's items in thepractice that need a bit of
refurbishment, they'll chip awayat your price.
(22:52):
So what you're trying to do iscreate an area where you've
covered every point that you canso that the price that you want
for your practice you're goingto receive.
Speaker 1 (23:03):
Yeah, agreed, agreed, okay.
So then specialist advisors whodo they need Dan?
Yeah, so.
Speaker 2 (23:12):
I think yeah, an accountant.
Speaker 1 (23:15):
Got one here sitting here.
We've been doing it 20-oddyears.
There's not much we haven'tseen.
We're very much a digital-firstaccountancy firm, so
everything's on Xero orQuickBooks.
We use all the latesttechnology and any client that
we have we strongly encourage tobe on those types of platforms,
because that then can help youmake sure that you have accurate
(23:36):
accounts, because then, if youget accurate accounts, you can
have an accurate valuation andtherefore ultimately hopefully
get the price that you deservefor your practice.
Ok, so that's my hard sell.
Who else?
Speaker 2 (23:47):
Yeah, the sales agent .
So obviously it's Samira.
We can undertake that work foryou as well.
We've got experience in thedental market and, like you say,
we've got an accountancy firm.
We've also got a financebrokerage as well.
So you know we've got a lot ofexperience in terms of the
sector.
So obviously we can give youthe information that you need.
(24:08):
The solicitor's point is quiteimportant as well, because there
are solicitors out there thatcould be cheaper than dental
solicitors.
But what you'll find is thetransaction will probably take
longer because they won'tunderstand what they're doing.
So you may pay slightly morefor a dental specialist
solicitor, but they're certainlyworth paying.
(24:29):
And in terms of the financebrokerage side of things, again,
what we you know we've we'vegot plenty of buyers out there
that are looking.
You know we speak to them everyday in terms of what they're
looking for, in terms ofpractices and and obviously we
will do like a pre-assessment ofthem of what they can afford.
So that helps in terms of sortof cutting down on time wasters
(24:50):
where people are looking at thepractice but probably can't
afford it.
Speaker 1 (24:56):
Sure and yeah, right, and I think that's important.
When we as a finance brokerage,we will always vet buyers okay
to say, well, if they want tobuy a million-pound practice,
but they can only afford a halfa million-pound practice, we
won't even put that type ofbuyer forward.
Okay, yeah.
And in addition, I think we'vegot so much experience in that
finance side of things, I thinknow it's important to realise
(25:20):
that you need buyers who havegot the funds to do it.
Otherwise it's a waste of time.
Now in our database we have adatabase of about four and a
half thousand uk dentists, okay,who we email regularly, um, so
we have a big reach.
When we're sending out anyparticular details about a
practice, um, we get a goodresponse usually from from such
(25:41):
things okay, so definitely, uh,uh, you need specialist advisors
, um, so do you want to coverthis?
Speaker 2 (25:50):
that slide down yeah, I think a lot of this stuff is
is what we spoke about, isn't itreally?
In terms of the experience thatwe had within the sector.
So, see, you know we've gotpractice, sales, finance and
accountancy.
So, you see, me was very much,you know, geared up to help
dentists in the market, really,and so we've got many years
(26:10):
experience.
Like you said, you've got 20years.
I've got 20 odd years and thennigel's got slightly more.
But, like I said, we've got abig reach in terms of, you know,
the network that we have.
You know we, we've got a lot on.
You know, we reach out to a lotof people in terms of linkedin,
(26:31):
um, you know the, the emailsthat we we send out.
So we've got a lot of peoplethat we we can reach out to, to
to take any sale forward.
And you, you know theinformation that we're preparing
for clients is information thatwe want to receive in terms of
for the finance, because workingwith the finance team is that
(26:51):
you know, if I sent, say toNigel, if I sent him, you know,
2022 accounts for a practicethat I'm looking to sell, I'd
imagine he would come back to mequite strongly and say that
this has not been packaged inthe right way.
So what we're trying to do interms of the packaging is
everything that's going out ishow we would want to see it
(27:12):
coming through, and making surethat we're covering off all the
points that we need.
So, one, you can sell thepackages quickly and, two, know
the buyers are able to to raisethe finance that they need,
because you know, if they can'traise the finance unless you
find those cash buyers which aregreat out there, but you know
that they will need a banksupport and they need all that
(27:34):
information to take that forward.
Speaker 1 (27:36):
Sure, and I think, if I give you my own experience,
as I said earlier, we own dentalclinics ourselves, we've sold
dental clinics ourselves, andthe way we've always done it is
by making sure we haveup-to-date management
information, making sure that wehave everything aligned already
and then, once we get to thatpoint, we can sell.
Okay, um, now you might haveall that ready.
(27:58):
And my view is if, in mypersonal opinion is, you should
always be ready to sell yourpractice, okay, um, because you
never know who might comeknocking on door, on your door,
with a, with a big check.
Therefore, have these thingsready, have the management
accounts, have the cqc paperworkready, have the leasing ready,
all these type of things.
Get.
Get yourself organized, okay,because you just don't know
(28:18):
who's going to knock on the door, what the opportunity,
opportunity that can come aroundto you.
