If you have decided to sell your dental practice, you may be questioning what might happen to the rest of your in-house staff. The status of everything under the business can affect its saleability. In this article, we will discuss the employees, timing, costing, and how they could affect the sale of your dental practice.
On Current Employees
When you find a potential business buyer, there are two points to note:
- Your current employees are not part of the automatic transfer of business.
- There is a chance that your buyer would want to ensure that they buy your business with the current employees to protect its goodwill value. If this is the case, expect them to negotiate that the employees agree to stay in the company even after the transfer.
To prepare for this scenario, you can do the following:
- Ensure that contracts of all employees, whether associate dentists or self-employed staff, are up to date.
- Ensure that other essential company documents, such as employee contracts, handbooks, health and safety protocols, and other guidelines, are updated and ready for transfer at any time.
Preparing these documents in advance could create a positive impression about your business and make the transition smoother later.
Time is an essential element in any purchase. In a typical dental practice sale, the negotiation, transaction, and transfer take around six to eight months. If you do not want the transaction to take longer than this, preparing all the necessary paperwork and other requirements in advance can keep you on schedule.
The usual cause of delays is sudden concerns with the LATs (Local Area Teams). For instance, some LATs may not issue a contract variation until they receive an application to CQC (Care Quality Commission) in the buyer and seller’s name. Most LATs will also require 28 days’ notice to vary a contract.
One of the primary concerns of any buyer or solicitor is the value of the dental practice. The valuation of a business you built is not easy. However, you need to come up with a deal that reflects the business’ success throughout the years.
Usually, the rate is a fixed fee based on several factors, such as the existence of NHS (National Health Service) contract, the types of properties, and if there are many sites involved in the discussion.
The fee range can vary from one business to another, but to give you an idea, it could range from £5,000 to £15,000—excluding VAT and other fees..
Deciding on a price is more than summing up your investments. It could also include other disbursements, like landlord fees, indemnity policies, bank fees, and so on. If this is your first time, consider seeking professional assistance so you can include all essential things in your cost.
Selling a dental practice could be a good business choice, but it can be chaotic if not properly managed. It is important to have an efficient sale and purchase process by ensuring everything is in order and to prevent missing out on anything important.
Goodman Grant Solicitors would be delighted to work on your behalf. We aim to provide a friendly and high-quality service while ensuring we meet our client’s objectives. Our team can ensure that you have complete requirements and a reasonable cost to make the sale of your practice a success. To know more about selling or buying a dental practice, contact us today.