I’ve been talking to a number of owners of small single handed (or 1.5 dentist handed) practices recently, practices that gross between £220 and £350k.
The owners divide into two groups, those who have had the practice for 25 years and are looking for a buyer and those who have just bought a practice from the first group.
The owners who about to sell are often making 40% net profit and think they’ve got a cracking business (although they’ve noticed their costs increase a little recently whilst their patient numbers decrease a little). The groups of new owners have got borrowings to pay for and are stuck with the costly task of re-equipping the practice to C21 standards. Suddenly that 40% net profit is looking more like 25%.
I’ve been wondering what we can do to help practices like these and there are two obvious solutions. The first is to make them bigger, but so often the cost involved in marketing etc. seems prohibitive and sometimes the facility is too small to grow the practice by very much (unless the single-hander wants to extend the opening hours).
The second solution is to reduce the costs. An innovative way of doing this is gaining ground in a few areas (including Ireland) where a group of small practices group together to share the costs of things such as:
- Marketing and Branding
- Incoming call handling
- Back office functions such as book keeping and HR
- Training
- Compliance
- Recruitment
The model usually requires some sort of exclusivity where one practice per geography joins the group and signs an agreement to cooperate. This has been mooted by some of us for several years and it seems that the idea has finally come of age.
We would be happy to create and facilitate such an arrangement if there is enough interest and so if this appeals to you, please get in touch with me.
m. 07770 430576
e. simon.hocken@breathebusiness.co.uk
With all best wishes,
Simon