Feb 21, 2023

Maximising Value in Mergers and Acquisitions: Key Considerations

If you’ve built up your dental practice over several years, you’ll want to see your input and effort rewarded when you sell the business. At Pluto Partners, we use a relationship-based approach to ensure the best possible deal for practice owners.

It’s easy to assume that any potential buyer will see the toil that’s gone into getting your practice this far, but when valuing a business, a lot goes into determining how much you can expect to receive.

Ahead of the sale, you should ask yourself what you can do to increase the value of your business while doing everything to ensure it’s an attractive prospect for buyers.

Here are some of the key considerations associated with maximising value in dental mergers and acquisitions.

Understanding the Factors That Influence Value

When selling any business, it needs to be valued. To work out the value, we’ll look at your turnover, the value of any NHS contracts, the value of Units of Dental Activity (UDAs), and the outgoings for the practice, which might include lab costs, wage bills, equipment, rent etc.

The overall value can also depend on the following factors:

Identify Opportunities With a Gap Analysis

Before putting your practice on the market, we’ll need to ensure that it meets its business objectives. If your practice isn’t performing as it should, a gap analysis will reveal the areas of opportunity.

At Pluto Partners, we can help assess the potential areas for improvement. Every dental practice is different, and it’s not until we audit and assess the business as it is that we can spot the areas that should feature in your action plan.

With this in mind, it’s important to plan ahead when selling your dental practice. The earlier we’re involved, the more opportunity we’ll have to help you improve your practice value.

Look for Opportunities to Increase Profitability

When you increase your company’s earnings, you’ll see an even bigger rise in the value of your company. It might feel counterintuitive to put that extra effort into driving profits just as you’re about to exit the business, but by changing a few things, you could enhance the value of your proposition.

Effective solutions to boost turnover might include working on improving patient numbers, increasing the number of private services, and building up your treatment acceptance rates. You can achieve much of this through marketing and service.

But increasing turnover will only do so much for your practice value. One of the most effective ways to increase your profitability is to reduce your running costs. Spending less to deliver the same quality of service doesn’t necessarily mean that you need to cut corners. There may be operational inefficiencies that you can address.

A few ways you improve efficiency include:

Let Us Help You Maximise Value

At Pluto Partners, we can help you identify the ways to maximise value and plan your exit strategy. If you’re planning to sell your dental practice at any point in the future, get in touch to discuss.

Dr Dev Patel
CEO, Dental Beauty

Max is able to secure high quality practices/groups by building unique relationships with sellers. His preparation of sell side materials is one of the best in the market. Highly recommend Max and Pluto when looking to sell your business

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