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| 3 minutes read

Preparing for the sale of your care or dentistry business

It’s been a difficult few years for providers but a new year brings with it a fresh start. This may involve considering selling your care or dentistry business, which can be an extremely personal and difficult decision as it means choosing to step back from the people you care for, your dedicated colleagues who deliver quality services and the business you have worked so hard to grow.

I have been on this journey myself as a director and shareholder of a care provider whilst preparing for, and going through, a sale process. Collating information, answering due diligence questions and attending numerous regular calls on the transaction can be hard going on top of the day job, but it is a short-term process with a goal to aim for. So here are my tips to avoid bumps in the road:

(A) Set your expectations: Regardless of the reason for selling your business, there will be a variety of factors to consider on what your ideal exit scenario is.  Being clear about your goals is key such as valuation, your involvement post transaction and who your buyer is.

(B) Prepare early: It is never too late to start gathering key financial, legal and commercial information for buyer diligence. If you can share quality information at the right time then this will instil confidence in buyers, investors and lenders, and help to build transaction momentum. Apart from legal housekeeping, it is crucial that financial accounts and records are correct and up to date, supported by well-substantiated business plans and financial projections.

(C) Anticipate the risk areas: Sometimes issues can arise that can delay the completion of the transaction. In the health and social care sector, these often relate to employees such as the incorrect payment of holiday pay or travel time. It is always best to tackle these issues head-on and rectify them in advance of a sale. If you haven’t been able to do this, being ready to prepare a full explanation for the buyer, plus the steps taken to mitigate any possible exposure can be beneficial. For example, calculating and repaying any holiday pay due could reduce the need for unpalatable vendor indemnities.  

(D) Identify your management team: Buyers, investors and funders are looking for a stable management team who are going to stay on post-completion and continue to drive the business forward. It is therefore important that the senior managers you need for the transaction are correctly incentivised and aligned with your objective to sell. Such key personnel may seek reassurance on stability going forward and their financial position post-transaction. Common arrangements include bonus agreements for loyalty to the point of completion, and buyers requiring key personnel to sign retention agreements (which contain financial incentives) after completion.

(E) Drive an efficient process: One of the biggest pitfalls for vendors in a transaction is the time taken away from running the business. Making sure you have an efficient process for managing interaction with your buyers is essential to avoid a detrimental impact on trading/operating performance. Responding to information requests and enquiries can be time-consuming, so before sharing information agreeing an organised process with a buyer as to how information will be organised and relayed at the outset is essential. In addition, ensuring that confidentiality and data protection requirements are adhered to by a buyer should be considered, and it is best practice for a seller to enter into a confidentiality agreement at the outset and before releasing information. 

(F) Consider the tax: The earlier you take tax advice the better to ensure that the business goes to market with the most favourable tax structure possible. The structure of the transaction is of fundamental importance. You will need to consider whether the transaction is to be structured by way of the transfer of business and assets as a going concern (an asset purchase), or the purchase of the share capital of the trading company. Owner-managed businesses would typically prefer a sale of the shares in their company which can mean a more advantageous tax treatment for individual owners by way of capital disposal.

As with many other things in life, it pays to work with a specialist and should be key to a positive experience. It’s important to surround yourself with trusted advisors that you are comfortable with and who can guide you through the sale process from the early stages. Picking the right tax, corporate finance and legal advisors who understand the ins and outs of the sector is also imperative. A wise former colleague said to me that good advisors make your life easier and this is so true because you need these trusted advisors to enable you to continue operating your business whilst they lead the sale process.

If you are considering selling your care or dentistry business, or thinking of buying one then the health and social care team at Anthony Collins can support you through the process and beyond. If you would like to discuss your plans on a highly confidential and no-obligation basis, please contact Laura Jordan by emailing


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