Dentists Who Invest Podcast
Official Podcast of the Dentists Who Invest platform. Talking all things investing, money and finance with a dental spin. Have you ever wondered how you can grow your wealth and protect your hard earned money as a Dentist? We've got you covered. Featuring famous guests such as Andrew Craig, Edward Zuckerberg and Benyamin Ahmed we delve deep into EVERY aspect of finance to educate and empower ALL Dentists.
Dentists Who Invest Podcast
Do These Things To Make Your Dental Practice Exit Stress Free with Maja Thompson
You can download your FREE report on how you can avoid financial mistakes as a dentist using the link just here >>> dentistswhoinvest.com/podcastreport
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Selling a dental practice is more than just a financial transaction—it’s an emotional journey. In this episode, Maja Thompson from Henry Schein shares expert insights on navigating the complexities of a practice exit while preparing for life after dentistry. Many dentists underestimate the emotional impact of selling, but with the right strategies, you can transition smoothly into retirement without feeling lost or unfulfilled.
We explore the key steps to a seamless sale, from early planning and tax considerations to diversifying income streams for financial security. Maja also reveals how dentists can embrace new opportunities, hobbies, and even philanthropy to make retirement one of the most rewarding phases of life.
Finally, we break down the practicalities of selling, including due diligence, legal agreements, lease negotiations, and the increasingly complex process of transferring CQC registration. Whether you’re planning to sell soon or just considering your options, this episode is packed with essential advice to ensure your exit is as smooth and stress-free as possible.
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Disclaimer: All content on this channel is for education purposes only and does not constitute an investment recommendation or individual financial advice. For that, you should speak to a regulated, independent professional. The value of investments and the income from them can go down as well as up, so you may get back less than you invest. The views expressed on this channel may no longer be current. The information provided is not a personal recommendation for any particular investment. Tax treatment depends on individual circumstances and all tax rules may change in the future. If you are unsure about the suitability of an investment, you should speak to a regulated, independent professional.
Selling a dental practice is notoriously stressful. It's a toss-up between getting the best number and also not having the process drag on for too long. But guess what, no matter where you are whenever it comes to that process, whether it's long before or imminent, there's things that you can do today in order to make that as smooth as possible. I have with me today, on the Dentistry Invest podcast, mrs Maya Thompson. Maya works for Henry Schein, responsible for over 1 billion in practice valuations last year, and she's been in the dental industry for 10 years. She's seen those transactions happen firsthand, but are normally once in a lifetime for us dentists, and over the years she's picked up a shed load of wisdom that she can share with us today in order for us to benefit. So let's get into it.
Dr James:Maya, I know that you do this stuff day in, day out, but to us dentists, we only get to see it once in a lifetime. Tell me this, this is the first thing I'd love to ask In your experience and in your wisdom over the years, what would you say are the biggest things that us dentists don't account for whenever we reach the practice exit side of things, in terms of our emotions, in terms of our outlook in life, in terms of how this affects us in ways that we don't expect. The stage is yours. I'm all ears.
Maja:Yeah, no, it's great, james. I think that's a great question and I think, just kind of looking through the podcasts that you have done in the past, a lot of them are talking about the financial value of a business. And how do you value a business, how do you plan an exit? You know what do you do with the money once you've, once you've sold and which is super important, I mean, those things are, you know, somebody's life, lifetimes work. But really I think sometimes we neglect the aspect of what it means to the individual, and I've been in the business of kind of this kind of brokerage business for a number of years and it's so easy to get taken away with the transaction itself and forget that there's a person at the other end.
Maja:So I think one of the key things, that's this is usually a one-time experience.
Maja:There are serial entrepreneurs and they'll sell businesses and there are serial buyers and for them that will be like bread and butter and they will get used to the emotions that go with the ride of selling a business.
