HS Financial Services - Valuations – not just for sellers
Valuations – not just for sellers

Valuations – not just for sellers

Investing in a dental practice is, in its purest form, the same as investing in anything else, be that a hedge fund, an ISA or a simple bank account.

Whatever the investment, it's unlikely that you would leave it unmonitored for several years without even thinking to see if its value had increased.

Most practice owners only think about valuing their business for a specific and particular reason – for example when considering selling – but a realistic, professional valuation can have many more applications than simply the desire for an immediate sale.

An annual valuation for example can assist with exit planning, even if that exit is some way in the future. It can also provide an understanding of what changes are required to increase profits in the latter stages of your career, giving time for any such changes to be made. It will also give comfort and confidence that the ultimate value of a practice will meet your needs and wants in retirement and also helps small groups to transition and acquire other practices which protects the whole business.

There are also many more insurance related reasons why an annual valuation can prove valuable. For instance, have you ever considered the impact on your practice should you suffer the loss of a key employee due to illness, accident or death? In the worst case scenario, this can turn a successful practice into a failing one and cause untold damage to the lives of the family and fellow employees left to pick up the pieces.

Take, for example, a practice that holds an NHS contract and relies solely on that income to keep the business running. If anything untoward should happen to the contract provider and the practice can no longer fulfil its obligations, the contract will be rescinded and the income will cease. However, the staff and the multitude of overheads to which the business is committed still remain and need to be paid.

And of course, the loss of a key person in a business applies equally to the private sector. A business that has been many years, even decades in the making, can suffer badly in such circumstances, with profits falling and increased workloads for the remaining staff.

Insurance providers have long understood the importance of protecting businesses from the loss of key personnel by offering insurance policies that provide an immediate lump sum to protect next of kin and the business itself from financial turmoil. Key man insurance is one such policy, designed to provide financial security when owners or key employees are unable to work due to illness (terminal or critical), accident or death.

This is just one example of an insurance product that will benefit from having up-to-date information when policies are renewed and an accurate valuation of the business, in this case, will ensure you have the precise level of insurance needed to protect your business.

For busy practice owners, having the time to undertake a valuation for insurance purposes can seem a lot like hard work, so having a broker do this for you makes good sense. Firstly, because it will be done in a timely manner, but also because it will be thorough and accurate and will ensure that should the worst happen you won’t be left short at a critical moment. At MediEstates we conduct a large number of practice valuations every year – of course many of these are for dentists looking to sell, but an increasing number are being produced for other reasons including insurance.

Ultimately, the right insurance cover is one that covers what matters to you most. But you also want peace of mind that your business can continue to operate both financially and culturally should the unexpected ever happen. An accurate, up-to-date valuation will help you keep on track when agreeing insurance premiums and help you plan the future of your business with confidence.
Posted by: Anne Barker on

General Buyer Terms

This agreement is in relation to MediEstates Limited whose registered office is at 1st Floor, Pacific House, Stanier Way, Wyvern Business Park, Derby, DE21 6BF acting for and on behalf of our clients ("the Vendors"); and yourself (Buyer's Name) in relation for an introduction to a prospective sale of a business as a going concern. By registering through this agreement I agree to all terms set out below:

  1. Definitions
    In this Agreement the following terms and phrases shall have the following meaning unless the context otherwise requires:

    Dental Practice business providing dental care. This business is under the MediEstates Ltd sale terms.
    Confidential Information
    Means the actual Vendors identity and all confidential information in respect of the Business, including, but not limited to, any ideas, business methods, prices, accounts, finance, marketing, research, development, manpower plans, processes, market opportunities, intentions, design rights, product information, customer lists or details, employees’ details, trade secrets, computer systems and software, and other matters connected with the products or services manufactured, marketed, provided or obtained by the Vendor, and information concerning the Vendor’s relationships with actual or potential clients or customers and the needs and requirements of such clients’ or customers’ operations.
  2. Obligation of Confidentiality
    The Prospective Purchaser agrees to treat as confidential, information supplied by or on behalf of the Vendor in connection with the sale of the Business.
  3. Exclusions
    The obligation of confidentiality set out in clause 2 does not apply to:
    1. any information received from a third party who was legally free at the time of disclosure to disclose it;
    2. any information which was already lawfully in the Prospective Purchaser’s possession prior to receiving it from MediEstates Ltd on behalf of the Vendor; and
    3. any information which is in its entirety already in the public domain.
  4. Duties of Prospective Purchaser
    1. The Prospective Purchaser shall take such a reasonable security measures to protect the Confidential Information and trade secrets.
    2. The Prospective Purchaser shall not, without the prior written consent of the Vendor, permit any of the Confidential Information:
      1. to be disclosed, other than in confidence to its legal or professional advisors;
      2. to be copied or reproduced;
      3. to be commercially exploited in any way;
      4. to be used for any purpose other than in connection with the prospective purchase of the Business;
      5. MediEstates is registered under the Data Protection Act 2018. Upon Signing this agreement you agree to follow the legal obligations of this act to protect the details of the information supplied to you, with it no to be passed outside of the control of you the prospective purchaser.
    3. The Prospective Purchaser agrees to keep a record of Confidential Information received.
    4. The Prospective Purchaser will return to MediEstates or the Vendor all documents containing Confidential Information and all copies of those documents on demand at any time which are in its possession or under its control, and for this purpose the term “documents” includes computer discs and all other materials capable of storing data and information. The Prospective Purchaser agrees that such documents remain the property of the MediEstates on behalf of the Vendor.
    5. The Prospective Purchaser must not jeopardise or re-direct the sale under any circumstances.
    6. The Prospective Purchaser must not contact the Local Area Team or CCG regarding any practice sale, by any means of media unless written permission is granted from the Vendor.
    7. To carry out own due diligence on practice purchases and accepts that any information MediEstates has supplied is information provided by the vendor and is not responsible for its accuracy or completeness.
  5. This Agreement
    The existence of this Agreement and its terms are confidential and neither MediEstates nor the Purchaser may disclose anything about this Agreement or its subject matter or implementation to any person other than in confidence to their legal or professional advisers.
  6. Duties of Prospective Purchaser
    When buying Dental practices, finance is normally needed. Our organisation operated over more than one of the MediHoldings brand, by completing this from you agree that the information can be shared to our other organisations to avoid the need to register independently and provide the best possible service.

    MediEstates will refer you to the specialist dental lending team and MediFinancial who will contact the necessary banks, whom have preferential healthcare lending rates in some cases, to ascertain which funding is available to you.
    By signing this agreement you do not have to use any of the banks MediFinancial contact, it is just another service which we provide.
  7. Deposit for Dental Practice
    If you are interested in putting forward a formal offer in for a practice, once the offer is accepted there will be a deposit required to secure the practice sale which is dependant of the practice size. This deposit is held in a client account and will be returned to the buyer on completion of the practice sale. You the buyer, will be required to sign a deposit schedule which will cover the buyer and the seller in the event that the practice sale does not proceed.
  8. Changes to this Agreement
    Any changes made to this agreement must be authorised and signed by one of MediEstates Ltd Directors.
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