Okay, so we have, we cancertainly help in that respect.
Um, what type of information dothey need, dan?
Speaker 2 (28:31):
yeah, so this is, I suppose, going through
everything that we we would need.
So, obviously, the last threeyears practice accounts, um, and
obviously having the, the pnlin there would would be great.
Obviously, the, the access tothe online, online bookkeeping
this is something that we'rereally trying to push because we
can then give real time sort ofvaluations on the practice.
(28:51):
We're using the last sort of 12months data, which would be
useful.
Obviously, that sort of feedsinto the management information,
management information.
Or see if you've got an nhscontract.
You know people will want tosee that you know the contract's
performing.
You know that you're up to dateon your udas.
Again, the, the one I looked attoday, they had an nhs contract
(29:14):
but they didn't send any nhscontract details, which is quite
a key part to the application,really.
So it's, it's these type ofthings.
You know the patient plan.
If you've got a patient plan inplace, you know, yeah, who's
using it, how many people usingit, um, staff breakdowns, like
you were saying in terms of that.
Have they all got theircontracts?
(29:34):
What are they being paid?
You know how much everyone thatworks in the practice.
You know you need to understandwho's getting paid and when.
Obviously, cqc registration.
Most of that should be up todate, and then any other
relevant information.
If there's certain things interms of your practice that
people need to know, so thesequestions don't come up later on
(29:57):
, you know, let us know andobviously we'll build that into
the report because, again, it'sjust trying to make sure that
everything's covered off in thatinitial application.
Speaker 1 (30:06):
Really, okay, cool.
So how do?
How do people help?
How do we help people dad?
Speaker 2 (30:16):
yeah, so they can just reach out to me.
So if they want to have a chatum individually, um free of
charge, in terms of their, theirpractice and what they want to
do going forward, these are mycontact details.
They can either drop me anemail, you know, give me a or if
they want to book a calldirectly with me at a time
that's convenient to them, thenjust use those links on there
(30:37):
and then they can book a slot.
Speaker 1 (30:39):
And so we'll be happy to help and have a chat.
Sure, if you go to thesamaracouk website, you can see
Dan's profile there.
You can book a time, a call,with him.
Alternatively, you want to booka call with me?
I'm happy to have a chat aswell.
Um, and as I think, just to kindof wrap up today, I think it's
(30:59):
all about planning andorganizing yourself and having
the conversation, um, withsomeone like ourselves to help
you.
Um, we're there to support you.
We're there to support you toget the best kind of deal
available that may be out there.
Um, and it's also we're thereto support you.
We're there to support you toget the best kind of deal
available that may be out there.
And we're also there to adviseyou, to say, if we think it's
not a good deal as well, okay,and to hold fire.
(31:19):
Or maybe it might be a coupleof years down the line and your
practice isn't quite right.
We'll tell you what you need todo to change.
This is what you need toimplement.
Do X, y, z, and then we canhelp you.
So, um, we're here to helpcontact dan or contact myself,
and, uh, we'd be delighted tohelp you.
Speaker 2 (31:39):
Okay, so, and just sort of one other point, if
everyone you know, we spokeabout material costs and we
mentioned the buying group.
Um, if anyone wants to join thebuying group, it's free of
charge to join.
Um, and we've got loads ofcompanies on there.
So we've got a company thathelps with cqc, we've got a
consumables company on there, um, we've also got a patient plan
(32:00):
um company on there as well, andsome that helps with utilities.
So, um, if, if you want to lookat your costs and to help
increase your bottom line, likelike you're saying, aaron, you
know it's a bit of a running, soif you can start getting that
done now, um, yeah, just again,reach out to me on that.
Speaker 1 (32:15):
I'm happy to drop the details through to you, sure,
and I think just on theaccounting side of things.
Lastly, if you're not on aplatform like zero, if you're
not getting bookkeeping doneevery month, you don't have
up-to-date information.
Um, firstly, I would stronglysuggest you did, okay.
And then, secondly, if you needsome help with it or anything,
just reach out to me.
(32:36):
Me and my accounting team cancertainly help and put some
structure and organisation intoyour finances, which will only
help you, not just for selling,but just generally for your
practice, for your taxes, foreverything.
Okay.
So we're here to help and, onthat note, we've been talking
about 30 minutes, or just over30 minutes.
Um, I'd like to say thank youto everyone.
If there's any questions, we'llhold fire a minute, because I
(32:58):
know there's always a slightdelay.
There might be a question ortwo that may come through, any
final thoughts from you, dan.
Otherwise, if we wait for anyquestions, otherwise we'll end
there.
Speaker 2 (33:07):
No, just to say if someone obviously sometimes on
this forum people don't want, soyeah, if they just want to
reach out to us directly, we'remore than happy to have a
conversation with them and sayit's a pre-initial conversation,
so just reach out to us, sure.
Speaker 1 (33:22):
And finally, I will be.
This is all recorded.
I will be sharing this video onYouTube and through our
database as well, so you canalways watch this again or share
it with anyone you want to aswell.
Okay, so thanks very much.
I don't have any questions thisevening, which is fine, and
have a lovely remainder of theevening.
Thank you, good night.
See you later, bye, bye.
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