If you own a dental practice that still includes NHS services, you've likely felt the pressure of a rapidly changing industry. With fewer associates willing to service NHS patients, many practices are considering dropping the NHS element altogether. However, before making that shift, now might be the perfect time to consider selling your practice. Here's why acting sooner rather than later could make all the difference.
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NHS Dental Services are Becoming Harder to Sustain
The dental industry is facing a well-documented shortage of associates willing to take on NHS work. The reasons are varied—ranging from lower remuneration rates to increased administrative burdens—making the NHS element less attractive for many dental professionals. As a result, more practice owners are considering moving towards private-only services.
But here's the catch: the more practices that drop their NHS contracts, the more difficult it becomes for those still offering NHS services to find and retain associates. This creates a snowball effect, where everyone rushes to shed their NHS obligations, potentially leading to a market flooded with practices looking to make similar changes.
A Shift Towards a Private-Only Market Will Impact Practice Values
Currently, practices offering a mix of NHS and private services hold a certain value in the market. NHS contracts can still be seen as a guaranteed income stream, despite the challenges in maintaining them. However, as more practices make the switch to private-only models, the market dynamics are bound to change.
When numerous practices drop their NHS elements, it creates an oversupply of private-only practices, putting buyers in a stronger position. This shift could drive down practice values, making it more challenging to sell your business at the price it currently commands.
Seize the Opportunity in a Changing Market
Now is the time to take action if you’re contemplating selling your dental practice. Starting the process now, before the mass exodus from NHS contracts, allows you to market your business as one of the few practices with an NHS component still in place. This makes your practice more attractive to buyers who may see the NHS contract as a unique selling point or an opportunity for diversification.
Selling a Practice Takes Time
Remember, selling a dental practice is not an immediate process. It involves valuations, negotiations, and finding the right buyer who aligns with your patient's needs and your business values. Starting this journey now means you can maximise your practice's value before the market becomes saturated with private-only practices.
Don't Get Caught in the Rush to Go Private
The landscape of dental practice ownership is changing fast. The trend of associates turning away from NHS work is likely to continue, pushing more practices to go private. By taking steps to sell your practice now, you avoid the rush and put yourself in a position to benefit from the current market conditions.
Need Help Planning Your Next Move? We’re Here for You.
At Retiring Dentist, we specialise in the sale and acquisition of dental practices. We understand the complexities of the market and will work with you to ensure you get the best possible outcome. Don’t wait for the market to become saturated—contact us today to start planning your future.
Purchasing a dental practice is an exciting yet complex venture, and due diligence plays a crucial role in making sure you understand what you're getting into. In the UK, the process can feel lengthy and drawn-out, with multiple legal, financial, and operational aspects to consider. However, by applying smart strategies, you can speed up the process without sacrificing thoroughness—saving both time and stress while ensuring you’re still making an informed decision.
Let’s explore how you can fast-track your dental practice acquisition while meeting all essential requirements.
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1. Start with a Well-Prepared Data Room
One of the main reasons due diligence takes so long is the back-and-forth involved in collecting documents. By creating a comprehensive data room, the seller can provide all relevant information upfront. This digital repository should contain:
Financial statements (e.g., profit and loss, balance sheets)
Patient data and metrics (patient numbers, demographics, retention rates)
Regulatory compliance (General Dental Council (GDC), Care Quality Commission (CQC) approvals)
Key asset information (equipment, technology, and goodwill valuation)
With this data ready from day one, you can review documents more efficiently, eliminating the need to chase the seller for critical information.
2. Conduct Parallel Due Diligence
In many cases, due diligence is carried out sequentially—legal first, followed by financial and operational checks. This creates unnecessary bottlenecks. To speed up the process, conduct reviews in parallel:
Legal: Your solicitor should review the property lease, employment contracts, and NHS contracts simultaneously with other processes.
Financial: Your accountant can begin analysing the financial health of the practice (revenue streams, debts, tax obligations) while legal reviews take place.
Operational: Assess the practice’s patient base, equipment, and staff contracts concurrently, ensuring that each expert works on their area in tandem with others.
This approach saves significant time by addressing all due diligence aspects at the same time, instead of one after the other.
3. Use Technology to Streamline Document Access
The traditional way of collecting documents and conducting meetings is time-consuming. Instead, take advantage of secure online platforms to share, access, and review documents in real time.
