Big decisionson 15th May 2018
Dr Paul Moore explains how taking a step back has helped him achieve a better quality of life
It has been a long journey from 1981 to 2017 as a general practitioner. It is one I have enjoyed, both clinically and as a self-employed ‘sole trader’. My first practice was in North Devon where I stayed for 15 years. Then moving to Ireland in 1998, I settled into a general practice in Galway city centre at Gate Clinic.
With Ireland’s first I-Cat and Cerec 3D system, operating microscopes in every surgery and a general dental practice offering dental implants, cosmetic dentistry, prosthetics, endodontics and sleep services we have endeavoured to provide a broad service to our community. Running the practice and a family of nine children has had its moments, and been demanding (both home and work) but enjoyable.
However, after 35 years at the helm I decided to explore options for an exit strategy. I am too young to hang up the boots completely, but my aim was to back away from the chores of the day and maximise my potential asset, the sale of the practice. I hope to continue at a lesser pace and reduced workload for the next years and stay healthier because of it.
Now three years after starting this process, I enjoy the working day doing the dentistry and looking forward to the relaxing evenings and weekends as well. So what options are there out there to explore and what points might you consider.
I want to share some of the broader principals and choices that a dentist can contemplate, and actions you might ponder. Probably the most important question is the timing of when to start this thought process. Procrastination and momentum are good friends, but each and both are rivals of rational thinking. The idiom ‘Fail to plan, plan to fail’ is the same when selling your practice as it is treating patients clinically. The problem with waiting until the year you want to hang up your boots, or you need to retire from sheer exhaustion, is at that point your earning potential and the value of your practice is diminishing. The decision to sell the practice you have nurtured for so many years is probably one of the most important decisions of your career.
Where to start?
You may consider various concepts:
• Selling your practice on the open market to another dentist
• Selling your share of a partnership to the other partner
• Selling your practice to a corporate body
You should also balance this with various questions:
• Why are you selling?
• What do you want to do next?
• What do you need?
Many of the comments and suggestions here are normal day-to-day exercises that you perhaps should be doing anyway. But in preparation for selling your practice it might be helpful to specifically re-evaluate the following:
• Accounts: Streamline your practice. Look at expenses with extra diligence. Your margins are related to the ratio of income to costs, so maximise the former but minimise the later. This you may be able to do yourself, but consider outside assessment and implementation of their recommendations. You get one chance to get this right so line those ducks up in a row and focus!
• Cash flow: Complete a three-year forecast for the practice and be honest. Your best guess is always only a forecast, but it must be able to back-up your assessment with historical documentation and clear accounts, and will be a huge benefit going forwards. I would recommend this is reviewed by your financial advisor and ask them to refine your best efforts.
• Compliance: Any purchaser will have a list of items they will want to see. Documentation and systems in place for any and all aspects of practice management will make your practice more attractive to any potential buyer.
Although not essential, I would recommend an independent opinion to act as a starting point, possibly two. A good broker will assess not only your last three year’s accounts, but will take into account your location, your equipment, your organisation and your competition.
Finding a buyer
You can market your practice yourself, or engage your broker to market your practice for you, but consider what do you want. A practice broker will be familiar with the market and may well have clients that match your needs. You may already have a preference planned.
Selling your practice isn’t just a question of achieving a sale price. You have nurtured your baby for many years, cared for your patients and worked closely with your team who have hopefully looked after you as much as you have them. When you are gone, you should wish to ensure they are all cared for.
Be aware there may be more than one potential buyer. Be prepared to say no and walk away. But be realistic.
I considered offers from three corporates and one private buyer. Finally, after 18 months we fell into deeper discussions with a corporate buyer. My point here is start this process before you NEED to. This gives you time to make this most important of decisions with clarity.
There are many variables you can discuss, but corporates will ask you to continue in the practice for two to three years to provide your guidance and local knowledge and protect their investment.
You should expect the larger portion of the sale value on exchange but will be asked to meet reasonable targets and work with your new ‘employers’ on a percentage of your income as an associate. You may even be able to negotiate improved terms if you agree to stay longer. It is after all your experience they are buying, your wisdom, your steering hand and your endorsement of the new owners to your patients. They want you to succeed so they can do so also.
The deferred payments of the final
portion will be dependent on your negotiated and agreed terms. Just as no patient is the same, no one formula will apply to all. Ask the questions!
• How will this transition affect you and your family?
• How will it affect your team?
• How will it affect your care for
The big day arrived and the ball was rolling. Twelve months ago I started talking with a corporate body that approached me and I liked what was being said. The offer was fair, and the terms and conditions were negotiated by both parties. We agreed easily on the Heads of Terms of the contract and engaged legal teams to complete contracts, terms and conditions, due diligence on the practice, warranties and limitations.
It took nearly six months to complete the exchange. I would be less than honest if I said this was easy, but everything was agreed and the time came to let go and allow the systems of a corporate engage with the practice.
It was weird at first, coming to work and not worrying about staff timetables, handing over the administration of the practice, letting the management team organise materials and suppliers, upgrading internal systems and the marketing and branding to name but a few of the tasks that I had previously had to do day to day every week, every month, every year. By the end of the first month I started to see the personal benefits:
I was home early (and even cooked the dinner!) I picked up the young one from school. The banking became a simple matter of one payment in my account and then my domestic expenses. The running of the practice was no longer my worry. I could enjoy the dentistry at work and could enjoy the new found time at home.
Now I may have a holiday and not incur costs of the practice while I am away. I have more time with patients to discuss the weather (usually damp or ‘soft’ here in Galway!) I don’t have to change the light bulbs or sort out the IT systems and servicing of the equipment. I didn’t have to call the plumber when the pipe burst last week.
Selling your practice is a uniquely personal decision according to your circumstances. But if you are in a position where you are thinking ‘shall I?’ My best advice is to think now, act early, seek professional advice at all stages… it is worth the extra costs? Like a good boy scout – be prepared…
If you wish any further information or list of points to consider, I have a ‘task list’ to share. Please do email me and I will forward information that I found helpful.