HS Financial Services - Practice valuation – Embracing hidden opportunities within your business
Practice valuation – Embracing hidden opportunities within your business

Practice valuation – Embracing hidden opportunities within your business


A practice valuation is a document that provides information to the numerous stakeholders involved in a practice sale.


But why is a practice valuation so important, and how can this be used to help you get the most from your practice sale?


Practice valuation offers principals an aerial snapshot of their business as a whole and can be used to plan for financial goals. For example, say you aim to retire in a few years and want to ensure that the sale of your practice provides a certain amount of revenue. The initial valuation will make you aware of how much your practice is currently worth, identifying any areas that can be streamlined and improved in order to generate a higher sum at point of sale.


Areas to build on


There are a number of different areas you can build on in your practice to gain value. It’s worth remembering, however, that factors such as the time before you go to market, how willing you are to explore certain avenues post-sale and what your valuation goals are will come into play. All of these will impact the plan that is suggested to you by any valuation expert.


When performing a valuation, three key cost categories come under initial consideration. These are: your laboratory and material costs, your establishment costs (electricity, water etc.) and your staff costs. These three aspects are reviewed separately as a percentage of total revenue and can be used to measure how well you are currently operating, as well as if any tweaks or improvements can be made.


Following this, analysing your chair occupancy can also identify significant opportunities for growth. If you are currently only operating at 50% capacity, for instance, this should be explored and solutions suggested to boost operations and business value.


Introducing new services


One sure-fire way to improve your practice valuation is to offer new services. There are two areas of dentistry that are particularly profitable – orthodontics and dental implant treatments.


Clear aligner treatments can provide a wonderful opportunity for dental professionals, as it can be easily learnt and implemented. It can start generating a huge amount of revenue in a relatively short space of time.


Say, for example, you usually refer out three orthodontic cases a month. This would typically mean that you are missing out on £90,000 of lost revenue and £31,500 of net profit per year. Providing aligners will allow you to keep that profit within the practice – and that’s without the extra revenue that these treatments can bring through marketing activity to attract new patients and upselling to existing ones.


Dental implantology is, of course, not as easy to implement into your skillset quickly. Still, if you aren’t planning to retire or sell your practice for some time, this might be another way to significantly boost your revenue. You may also look to employ a dental implantologists during this period to fulfil this patient need.


Embrace opportunities that correlate with the needs of patients in your local area – if, for instance, your practice is in an affluent location but only offers NHS services, you could be severely curtailing its valuation potential. Similarly, if you are in an area with patient age groups that are particularly interested in cosmetic treatments, not offering these is also limiting your scope and the appeal of your business. It’s these changes that make a significant difference.


MediEstates works closely with the rest of the Henry Schein group to ensure that principal dentists can make the most of their practice valuations and reach their financial aspirations at the point of sale.


To find out more, please contact the team today.


For more information, contact MediEstates on 01332 609318 or

visit www.mediestates.co.uk



Posted by: Hannah Burton on

General Buyer Terms

This agreement is in relation to MediEstates Limited whose registered office is at 1st Floor, Pacific House, Stanier Way, Wyvern Business Park, Derby, DE21 6BF acting for and on behalf of our clients ("the Vendors"); and yourself (Buyer's Name) in relation for an introduction to a prospective sale of a business as a going concern. By registering through this agreement I agree to all terms set out below:

  1. Definitions
    In this Agreement the following terms and phrases shall have the following meaning unless the context otherwise requires:

    Dental Practice business providing dental care. This business is under the MediEstates Ltd sale terms.
    Confidential Information
    Means the actual Vendors identity and all confidential information in respect of the Business, including, but not limited to, any ideas, business methods, prices, accounts, finance, marketing, research, development, manpower plans, processes, market opportunities, intentions, design rights, product information, customer lists or details, employees’ details, trade secrets, computer systems and software, and other matters connected with the products or services manufactured, marketed, provided or obtained by the Vendor, and information concerning the Vendor’s relationships with actual or potential clients or customers and the needs and requirements of such clients’ or customers’ operations.
  2. Obligation of Confidentiality
    The Prospective Purchaser agrees to treat as confidential, information supplied by or on behalf of the Vendor in connection with the sale of the Business.
  3. Exclusions
    The obligation of confidentiality set out in clause 2 does not apply to:
    1. any information received from a third party who was legally free at the time of disclosure to disclose it;
    2. any information which was already lawfully in the Prospective Purchaser’s possession prior to receiving it from MediEstates Ltd on behalf of the Vendor; and
    3. any information which is in its entirety already in the public domain.
  4. Duties of Prospective Purchaser
    1. The Prospective Purchaser shall take such a reasonable security measures to protect the Confidential Information and trade secrets.
    2. The Prospective Purchaser shall not, without the prior written consent of the Vendor, permit any of the Confidential Information:
      1. to be disclosed, other than in confidence to its legal or professional advisors;
      2. to be copied or reproduced;
      3. to be commercially exploited in any way;
      4. to be used for any purpose other than in connection with the prospective purchase of the Business;
      5. MediEstates is registered under the Data Protection Act 2018. Upon Signing this agreement you agree to follow the legal obligations of this act to protect the details of the information supplied to you, with it no to be passed outside of the control of you the prospective purchaser.
    3. The Prospective Purchaser agrees to keep a record of Confidential Information received.
    4. The Prospective Purchaser will return to MediEstates or the Vendor all documents containing Confidential Information and all copies of those documents on demand at any time which are in its possession or under its control, and for this purpose the term “documents” includes computer discs and all other materials capable of storing data and information. The Prospective Purchaser agrees that such documents remain the property of the MediEstates on behalf of the Vendor.
    5. The Prospective Purchaser must not jeopardise or re-direct the sale under any circumstances.
    6. The Prospective Purchaser must not contact the Local Area Team or CCG regarding any practice sale, by any means of media unless written permission is granted from the Vendor.
    7. To carry out own due diligence on practice purchases and accepts that any information MediEstates has supplied is information provided by the vendor and is not responsible for its accuracy or completeness.
  5. This Agreement
    The existence of this Agreement and its terms are confidential and neither MediEstates nor the Purchaser may disclose anything about this Agreement or its subject matter or implementation to any person other than in confidence to their legal or professional advisers.
  6. Duties of Prospective Purchaser
    When buying Dental practices, finance is normally needed. Our organisation operated over more than one of the MediHoldings brand, by completing this from you agree that the information can be shared to our other organisations to avoid the need to register independently and provide the best possible service.

    MediEstates will refer you to the specialist dental lending team and MediFinancial who will contact the necessary banks, whom have preferential healthcare lending rates in some cases, to ascertain which funding is available to you.
    By signing this agreement you do not have to use any of the banks MediFinancial contact, it is just another service which we provide.
  7. Deposit for Dental Practice
    If you are interested in putting forward a formal offer in for a practice, once the offer is accepted there will be a deposit required to secure the practice sale which is dependant of the practice size. This deposit is held in a client account and will be returned to the buyer on completion of the practice sale. You the buyer, will be required to sign a deposit schedule which will cover the buyer and the seller in the event that the practice sale does not proceed.
  8. Changes to this Agreement
    Any changes made to this agreement must be authorised and signed by one of MediEstates Ltd Directors.
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