TOP 5 THINGS TO CONSIDER WHEN SELLING YOUR DENTAL PRACTICE

If you are looking to sell your practice, here are some important things to consider.

1. Get ready

Compile all leases, licences, loans and agreements for all equipment and stock that will form part of the assets to be sold with the practice.

Particularly with practices that have been running for a long time, it is not uncommon for some of these documents to have been misplaced. Take the time to try and locate all of them and if you’re not able to, contact the provider of that equipment or stock and request a further copy.

2. Employees and Contractors

It will be up to you whether you notify your staff in advance that you are thinking of selling your practice but it is recommended that you let them once a sale of business contract has been signed. This will allow you to confirm which employees wish to remain with the new owner or those who wish to move on. For greater clarity on your obligations to notify staff of the new owner, please review the national employment standards and each individual employment contract in relation to notification periods.

Also, make sure to locate your contractor agreements as it is likely that the buyer will want these transferred as well.

3. Patient Lists and Privacy

It can only be expected that any potential buyer will want to see as much information of your practice as possible in order to then make a considered decision as to whether or not to proceed with buying your practice. However, you have privacy obligations at both a federal and state and territory level to comply with. To assist the buyer in their investigations it is recommended that before you hand over any patient lists you have a sale of business contract signed that includes a due diligence period and a requirement that the buyer sign a non-disclosure agreement.

4. Lease

As many dental practices operate out of leased premises, it is important to understand how your lease details any transfer or assignment of lease. Even if you are only selling the shares in the company that owns the practice and the tenant is otherwise not changing, you will want to be familiar with your obligations to notify relevant parties. For example, it is common in leases that if more than 50% of the shares in the tenant company are sold, that will be considered an assignment of the lease which requires the landlord’s approval prior to selling those shares.

5. Equipment and Stock

Much like the lease for your premises, any equipment that you are using under a lease arrangement will contain provisions around transferring or assigning that lease. Take the time to review those leases and if needs be contact the provider to ensure that you understand the correct method for transferring or assigning those leases.

Also, contact your suppliers and HICAPS and notify them of your intention of selling the practice. Find out what is required to transfer or assign your agreements with them to the buyer, if possible. It may be that the buyer will need to enter into a new arrangement with those suppliers after settlement takes place. It is important to do this early on as some suppliers may take longer to respond to these types of queries than others.

Make sure to conduct a stocktake and to compile a complete inventory of all equipment being sold with the practice. While you will likely need to conduct a further stocktake closer to settlement, by doing an earlier stocktake you can make sure that you have a sufficient amount of stock to not only get to settlement but also so that the buyer is not left with an empty practice.

6. Other things to consider

In order to attract buyers, it is worthwhile considering the following as well:

- updating your practice’s website and social media accounts if you have not done so in a while;

- contacting your phone and internet provider and find out what the process is to transfer those accounts to the buyer;

- review your file management system and processes; and

- conduct an audit on all accounts to make sure that your books are accurate.

If you’re looking to sell your practice, please feel free to contact Catherine Wallace on 0409 923 426 / 07 5620 1129 or catherine@wallaceweir.com.au or Chelsey Grbcic on chelsey@wallaceweir.com.au to discuss your options.