One of the main concerns of Principals when selling their dental practice is how it will impact on their staff and Associates and how they will respond to the news. Dentistry is all about people and we believe very strongly that they are our most important asset. We need to retain and nurture them and ensure that they always feel treated fairly. We have bought over 25 practices and have seen Principals handle this is very different ways. Here are some of the lessons that we have learnt from this:
Maintain respect and trust: This is perhaps the most important goal. The sale itself is not the end of the story and you are probably going to have to work with your team for years to come and you need to bear this in mind in your interactions with them around the sale. What’s more, if they feel betrayed then this will probably undermine their feelings about the practice and this may damage its performance. This could be a real issue if you are on an earn-out. Most importantly, however, you want to feel good about this transaction and about how you have treated your colleagues.
The good news is that, when handled correctly, the sale can be a very positive and exciting step for the whole practice team.
Communication but at the right time: We generally support the Practice Manager being told early in the process so that they can help with due diligence. After they are told by the Principals, we would generally organise a lunch with some of our Operations team to reassure them, answer their questions and explain the process to them. Most experienced PMs are mature enough to understand what is happening and to be supportive. As well as helping with the collection of all the information required for the process, having the PM on side makes the process easier once the rest of the team are informed.
We generally do not propose telling the rest of the team too early. They have all heard horror stories about what it is like going through a sale and working for a corporate/group. Giving them too much time to worry about this can be counterproductive and some may leave.
On the other hand, not telling the team about the sale until the day of closing can cause a lot of resentment and is not advised either.
We suggest that the Principal tell the team about two weeks before completion. That way the team is informed and the sale is not being sprung on them, while the time between the news and the reality (which will be much better than they fear) is relatively short.
If you are doing an asset sale, you will need to consider TUPE regulations as to when and what you tell your employees.
Choose the right buyer: Not all dental buyers are the same. While price is very important, there are other criteria to consider too. Choosing one that fits with your vision for the practice, and who will look after your team, will make the process much smoother with all stakeholders. It is also powerful if you can describe to your team the diligence that you have done on the buyer. A number of dental practice owners have spoken to up to 8 of our existing Principals before choosing to sell to us and this is a process that we highly encourage. Being able to say that you have done so, and have heard the inside story, is very reassuring for teams.
Fight their corner: Some buyers may try and convince you to change the T&Cs for your Associates or staff in return for a higher sale price. What a great way to start the new chapter for the practice by telling your colleagues that they are going to be making less money in future! Better to find other levers for you to get full value while keeping the team happy so that they can continue to deliver and help you reach any earn-out targets set by the buyer.
Post-sale the communication continues: It is very important after the sale for the new owner to maintain a high level of engagement with the staff giving them an opportunity to express concerns and point out any problems, so that they can get resolved quickly. We always encourage an increased frequency of team meetings in the first weeks after sale, as well as one-on-one meetings.
Handled correctly and with respect, practice teams can start the relationship with the new practice owners in a positive way which will bear fruit for all parties in the years that follow.
About Gensmile
Gensmile is a group of over 25, high-quality, predominately private dental practices. The founding ethos of Gensmile is to partner with dental practitioners who seek to be freed of the demands of running a business and instead want to be able to focus on delivering high quality dentistry to their patients. We aim to be the natural home for top quality private practices.
While we are small, we have a full team to support each of our practices from compliance to marketing.
We believe that every practice is unique and we aim to retain the culture and legacy of each one. Our patients don’t see any change after we take over but we work and invest to support and grow the practice in-line with its historical practice.
We are fully owned by Gensmile’s founders and management team. With no private equity owner, we can take a truly long-term approach, rather than being focused on a short-term exit.
Our aim is that each of our dental practices is a place where dental professionals want to build their careers and where patients receive a best-in-class experience with excellent clinical outcomes.
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