Maja:But actually doing it once in a lifetime I think is a really big deal because lots of business owners identify with that business. This is their lifetime work and I think that impact of going through the process of sale, even though the exit might be the nirvana that they're waiting for, the pot at the end of the rainbow I think it's not always a rainbow that kind of the transition journey. So it's really important to consider that even before selling the business, because what I've found is a lot of owners find themselves in the kind of the tsunami of the, the transaction and the process going on and they get towards the end of it and certainly past the end of it and they've sold the business and all of a sudden there's this huge void. What do I do with my time? What do I do when I've kind of left behind something that I've worked for all my life?
Dr James:And you know what you know. The more and more I have these conversations and I'm used to do this I still do do this, but I definitely did it in the past a lot more I used to futurize my success so much and I was like, okay, well, when I do this or when I achieve this, I'll be happy. Then it's okay for me to be happy. And any single I even know that's not true, because every single time I ascend some sort of summit in terms of success and hit some sort of height that I wish to achieve or achieve something, there's always the next thing.
Dr James:There's like this happiness and then there's a void right and X in a business is going to be exactly the same.
Maja:It is, it is, but you know, there a another psychological aspect to it.
Maja:Living in the moment, I think you know a lot of us don't live in the moments and actually enjoy it and the, the. It's almost like the success or the rewards are always in the future. So but that that's probably not what we're talking about today. But let's talk about that uh, kind of the, just the. I suppose the idea of it happening at the time. I think it's being able, in the same way that you visualize that success and you kind of think what will success look like, is then visualizing what will post-sale look like. I think it's super important.
Maja:Now, interestingly, a lot of sellers we're talking about majority of sellers will get to a certain age and they will then sell. So we're not talking about the transactions that are happening at a younger age where somebody might then buy another business and kind of flip that and continue to do it. We're talking about somebody realizing the value of their lifetime's work. I think that's also tied in with a transition in life. So talking about retirement, talking about slowing down, talking about what does that period of life look like? And a lot of people talk about retirement and get almost like that place that you work all your life to get to that point and most people certainly dentists will get to that.
Maja:You know the age where they're. They can potentially retire in their late forties, early fifties, early sixties, where they have another potentially 40, 50 years. You know of life to get through, so it's important to think about what does that post-sale life look like and what does you know? You still have the ability, you still have all the knowledge, you have the experience. Usually you have a lot of time, maybe not the same amount of energy, but you certainly can continue to contribute and that's not something that a lot of people think about. You know, and I think it's a really important aspect, making sure that you know they continue to be engaged, and I suppose as a society we give them the opportunity to be engaged if they want to I think two questions spring to my mind.
Dr James:I think the first thing and I don't know if this is something we can even quantify today, but in your experience of seeing these once in a lifetime transactions fairly frequently, so being able to observe how this affects people fairly frequently, whereas we only get to observe how it affects us in ourselves maybe once or a few times in a lifetime. So how frequent is this? How many times do people do just sail off into the sunset from your perspective, and how many times do people just come back for more or feel a bit listless afterwards? I don't know if we've got any data on that so much, but I'm interested to know what your thoughts are.
Maja:Yeah, I think a big driver of that would be age. You know what age the person is and actually you know starting up a practice if you've sold in your 50s it's quite difficult then say, well, actually I'm going to go and get involved in another one, but there's potentially capacity to then get involved as a clinical director somewhere else or an associate somewhere else or, you know, just continue to work. The most interesting thing is and I think we'll kind of get to potentially that process of due diligence and that latter process of selling a business is that that process can be deceivingly long. So I think sellers are not prepared for the fact that once you've agreed the sale, it can take months to get to the end point it almost feels like you know, I've agreed the sale, I've agreed the number.
Maja:Actually, you know it will happen fairly quickly and it doesn't. Sometimes it takes months, sometimes it can take two years and upwards and that's a long time to be in that exit mode. Now that process is so involved and so it can be very draining that you probably find that when people get to the end of that process they are utterly exhausted and I think if they never saw another document or legal document, they usually are at that phase where I just cannot wait to get this over the line and done and moved on, and you can completely understand them. I mean it's quite a tough process. But once you got past that and the money's landed in the bank and they're starting to kind of plan their life, a few months on people start feeling the void to kind of plan their life. A few months on people start feeling the void because you have had the whole life of working, you've had this buildup of selling the business and then you've got to the point where you have sold and then you know nothing or very little or much less.
