CATEGORY 116 AUSTRALASIAN DENTIST PROPERTY Selling a dental practice is a significant decision that requires careful planning and meticulous attention to detail. Beyond the clinical and operational aspects, potential buyers often scrutinise various business elements before making an acquisition. In this article, we will explore a comprehensive checklist to ensure that your dental practice is well-prepared for sale, covering everything from ownership details to the cultural nuances of your practice. Clear practice ownership details: One of the first critical steps in preparing your dental practice for sale is ensuring that ownership details are crystal clear. Evaluate if any third parties are involved, as this could potentially complicate the sale process. Identifying and resolving such issues in advance can streamline the transaction and make it more attractive to prospective buyers. Lease considerations: For dental practices, location is the key, as most buyers often place significant goodwill on the geographical positioning of a practice. Ensure that you have sufficient time remaining on your lease or explore options for an extension. A secure and favourable lease agreement can enhance the value of your practice in the eyes of potential buyers. Rent payments and outgoings: Clearly outline the separation and obligations of rental payments and outgoings associated with the practice. Transparency in financial matters can build trust with potential buyers and contribute to a smoother transition process. Documented asset register: Ensure that you have a properly documented asset and equipment register for your dental practice. This is a crucial but often overlooked aspect of the sale process. Prospective buyers will appreciate a detailed and organised list of assets, showcasing the value they will inherit with the acquisition. Navigating the transition: A comprehensive guide to prepare your dental practice for sale By Dr Peter Hughes Normalise your accounts: Identify and extract personal expenditures from your accounts to present a normalised view of your practice’s financial performance. This step significantly affects EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) and can influence the perceived profitability of your practice. Contractor/employee agreements: Ensure that all contractor and employee agreements are in place and clearly defined. Terms and conditions, including details such as uniform allowances, should be documented to provide a comprehensive overview to potential buyers. Also ensure that leave entitlements are documented appropriately as these will be reconciled at financial settlement of the practice. Policy and procedures documentation: Compile comprehensive policy and procedures documentation. Many key dental acquirers inquire about this, and having a well-documented set of protocols in place showcases the professionalism and efficiency of your practice. Prepayments and rebate documentation: If prepayments have been made, ensure they are well-documented and can be normalised. If you receive rebates ensure that these can be quantified. Transparent financial records instil confidence in potential buyers and contribute to a smoother negotiation process. Up-to-date financial records: Keep your statutory accounts and tax records up to date and have current yearto-date management accounts available. This demonstrates financial stability and enables potential buyers to make informed decisions. Practitioner production reports: Make practitioner production reports readily available. These reports provide insights into the productivity and performance of individual practitioners within the practice, allowing potential buyers to assess the overall efficiency of the team and any levels of dependence on clinical providers. Website and social media maintenance: An up-to-date website serves as the initial reference point for potential acquirers. Ensure that your online presence accurately reflects the quality and professionalism of your dental practice. This is also true of any social media pages you manage. Having up to date posts is a reflection of how your overall business is managed and the value that is placed upon effective marketing. Practice culture: Articulate and describe the culture that exists within your practice. Culture can significantly impact the success of a transition, and potential buyers are increasingly interested in understanding the dynamics and values of the team they may inherit. Staff profiles: Maintain an up-to-date staff profile that includes key information about each team member. This comprehensive overview helps potential buyers understand the skills and qualifications of your staff, contributing to their assessment of the practice’s overall strength. Conclusion: Preparing your dental practice for sale involves a multifaceted approach, addressing not only the clinical and operational aspects but also the intricate details that potential buyers scrutinise. By meticulously organising ownership details, financial records, contractual agreements, and cultural aspects, you can enhance the attractiveness of your practice and facilitate a smoother transition for both parties involved. Taking the time to prepare comprehensively will not only maximise the value of your dental practice but also contribute to a successful, timely and seamless sale process. u Dr Peter Hughes
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