The Golden Age of the Micro-Corporate?
A very arbitrary definition (and one I just made up) - small groups with less than 25 locations.
Influencing Factor 1 - my inbox is busier than usual with owners asking for advice on the options for and methodology of selling their practice. As I have said before, such enquiries are usually born out of distress and my early questioning is to identify which stress I'm dealing with:
Financial - "I want to pay off divorce/tax/loans";
Emotional - burnout and mental health issues or "I simply want to see my kids grow up";
Compliance - "I've had enough of the threat of CQC, GDC, DLP";
Innovation - "I cannot keep up with all this new tech";
Covid - "after the last 12 months, I just want to get off the ownership bus";
Health - "my spouse/doctor is telling me to stop or my health will deteriorate";
NHS - "given what I'm hearing about the future, it's time to go".
There's a lot of distress out there.
Influencing Factor 2 - where are the biggest corporates? No noise from MyDentist or BUPA - Portman and Dentex slogging it out for the prettier private practices. In their Dental Review last week, Christies did a good job of surveying the buyers (page 4) and goodwill values (page 20). The big boys don't seem to be chasing the lower-hanging fruit.
Influencing Factor 3 - I've seen a surge in micro-corporates. Former single site owners who have the hunger and the drive to move beyond:
Streamline - make what they already have easier;
Stretch - realise the full potential of what they already own;
Spread - look for that very same low-hanging fruit and buy additional locations, adjacent to their original site.
Influencing Factor 4 - younger dentists who want to buy their first practice are finding it hard to raise the funds to match the prices expected by the vendors. In fact, I'm going to suggest that a combination of owners keen to sell and micro-corporates keen to buy is keeping goodwill values high (and the independent valuers happy) - and possibly pricing some of the younger dentists out of the market - it's a bit like first-time buyers in holiday areas being priced out by those seeking a second home.
Combine all of these factors and we enter a golden age for the micro-corporate. Currently big enough to make a difference but small enough to retain their entrepreneurial spirit.
Of course, there comes a day when the micro-corporate become the mid-sized corporate and all of the familiar signs of bureaucracy march in (FOMM, middle managers, box-ticking) but, for now, the micro-corporates are making waves in the marketplace and they are agile.
I'm still working every day with those individual owners who want to streamline and/or stretch their existing business - but I have to keep marketing to replace those who are selling. Most of my clients end up pretty enough for Portman or Dentex - it's the thing I do.
I'm fascinated, however, to be working with some clients who aspire to become micro-corporates themselves - guiding them on that pathway, reviewing potential purchases and showing how important is is to build strong management teams.
It's going to be an interesting next few years - again.