Maja:And I think that that takes preparation, that takes kind of thinking about, and I think some of the things that, um, I wanted us to talk about today is that, the sense of loss you know, so you have had this thing that you have built up and then you, um, your, a lot of your identity is tied in with being that business owner and being, you know, the dentist and leading the team and usually the dentist leading the team and you know building something and that becomes your everyday.
Maja:That's how people address you, that's how people in your business address you, that's how your business partners address you, and you then kind of live that life where you're basically the top dog in your business and all of a sudden, once that's finished, you don't have a team.
Maja:You usually don't have a team around you. You are basically your own individual and your identity is no longer tied with the business. So and I think that takes a little bit of getting used to it and it's not something people think about because you spend a lot of time working, most people spend a lot of time working and most people spend a lot of time working. Most people spend a lot of time working and most people spend a lot of time with their identity tied around the business so that when they get to a point where they're no longer part of that business, the sense of that identity and you know what's my purpose, essentially, what's my purpose for the next 40 years is no longer tied to that business, and I think people underestimate what that means to them. So it's something to bear in mind, you know, while you're going through the process and thinking about the future.
Dr James:The second thing I was going to ask as well, which you actually kind of answered when we were talking just then, was what things can we do in the here and now so that we don't feel that sense of loss whenever we get there? I think it's just, I think a big part of that is recognizing that it's just not going to be the nirvana necessarily that you think it's gonna be, and maybe it's just about not putting so much expectations on that moment. And I feel for me you know, I've been in places before where, for whatever reason, there's a ton of stuff I want to do, but, for whatever reason, it just doesn't make sense to do it right now and I have to wait like a month, okay, and it kills me. I hate it.
Dr James:I hate that feeling of listlessness, I hate that feeling of not doing something, um, and I think that really, if you spend a lot of your time, that's the whole, that's that's what retirement is, in principle, right, okay, or sailing off into the sunset is, in principle, we don't do anything. So if you spend your whole life looking forward to that moment and then when you get there, you realize that actually it's really not you. You've invested so much mental energy and so much of your life looking forward to that moment when you could have just been enjoying things so much more in here and now. And I'm actually grateful for the times that happened to me, because it taught me to enjoy the moment here and now, and it taught me to realize that the journey is the result.
Maja:The journey is the thing that you enjoy, not the end absolutely, absolutely, absolutely, and and uh, but recognizing that, that you know if you're selling the, recognizing that that journey is due to end at some point. You know most people, I suppose, even if they had the stamina to run their businesses into the 70s majority of dentists don't, or very few dentists do. It's then deciding what are those things you know. You said you have kind of a list of things that you would want to do in your life. It's almost like jotting down the list of things that you wanted to do, wanted to try, and then looking at how do I put those things into practice and what do I do with my life afterwards? Do I have hobbies that I can spend more time in? Can I volunteer? Can I add the knowledge that I have, knowledge, experience? How can I share that and actually still continue to be engaged?
Maja:But be mindful of the fact that that's the transition in your identity for the future. So recognizing it and then being able to plan the kind of things that you couldn't do before because you were working. Majority of dentists spend majority of their time with their fingers in the patient's mouth, managing the team and all of those issues that arrive along the way, not having to do that anymore, but then being able to utilize those skills and being mindful that that's coming and how can I make the best of it. It's supposed to be some of the best, like most freeing times in life. You get to retirement. You generally don't have as many kind of personal ties Kids tend to have gone to university, if you have them. So you have a lot more freedom to experience those things and if the sale has been successful, you have the funds to do it as well.
Dr James:you know my, I guess the traditional logic is that we want to just get the biggest number as possible on sale or for dental practice, but that's not always a good idea. Am I right in saying that?
