Have you got an exit strategy? – Luke MooreFeatured Products Promotional Features
Posted by: Dental Design 7th April 2018
Luke Moore, co-founder of Dental Elite, considers the importance of planning a successful exit strategy and what must be taken into consideration.
Whether you are at an age where retirement is on the cards, have future intentions to sell and move, or just starting out as a practice principal, it’s worth considering an exit strategy. Besides making good business sense, you can never be too prepared when selling your dental practice, as there are a number of aspects that require your attention.
Thus, while it may seem a bit excessive at first glance, you should actually devise your exit strategy at least five years before you intend to leave. Granted, it’s not always easy to do so as life can sometimes get in the way – not to mention that what you want today may not be what you want in several years time (and vice versa) – but in order to secure a smooth exit and gain maximum return, planning really is essential. It will also give you time to get all your accounts in order, identify the appropriate exit strategy and identify your personal goals for the future.
Indeed, in order to sell you will need to be able to provide accurate financial records evidencing the practice’s income and expenditure. If you plan on selling the business as a way of securing monetary funds for retirement, then that time can be used to implement strategies that will help to maximise turnover and profits. Advertising and branding can help with this, as can having a dental practice valuation from a specialist valuations company. When you choose Dental Elite, you’ll receive tips on how to maximise your practice’s potential, which in turn will help you to boost your profits.
An exit strategy will also force you to decide whether you want to sell the practice outright or stay on part-time as part of a deferred consideration deal. Admittedly, the eventual outcome may be outside of your control, but it’s definitely something to give thought to and plan. Especially if your intention is to depart immediately and settle for a smaller sum, as you may need to start your exit plan even earlier.
Of course, the better the planning, the more likely you are to achieve your personal and business goals. So if your heart is dead set on walking away from the practice and avoiding being tied into a part-time contract for several years after the sale, you’ll need to plan in advance to make that happen. Naturally, it’s best to contact a specialist dental acquisitions and sales agency that can help you to establish the most appropriate exit strategy that matches your objectives.
For optimal results, there are a few other golden rules you need to follow, as achieving a successful exit is as much about avoiding potential dangers as it is about doing everything correctly. One common pitfall that should be avoided at all costs is taking on fewer patients and reducing working hours too soon. All too often practice principals make this mistake, resulting in stagnation of growth and loss of income. As your profits decrease, so will the practice’s attractiveness to potential buyers and banks, as a business with falling profits is not a safe option to lend against.
That’s not to say that you can’t reassign clinical work to associates or recruit a practice manager to take on administrative duties but this will need to be done gradually over time. Likewise, surround yourself with a strong, highly skilled team that can be trusted to get on and do their work to a high standard independently. This will make the practice less dependent on you as you prepare to leave, strengthening the business and minimising the risk of a loss of confidence from patients.
In regard to your staff, be sure to look at the way in which your associates are remunerated in your exit strategy to create an accurate overview of your practice’s performance and potential. Official associate agreements will be needed as well to protect the goodwill of the practice and assure potential buyers that the clinical team plans to remain with the business for the foreseeable future.
With all this and more to give thought to, it really is never too soon to be thinking about an exit strategy. For professional help that will help you to achieve your long-term goals and realise your practice’s potential, call Dental Elite.
For more information contact Dental Elite. Visit www.dentalelite.co.uk, email firstname.lastname@example.org call 01788 545 900
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