I’m minded to return once more to the subject of dentists selling their practices to corporates in a never-ending stream of social media announcements of “another addition to our family”.
Since my August newsletter article, questioning the economics of goodwill valuations and earn outs (which was kindly reprinted by Private Dentistry magazine last month, including the constructive comments made by Alan Suggett), I’ve continued to receive questions from the wider dental community:
- is this the right time for me to sell?
- which of the main players should I sell to?
- what can you say is my expectation of value, before I call the professional valuers in?
- can you help me to polish the silver before I sell?
Conversations I have had in recent months have made me realise that an important alternative may be lost here in the noise of bells ringing and party poppers popping in corporate HQs.
Previously I’ve made the point that, as soon as the word “sale” comes up, I’m searching for the distress behind it:
- Financial distress
- Emotional distress
- UOA and the tendering process
- have I missed any acronyms?
- and the pure pressure of being a business owner
Back in August, I asked the question “what if there isn’t any distress?”
That (and numerous conversations with people I respect; Colin Campbell, Tim Thackrah and others) had introduced the concept of what Colin calls “the 100-year dental business” and what Tim describes as “the self-managing dental company”.
If you don’t have to sell – you can have two things in place:
- a self-managing business – one in which you can either take a month’s sabbatical and/or spend one day a month meeting your management team (and the rest doing what you like, in or out of dentistry – ride your bike or become a business angel);
- A succession plan – because your company might last 100 years but the chances are that you won’t – and so we are going to have to establish what happens when you have either lost your marbles or have shuffled off this mortal coil.
So my work as a dental business coach is taking a very interesting new turn at the moment.
The “day job” is still helping clients to get to whatever next level they desire, whether it’s a new purchase/squat or an existing business at a glass ceiling.
However, a new community of clients are emerging – those who are not in distress, who want to carry on as the part-time CEO, the landlord and the investor in their business – but not necessarily as a clinician.
People who want to discuss the people and systems that will get them there – then, finally, their succession, whether it be to existing business partners, to junior clinicians, to team, or to family (kids in dentistry).
Some of the most interesting and rewarding conversations in my calendar right now.
There is no doubt that dental corporates continue to help a lot of people remove their distress on attractive terms – some of my best friends and clients have taken that path – I wish them well but they are then lost to me professionally.
I’m fascinated by the developing community of Principals who want to stick around.