Maja:um, depends on how well you do the planning and the kind of what you do with. You have had accountants here. I'm sure that they'll tell you a big number is good and the bigger number is even better, and it's just how you plan, kind of your, I suppose, exit in terms of tax planning and preparation. So if that's kind of where you're going, I think in terms of that takes time. So if you're looking to, so one of the things that I would say to somebody if you're looking to sell, you start thinking about that fairly early on. So let's kind of play a scenario of somebody who is looking to sell in their early 50s, mid 50s or something like that, or late 50s, let's say in their early 50s, mid 50s or something like that, or late 50s, let's say in their 50s. I would suggest that they start planning in their early 40s because at that point, kind of having control of your business, knowing your numbers, knowing where your income is coming from, so you're kind of working from the top line you're then making sure that you're maximizing the revenue that you're bringing to your business. I talk about a dental business being like a chair, and if you have a chair that's sitting, is like on one leg and all of your income is coming from the NHS. It's not a particularly stable chair. But if you have a chair that has a number of legs, so you have private income, you have potentially plan income, you potentially have other sources of revenue aesthetics or things like that the more revenue streams you have, the more legs your chair has and the more stable it is. So that's really important. So it's kind of thinking about and you can start addressing that fairly early on. So that's really important. So it's kind of thinking about and you can start addressing that fairly early on. So that's one of the first things I would say that that revenue needs to come from different places so that it's a pretty stable business.
Maja:The other thing that's really important to consider is are you the only or the main contributor in the business? Because if you're then handing that business over to somebody else, you need to think about the fact that the other person or people have got to pick up your patience and if your patience are really tied to you and if majority of the revenue in the business is tied to you as the owner, it's really quite difficult to guarantee for the buyer that they would be able to pick all of that up, or pick all of that up securely. And even more if you look at corporate buyers. So corporate buyers tend to buy the business you then end up being tied in that business for a number of years. If majority of the revenue is with you and let's say you have a few associates and those associates contribute a smaller proportion, it's a very big risk on one individual.
Maja:So as you start preparing for that transition and selling your business whether you are doing it to an independent buyer or whether you are selling to a corporate you need to think about what's my contribution to this business and how much of this relies on me. So then, if you start in your 40s, you can think about your revenue streams. You can think about what proportion of work you bring in and then reducing the risk for somebody else in the future. And starting like that, if you think, if you're reducing your responsibility within the business, you could then be looking at when I exit this business, what could I be doing in this time that I am reducing my responsibilities now by handing those over to somebody else who will be either fulfilling the NHS contract or seeing my private patients, or whatever that might be. So you are reducing the risk in the current business, but you're also future-proofing kind of that thought process about what do I do with my time once I retire or once I exit.
Dr James:Interesting and I'm going to guess the actual sales process itself, as in the negotiation, is going to be an emotional whirlwind, at least normally, for most people.
Maja:Yeah.
Dr James:It can be. Yeah, no, no, no.
Maja:It can be. It definitely can be because I suppose let's talk about that going back to that time between, like your foot. So you're in your 40s, you are thinking about this lifetime work, you are getting that income to come from different avenues, you have a stable chair in your business, you are bringing in associates and you will then get to a place where you know you'll kind of look around There'll be your generation that are selling their business and then you'll start comparing your business to their business and they'll say they have sold for this amount or they've sold at this multiple or that multiple. And in your mind people tend to build up what's this number? That I'm working towards and in most cases you know dentists are aware of what approximately their number might be. But I suppose the most important thing is like, if you are planning with that number in mind, get a valuation. I think that's a great place to start because the valuation process itself will take you through the details of you know, your income, your costs, and it'll give you that EBITDA operating profit figure and then you'll be able to see kind of what your business is worth. Now it's really important to, I suppose, be realistic in that process. So and listen to the listen to kind of people that go through it all the time, you know. So we as a business, we value about 400 practices a year and over the last, I think, 15 years we've valued a lot of businesses. So we have background data on how the business valuations vary so our team will be able to advise and say this is what we're seeing in the market and this is how it could be affecting your business and, depending on where you're in the country, it will also affect the value of your business. So it's being, I suppose, approaching it realistically. If you get the upside and your business sells for more, great, but don't peg your expectations to a figure, because that can just lead to disappointment, and so that's really important kind of keeping it real, you know, being realistic of where you can get to, but also that process of the closer you are to your business in terms of numbers and, I suppose, understanding how well your business is performing, the more informed you will be of the kind of things that you are doing to the business and how that's affecting the output. So we talked about that stability of a chair, knowing what percentage of your revenue comes from NHS, what percentage of your revenue comes from private, how profitable those individuals' revenue streams are.