Cloud-based data rooms offer secure, centralised access to all necessary information.
E-signature tools help you quickly sign agreements and contracts without needing to wait for physical documents.
These tools not only save time but also enhance collaboration, ensuring all parties (legal, financial, and operational teams) can access information quickly.
4. Set Clear Timelines and Expectations
It’s easy for due diligence to drag out if there are no clear deadlines. Before the process begins, both the buyer and seller should agree on a strict timeline for delivering, reviewing, and finalising documents.
Create a timetable with firm deadlines for each stage of due diligence.
Communicate expectations clearly, including any consequences for missed deadlines (such as financial penalties or renegotiation clauses).
This kind of structure encourages all parties to stay focused and meet their obligations without unnecessary delays.
5. Focus on Key Metrics for Financial Due Diligence
Rather than conducting an exhaustive financial analysis, focus on key performance indicators (KPIs) and high-level financial documents that provide an overall picture of the practice’s health. This should include:
Revenue trends (especially the split between NHS, private, and insurance-based income)
By concentrating on these critical areas, you can quickly identify any red flags that require deeper investigation. This allows you to move swiftly without missing any significant financial issues.
6. Streamline Legal Due Diligence
Legal reviews can be time-consuming, especially when dealing with numerous contracts and regulatory checks. To expedite the process, focus on high-risk areas first:
Property leases or ownership: Ensure terms are favourable or transferable, especially if the property is a freehold.
NHS contracts: Review any NHS agreements and verify their transferability or renewal potential.
Key staff contracts: Pay close attention to employment agreements for the lead dentist, practice manager, and any staff members essential to the practice's smooth operation.
Once these high-risk areas are clear, you can review less critical documents at a later stage, preventing delays.
7. Engage Experts Early and Collaborate Closely
To avoid common delays, engage your professional team (solicitor, accountant, practice valuation expert) early in the process. These professionals should be familiar with dental practice acquisitions and capable of handling the specific regulations and financials of the industry.
By working closely and maintaining open lines of communication, you can:
Resolve issues quickly as they arise, rather than letting them linger.
Hold regular update meetings to keep everyone on the same page and ensure progress is being made.
Appoint a single point of contact or project manager to coordinate between your legal, financial, and operational teams. This person ensures that all workstreams are aligned and that any roadblocks are addressed quickly.
8. Automate Operational Due Diligence Where Possible
For operational due diligence, reviewing patient data, equipment, and staff contracts can be labour-intensive. However, using practice management software and digital tools can speed up this process significantly. These tools can automatically generate reports on:
Patient activity and retention
Revenue by treatment type
Utilisation rates for dental equipment
With automated reports, you can quickly assess the operational health of the practice and identify any areas that require further scrutiny.
9. Consider Conditional Contracts or Deferred Payments
If certain aspects of due diligence (like NHS contract transfers or CQC registration) are likely to take longer, consider using conditional contracts. This allows the sale to go through while these elements are finalised. You can include provisions such as:
Contingency clauses that allow adjustments based on final contract reviews or patient retention rates.
Deferred payments based on performance metrics or completion of specific regulatory checks.
These strategies allow you to move forward with the purchase while mitigating the risk of unresolved issues.
10. Keep Communication Open and Transparent
A common cause of delays in any acquisition process is miscommunication or lack of coordination between parties. To keep the process on track, ensure that clear, open communication is maintained at all times:
Hold regular check-ins with the seller and all advisors to ensure no one is waiting for information.
Flag potential issues early to prevent them from becoming major roadblocks.
Encourage transparency so both sides can address concerns promptly.
By fostering a cooperative atmosphere, you can resolve issues faster and prevent unnecessary delays.
Retiring Dentist's Thoughts: Speed Without Sacrificing Thoroughness
While due diligence in the purchase of a dental practice can be a lengthy process, using these strategies allows you to speed it up without cutting corners. By preparing early, using technology, focusing on key areas, and maintaining open communication, you can reduce time while still making an informed decision.
This ensures you take ownership of a thriving, compliant practice without the stress of prolonged due diligence.
By following these steps, you can streamline the process, protect your investment, and get your dental practice running sooner than expected—while ensuring all crucial aspects are covered.
