Five practical steps worth reviewing before a future sale

If selling your practice is something you may consider in the future, even if it still feels several years away, there are a number of practical steps worth considering now.

Many of the factors that influence value, buyer confidence and transaction structure cannot be addressed overnight. The earlier these conversations take place, the more options are typically available.

1. Speak to your accountant

One of the most important early conversations should be with your accountant.

Historically, many practice owners and their accountants have understandably focused on reducing tax liabilities by minimising profits wherever possible. However, if a sale is on the horizon, even several years away, it may be appropriate to review whether that approach remains aligned with your longer-term objectives.

Buyers and lenders place significant weight on profitability when assessing value and funding opportunities. You may also want to consider how the practice's financial performance would look with less reliance on you personally, particularly if reducing owner dependency forms part of your longer-term exit strategy. Equally important is obtaining specialist advice on the most tax-efficient exit strategy, including considerations such as share sales versus asset sales, surplus cash extraction and wider business structure planning.

Good tax planning often requires time. The earlier these discussions take place, the greater the opportunity to consider the available options.

2. Obtain a practice valuation

Many owners assume there is little value in obtaining a valuation until a sale is imminent.

In reality, an indicative valuation from a specialist dental practice valuer can be highly informative, even if a sale remains several years away.

Understanding the current value of the practice can help inform retirement planning, investment decisions and future business objectives. It can also provide valuable insight into the factors that may influence future value.

Importantly, some owners discover they are closer to achieving their objectives than they initially thought.

3. Review the property position

Property arrangements are often overlooked until a transaction is underway.

If you own the freehold, it is worth considering at an early stage whether you intend to retain it and grant a lease to a future buyer or whether you would prefer the property to form part of the sale.

If the practice occupies under a lease, it is sensible to review the lease terms well in advance. Matters such as lease length, rent review provisions, assignment provisions and landlord requirements can all become important during a transaction.

Issues identified early are generally far easier to address than those discovered during due diligence.

4. Get your paperwork in order

A significant part of any practice sale involves due diligence.

For sellers, this can become a substantial paper gathering exercise involving contracts, compliance records, employment documentation, corporate records, NHS information and a wide range of supporting documents.

The more organised and accessible that information is, the smoother the process is likely to be.

Practices that maintain good records often find due diligence considerably less disruptive than those attempting to locate years of historic documentation at short notice.

If you would like a flavour of the information buyers typically request, we would be happy to provide an indicative due diligence questionnaire.

5. Resolve historic issues

There is rarely a perfect time to deal with historic issues, but there is certainly a worse time, namely when a buyer has already begun asking questions.

Issues involving NHS contracts, employment disputes, regulatory matters, HMRC enquiries, landlord disagreements or other unresolved concerns should ideally be addressed before a practice enters the market.

Many of these issues are entirely manageable. The challenge is that once a transaction is underway they can become distractions, delay completion or create unnecessary negotiating points.

Addressing them early allows owners to retain control of the process and present the business in the strongest possible light.

Preparing for a future sale is rarely about making dramatic changes overnight. More often, it is about putting the right foundations in place early enough to give yourself flexibility, maximise options and ensure that when the right opportunity arises, you are ready.

Need help preparing for a future sale?

At Buxton Coates, we regularly advise dental practice owners on practice sales, acquisitions, employment law, compliance and wider business matters connected to succession planning and future growth.

In many cases, the most valuable conversations take place long before a practice is formally marketed. Early preparation can help identify opportunities, address potential issues and ensure that when the right time comes to sell, you are approaching the process from the strongest possible position.

Whether a sale is six months away or six years away, the earlier these conversations start, the more options are usually available.

Whether you are actively considering a sale, planning for retirement or simply want to understand what your future options may look like, our specialist dental team would be delighted to help.

To discuss your plans in confidence, please don't hesitate to contact us: 0330 088 2275 or email  info@buxtoncoates.com.