Maja:Looking at white space in your practice, you know how utilized are your chairs? Are they? You know, is there a bum on the seat whenever the seat is free? Really important? What's the value of the dental hour on those chairs is really important. And those are some of the like big levers that you can pull within your business to then understand how profitable it is and ultimately how that reflects on the value of the business. So knowing your numbers, so having this Henry Schein business so Henry Schein One software of excellence dentally have really good reporting tools and background reports where you can take this data out, and they have consultants that do it for free and help you decipher kind of these.
Maja:They call it magic numbers but like key levers in your business and how well you're performing against other businesses. I think they have like 70% of the market covered with a practice management system. So as a pool of data on kind of how businesses are performing, you can then benchmark your practice against those other practices and say, well, actually you know I have 50% of white space. Some of the best performing practices have 90% occupancy. You know I'm missing 40% of occupancy on my chairs. What can I do to fill, fill those? So things like that really important to know your numbers so that that can lead to knowing your valuation.
Dr James:Long-winded answer no, listen, the more value the better, and there's a saying that I love. I'm sure I've said this 100 times in the podcast, but I'm going to say it again you master what you measure. Every time I've bothered to look into the numbers of how something works. You you know it's very hard to figure out sometimes what to do next, and if you're in that place, I bet if you look at the numbers they'll help you significantly or there'll probably be an answer staring right back at you, because the number of that's. If I ever am confused about where I should go or what I should do, it's almost always a data problem. I think personally, it's really helped me out. And practices dental practices are no exception. All businesses operate like that. So it's worth saying another podcast today on the topic of numbers. Due diligence let's talk about, because that confuses the heck out of dentists yes, I'll get again.
Maja:I was just going to say on the numbers, one of the scary things about the numbers is that you start scratching. If that's not your bag, if you are not the person that's like on top of your numbers, starting to scratch the surface of that can be really scary. So start early. We're talking about 40s. You're preparing to sell in your late 50s. If you start in your 40s and just get over the, the kind of anxiety of uh, be knowing your numbers well, it will serve you so well because it can only get better because otherwise you're driving blind. So that's the on the. On the point of numbers, I think it's super important to know them and you're right, it's always in the data, um. So let's say, talk, talking about due diligence. So you are on the journey to sell your business. You've got the right valuation. You're really happy with, with where that's going, um. You then get to a point where you have negotiated with the buyer. They've given you an offer, you have agreed. You're both happy. They're getting the right kind of business. You are. You are selling your business for the number that you want. They're getting the right kind of business. You are selling your business for the number that you want. Now the most important thing is, if you remember I said, these things take time and the process of, once the buyer and the seller have agreed to buy the business, sell the business, they come into an agreement and it's an agreement. That's a basic agreement that the buyer agrees to buy this business at this value and the seller agrees to do the same. They are always contingent on the due diligence process being carried out. So at this point the buyer is taking the seller on face value that the stuff that's in the valuation is exactly as it is. So they are making their offer based on the information that they have at that point. Now what the due diligence process does it allows you to kind of scratch the surface of that business, for the buyer to scratch the surface of the business and then basically have a look if the numbers, the way that they have been presented, if the team, if the property stuck up in the way that they had imagined and that's reflected in their offer.
Maja:And the due diligence process covers kind of main areas. So most people think about due diligence basically being based around finance and finance and kind of the legal side, and in theory they are. So finance makes a big part of it. It's quite an in-depth dive into the profit and loss, into the kind of things that the company owns, into the patient numbers coming through patient lists, nhs contracts, so it feels quite invasive. You know somebody is having a like taking a big looking glass and having a look into your business, so that's a big part of it. Then you have the legal aspect, so the buying agreements, potentially if you're selling to a corporate and associate agreement. So that takes time, which is basically kind of, I suppose, tying up the legal side of transferring a business to somebody else. So that's the legal side and the thing that gets a lot of the.
