IFA Business Phased Purchase

As the most common method for selling your Dental practice, this option is imperative for private focused practices over the £800,000 turnover mark to achieve a premium valuation. Smaller practices and NHS focused practices are equally split between the Phased and Immediate Sale options.

The phased sale refers to a time in between completion and receiving the full payment (Earn-out/ Tie-in), for your practice, which is often subject to achieving a certain level of performance over the earn-out or tie-in period. Given the shared risk and therefore reduced risk for the Buyer, often higher valuations can be achieved for your business.

In Dentistry, the typical earn-out period is between three and five years, with payment terms varying across the sector quite significantly, from being paid out equally every year, to being withheld until the final year. Normally 70-80% is paid on completion with the remainder being spread over the earn-out period, although similar deal structures can vary beyond this.

Typical targets include either practice or individual turnover targets plus inflation to be achieved every year. Some buyers offer additional bonus payments for performance beyond the initial targets which we often push for and help negotiate on your behalf to ensure you can get the maximum value for your life's work.

Most purchasers like the idea of the previous owner and themselves working in tandem to ensure a successful transition and strong business performance. In addition, many dental practice sellers enjoy being able to focus solely on their personal clinical work, while the buyer handles the compliance, HR, marketing, and financing side of the business operations.

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