Selling a dental practice can be stressful, Dental Elite’s Luke Moore explains how to deal with deal fatigue
During what is essentially a stressful and often time-consuming process, it’s not uncommon for a buyer or vendor to experience what is known as deal fatigue, a condition used to describe a feeling of frustration, helplessness, irritation and general disillusionment during a dental practice transaction. The longer deal fatigue lasts for and the more a person falls out of love with the transaction, the more likely the deal is to fall through.
In most cases, though, deal fatigue doesn't become an issue and is dealt with before it has chance to develop into anything more serious, but as you can never be too careful it is important that you recognise where and when problems can occur, and how best to deal with them. The best way to do this is to think of a dental transaction as being like spinning plates – in order to keep them from crashing to the ground you have to keep an eye on what every single one is doing at all times, taking care to spin each one as required. It’s no different in a practice sale; as different aspects of the sale process begin to happen at varying speeds, it’s up to you and your support team to execute each element as needed.
Now, in a dental practice transaction there are as many as five elements to consider, all of which need to work in harmony with one another in order for the transaction to stay on course. These are the buyer’s finance, CQC transition, the NHS contract, the property and finally the contract/due diligence.
Where the buyer’s finance can get particularly tricky is that the chartered valuation tends to only have a short validity period. So if a valuation was conducted (which is a mandatory requirement for nearly all lenders) but the vendor wasn’t ready to exchange, the valuation could then expire. For the buyer this would not only result in having to redo the finance application, but would add an extra £2,000 to £3,000 onto the bill.
The CQC application can be equally as frustrating, though it’s mostly the process itself that most people get bored with rather than with the other party. Indeed, by the time you’ve got a countersigned in-date DBS, which can take up to four months to obtain, CQC have processed your application (10 to 12 weeks), and (if necessary) given notice to the NHS, which can take a further four weeks, you’ve lost the best part of four months. And that’s best-case scenario, because if there are discrepancies in the application and the process times out this will incur additional delays.
Due diligence can also cause delays, so if you’re a vendor ready to go to market, you must be prepared to complete due diligence within a four to five week time frame of the offer being accepted, otherwise you might find that you’re part of the deal fatigue problem.
It’s not always easy keeping five plates spinning at the right speed, at the right time, but with the right support behind you from an experienced practices sales and acquisitions agency like Dental Elite you can rest assured that deal fatigue won’t get the better of you.