Maja:There are two other really big areas that can end up being really troublesome and they need to be addressed very early on, almost in the sales process. So if somebody is looking at selling their business, the property, so your business is an entity that sits in a building. Now that building is either owned by you, as the dentist owning the building where your business is sitting, it can be owned by another landlord or it can be owned by your SIP, but the business is a different entity to the property that it's sitting in. So if you think about it. If you are buying a business that's sitting in a property, what you want to know as a buyer is that that business will be able to continue to operate in that property for a number of years. So, as a seller, when you come to sell the business, what you really need to think about is do I have the permission to continue to operate my business from these premises for the long term? That's pretty simple. If you own the property, you're the landlord. You can then decide either I'll sell the property at the same time, potentially to that buyer, or I will retain the property and continue to receive income from it.
Maja:But if your landlord is a third party or somebody else owns the building, there are a few kind of legal requirements with regards to the lease, so to make sure that you can continue to have that lease for a number of years. So if your lease is coming up to renewal within the next one, two, three years, it's super important that you extend that lease. If it's a third party landlord, because you might get to a point where you want to sell your business and actually the buyer goes well, how do I know that I'll be able to operate? I buy this business and the landlord won't extend the lease for me. So it's really important to have a long lease super important and that's something that trips up a lot of people. And property matters legal matters in my experience don't happen very quickly. So if you're thinking things will happen quickly, they generally don't.
Maja:So tackle that early. The property is really important to be tackled early. And alongside with the property you have a number of other things that are within the property health and safety, fire, um, um regulations you got. Is there asbestos in the building? Um, is the? If you do have a lease, is it in good repair? So does will the building? If you do have a lease, is it in good repair? So, will the building need other adjustments before somebody can take the lease on? So there are a number of other things that you need to consider that are tied to the property. So you need to address those very early on because they are a big part of the due diligence process and one of those things that takes a really long time.
Maja:The other thing that's important, obviously, how you're funding this. So I'm sure that there were people on the podcast that were talking about funding would know a lot more kind of in detail funding kind of aspects of buying a business. But it's really important that you secure funding early enough, that you have the right level of deposit. Important that you secure funding early enough, that you have the right level of deposit, that the valuation that the bank carries out aligns with the valuation that you might have that the offer is based on. So it's really important that those things are aligned and making sure that obviously you can buy the business and you can buy the property if you decided to buy the property.
Maja:And the last one, the really big one, is the CQC. So CQC huge in our industry, obviously regulate the way that practices operate. But that process of transferring the CQC registration from one owner to the other owner can be really complicated. And CQC have recently had a lot of changes, kind of at that top level. They launched the portal. The portal hasn't worked that well, so they're back to paper applications and the process that would usually take, say, three to four months, can now take six months, seven months. So this is from the moment when the sale is agreed. So you're kind of thinking, actually I've sold, I now have four, six, eight months for the process to be submitting an application to CQC, getting all of the kind of things in place so that the application can be approved.
Maja:It can take time, so it's being really prepared and making sure that you have the right advisors around you for that process that takes kind of that significant amount of time to happen, and being kind of you know if you're prepared for it, if you know it's coming.
Maja:It's much easier to deal with than when you are in the midst of it and kind of thinking is this ever going to end? You know I am in this process and these people are asking me for stuff. It's really important to be surrounded by people who are guiding you on that journey and there are a number of really experienced solicitors, really experienced brokers, accountants that understand the dental industry and the intricacies of the dental industry, that can hold your hand through that process so that you know if you're prepared, you kind of know what's coming and you are aware of the fact that you have to be pushing and you have to be engaged as a seller, that this process is far less painful than if you just go in with a blindfold and go. This process is far less painful than if you just go in with a blindfold and go. I know what I'm going to get, it's just I just don't know what is going to happen, because this process is killing me.
