THINKING BUSINESS
a blog by Chris Barrow

Dental practice for sale - £26,000


A message from a former client this week, who sold their practice recently.


"Thought you might find this interesting…


Our accountant is starting to retire and go through his paperwork - and gave us this as he no longer needs it!


It was the valuation done when we bought the practice 30 years ago - essentially we (the associate and future practice manager) were buying from the owners.


Never mind the actual figure at the bottom, I thought it was interesting the parameters used to decide the value and worth of the goodwill.


Has anything really changed in 3 decades?


What parameters would you add in now if you were trying to work out how to assess a business?


Anyway, thought it might make you smile and feel free to use if you find it useful!"


Of course, what we know now is that the sale of a practice involves a number of stepping stones:

  1. Initial valuation (either by an independent valuer or a corporate acquisitions manager) - simply based on a multiple of adjusted EBITDA, taken from the audited and/or management accounts;

  2. Due diligence - an ever-more complicated and thorough process of analysing what is really going on - tantamount to a modern-equivalent of this accountant's list of parameters;

  3. Final offer;

  4. Weeks and weeks of frustration as the lawyers, accountants and bank play tit for tat with the paperwork;

  5. The deal is done and you now have the hugely stressful job of telling everyone and introducing the new owners;

  6. Integration - both you (if you stick around) and the team learning to live with the new owners (expect high staff turnover in the first 2 years).

Back in 1992 when this business was acquired for £26,239.80, I suspect that the process would have been more archaic but perhaps simpler.


I doubt that technology has made the experience any more streamlined or enjoyable.

969 views0 comments