122 - What to consider when selling a dental practice, with Wesleyan Financial Services and Abrahams Dresden LLP

yeah i think the main thing is really just it's just preparation so if they're thinking four or five years i'm gonna start to sell um it's well what can i be doing at this point to get ready um to put myself in the best position for a smooth process and i think there are a number of things but The most important will probably be the getting a head start on their due diligence documents.

So this is going to be things like to start thinking about do all the employees have contracts? Do the associates have contracts? Are they with the right entity? So if you trade as a limited company, are the contracts with the company and risk assessments, things like that, and service reports for equipment.

they need to be done fairly regularly.

So it's a case of start thinking now, if my fire risk assessment expires in six months time, get it renewed now and keep doing that when they need to be renewed.

So you don't get to the point when you've got a sale agreed and then you need to run and get all this stuff done.

So that really does streamline the process.

And another thing, which is probably the main delay factor that we see in transactions is when there's third party landlords involved.

so when you've got a leasehold and you've got a lease um over the property by the time you come to find a buyer nine times out of ten if they've got a lender that lender is going to require a 15-year lease so it's just you know kind of pre-empting that situation and speaking to a landlord you know four years before thinking about a sale for example and maybe getting in place an extension of I don't know, maybe a 20 year lease if you can.

So by the time it gets to the point of sale, then it's one less thing to worry about and it's done and it's in place.

And then some other points.

So making sure your CQC registrations are correct, all your financials are up to date, ongoing over the next few years.

So again, everything's ready to go by the time you're ready to market the practice.

One of the things you mentioned before was making sure that a practice has its contracts in place.

So do you actually, where you work, do you see instances where practices don't have contracts in place with their associates? And what is the implications of that during that sales process?

So you'd be surprised to know that it does actually happen where employees or associates actually don't have contracts in place.

It might just be part of the process where they've been employed there for 20 odd years and it's always been like an understanding and an arrangement or similar for the employees or the associates.

Now, it's always important to have this stuff in place, I think, especially when you're operating as a sole trader.

From a buyer's point of view, now, employees transfer over automatically on a sale through TUPE regulations, but self employed staff don't do that.

So they often need to either have their contracts novated or either a new one entered into with the buyer.

But if there's nothing in place at all to begin with, then it can cause issues because the buyer doesn't necessarily even know what terms things are on.

And again, it's just about streamlining the process to make sure that everything is in place because the buyer wants to buy the practice, knowing that they've got the employees properly engaged and on the right terms.

And the same with associates and self employed staff after completion, especially if they're fundamental to the running of the practice.