You will need help to spot it (an opportunity) and a growth mindset to act on it.
I see marketing material from various organisations expounding that if you sell your business with them you will have an easy experience and your sale will have completed before you know it. The messaging seems to suggest that you can sell your business without putting in that much effort. In any process where no one person has control over everything this is an aspirational statement to make. What is more important is engaging a team who know the market place, have your best interests at heart and will put in the work required.
There are several milestones in the sale and acquisition process. Some of them can be controlled by the vendor and their representative but many cannot. For instance, the vendor can manage:
- Their own integrity.
- Their own mindset to the sales and acquisitions process.
- The performance (£) of the business during the sales process.
- The business costs during the sale process.
- Completion of their Due Diligence.
- Their NHS contract.
- Training and recruitment.
- Plan patient maintenance.
- Their choice of broker.
- Their choice of dental specialist solicitor.
Conversely, vendors have less control over:
- Buyers’ motives.
- Buyers’ personal circumstances.
- Buyers’ funding arrangements.
- The advice buyers’ get from their solicitors and accountants.
- Buyers attitude to risk.
- Banks attitude to lending.
- Corporate activity (or not).
- Interest rates.
- Market values.
I want to focus us on the mindset required to complete a transaction. Having the correct mindset to ‘go the distance’ is one of the most important factors in getting a deal to completion. Because with the best will in the world no deal will complete unless you have a buyer who wants to buy, and a seller who wants to sell. Please do not confuse this statement with vendors being asked to accept sub-prime proposals. Negotiating a deal is just part of the process.
There are two basic mindsets: fixed and growth.
If you have a fixed mindset, you believe your abilities are fixed traits and therefore can’t be changed. You may also believe that your talent and intelligence alone leads to success, and your effort is not required.
If you have a growth mindset, you believe that your talents and abilities can be developed over time through effort and persistence. People with this mindset believe that everyone can get smarter or more talented if they work at it.
This is an important point, because many vendors are embarking on a process they may have not been through before. It takes a skill set they have not developed during their clinical career and it will take a fresh approach to get them over the line. Of course, they should rely on their broker for advice but they must still understand the playbook that is being run on their behalf.
What does good look like?
This is a critical question which an experienced dental broker can help you with. I have seen many vendors walk away from ‘good deals’ thinking it is not a good deal. The reality only kicks in further down the line when they find they are not getting close to agreeing a deal that is as good as the one they walked away from. Conversely, I have seen vendors being persuaded by professional buyers to accept a ‘good deal’ which in fact never was. Trust me, the sweet spot of what good looks like is pretty narrow and it is always moving. You will need help to spot it and a growth mindset to act on it.
Your mindset is a set of beliefs that shape how you make sense of the world around you. It influences how you think feel and behave. It is your mindset that plays a significant role in determining achievement and success.
Adopting a growth mindset is really going to help you. Characteristics of a growth mindset are:
- I can learn anything I want.
- The more I challenge myself the smarter I become.
- I only fail when I stop trying.
A fixed mindset looks more like this:
- Either I am good at this or I am not.
- That’s just who I am. I can’t change.
- If I don’t try then I won’t fail.
We have identified buyer and seller stability, delayed due diligence, problematic due diligence, property issues and practice performance as the key touchpoints which can delay or de rail a deal.
Let’s consider how seller mindset is connected to seller stability.
We spend a lot of time with vendors and know some find this quite an emotional process. It is not surprising and we understand why. A practice may have been in their ownership for 30 years or more. They have deep rooted relationships with their patients and their own team. Their reputation is directly linked to the practice and they are considering handing that over to someone, who as yet, they have probably never met.
Their sale is also linked to delivering on financial goals, meeting the expectations of family members or acting on medical advice.
People are more likely to persevere in the face of setbacks. Instead of throwing in the towel, people with a growth mindset view it as an opportunity to learn and grow. On the other hand, those with fixed mindsets are more likely to give up in the face of challenging circumstances.
As a vendor you must also provide all the information required in the Due Diligence and be prepared to go back and look for gaps in the information or be challenged on some of the information you have provided. This is not personal. It is part of the process. The buyer, their solicitor and their lender will relentlessly demand answers to all the pertinent questions.
This is a perfect example of where you will need that growth mindset to keep moving forward rather than adopt a fixed mindset and take the challenges personally, loose focus on why you put your practice on the market and start to resent the buyer and their advisors.
Warning signs that you are reverting to a fixed mindset are if you start to think about ‘matters of principle’, ‘taking tit for tat actions’ or thinking the buyer(s) do not deserve your practice.
The pillars of an open mindset are having a positive outlook towards learning and evolving your own experiences and skill set. So, who is going to provide this teaching?
It will most likely come from your team of trusted advisors that you have put together. Your dental broker, accountant, dental specialist solicitor, wealth manager, CQC advisor. Having expert advice on hand from people who are representing you (rather someone else in the transaction) will teach you a lot and will make you many more money than they will ever charge you.
This article was written by Abi Greenhough, Managing Director of Lily Head Dental Practice Sales . It was first published in the October 2023 edition of The Dentist Magazine.
If you would like to talk about anything to do with buying, selling or financing a dental practice anywhere in the UK then Contact Us today.
