Future proofing your dental practice

Property lawyer and Healthcare specialist, Lisa Davison from Wake Smith Solicitors reviews internal and external challenges threatening the practice environment to keep you one step ahead.

As a dentist and practice owner, as in many business environments, it can be dangerous to focus too much on what is happening in the comfort zone of your own business.

The structure of practice ownership is changing as well as the external environment. Dentistry is a business as well as a healthcare profession. Businesses involve risk when moving forward, so it is a good idea to ask yourself where your practice sits now and where do you want your practice to go in the future.


The structure of the traditional practice is changing, with an increasing number of dental corporates, expense sharing arrangements, incorporated practices and hybrid structures becoming the norm. There has also been a shift away from the dentist led team to a new type of practice led by practice managers, therapists and hygienists.

You need to consider how the following factors may impact your practice and business in your local area and how you plan to respond.

  • Ownership – traditionally the practice is owned by one or more principal(s) whose relationship is governed by a partnership agreement. It is traditionally the partnership who owns the business premises.

We have seen an appetite in recent years to provide an alternative vehicle for ownership and development of practices with an increase in incorporated practices and practice mergers in addition to private equity investors and start-ups. The aim of such enterprises is often to rapidly become a significant platform size to be attractive for acquisition in the future.

  • Sale of premises - A number of companies are now offering sellers of dental practices a financial stake after completion.

This can align the interests of both buyer and seller and can be an effective way of creating additional value in a rising market. Sale and leaseback opportunities have also been around for a number of years and offer principals the opportunity to release capital whilst continuing to operate the practice under a lease arrangement.

  • Succession planning – Upon retirement, the outgoing principal would generally sell the practice to an Associate at the practice or otherwise sell the practice on the open market with the aim to release the equity as a secondary pension pot.

This model is however becoming less and less sustainable due to the lack of principals willing to take on partnerships, infrequently leaving dentists struggling to find exit plans from their estate partnerships as they retire.

  • Opportunities - It is also worth considering the use of available space within the practice with a view to seeking out opportunities to let unoccupied space to alternative healthcare providers.

Such initiatives reflects NHS global model of more consolidated healthcare facilities, whist improving the balance sheet of the practice.

  • Condition of premises - Some modern practices are purpose built and others are converted semi-detached houses in a wide-ranging state of dilapidation.

It is important both from a patient experience and valuation point of view that premises are kept in reasonable condition and suitable for modern working practices. This in turn can also assist with CQC compliance.

Market Influences

The external environment is ever changing, with threats and opportunities presenting themselves to the operation of the modern practice. Practice owners should be aware of current issues and consider how such factors can be used as an opportunity to develop your practice in new and better ways.

  • · Technology – The emerging use of digital technology potentially changes the use of traditional practice methods and space and demands a more flexible approach which may not be suited to current premises layouts.
  • · Patient requirements – The restriction of treatments on the NHS means that even in a challenging market, demand for private dental treatment remains robust with patients willing to pay for their own enhanced treatments, rather than relying on the NHS. This has resulted in a discernible shift in demand towards the private sector.

Practices which traditionally were solely NHS led have started to diversify into orthodontics and more cosmetic procedures. This in turn balances the risk of forthcoming phased contract reforms, mitigates the net reduction in NHS funding and drives revenue yield at practice level. This presents practice owners with the opportunity for organic growth through the introduction of private dentistry and a flexible skills mix at practice level.

  • · NHS Contract reforms – After a number of years of pilots and prototypes, the ‘new’ dental contract is currently due to be phased in 2020. It is yet to be seen how practices may be affected. What is inevitable is the demand for mixed practices will continue to be in high, particularly from independents who operate as owner and principal.
  • · Brexit – With no decisions or agreements made, we still don’t know to what extent the dental sector, like every other industry, will be affected. Inevitably a change in the economic climate leads to uncertainty in the market. The movement of dental care professionals may be affected with a struggle to meet dental services without access to a steady stream of European professionals. Other consideration include the impact on the import and export of dental equipment and materials, health and safety legislation, data protection regulations and research and development.

For now, the best defence is probably to get your practice into the strongest position possible with guidance from specialist healthcare professionals. Improving efficiencies within the business, whilst marketing to attract to new patients and creating the best possible working environment for staff all remain crucial.


When considering the impact of the external economy, it is worth noting that the dental sector continues to be one of the hottest sector for lenders, with a vast array of established and challenger banks keen to support the sector. In a less certain political landscape, investors and bank money tends to follow regulated, needs driven sectors where levels of business impairment have traditionally been low. Be aware however that lenders may require significant deposits in more uncertain market conditions and will require extensive due diligence to ensure their investment is secure.

Whatever your plans for the future of your practice, funding whether by way of debt or equity, together with integral advice from specialist healthcare sector professionals could play a critical role in embracing challenges threatening the practice environment to help you keep one step ahead.

In an increasingly sophisticated and rapidly changing sector, our team of specialist healthcare lawyers stay ahead of the issues to work with providers in dentistry, leading the way to achieve better, integrated solutions, more efficient practice and improve service user outcomes.

For further information and friendly expert advice call Lisa Davison at Wake Smith quoting PROFESSIONAL DENTISTRY on 0114 266 6660 or email [email protected]

Click through to Wake Smith website


Posted on 28.11.19