Acquisitions, Blog, Dental groups, Maximising multiple, Profit

How to Maximise Multiple in your Dental Group

Maximise multiple with evidence that your dental group has the ability to scale through your acquisition strategy.

Firstly, sustainable and stable scaling is not achieved through one acquisition at a time. You need a long term pipeline.  Achieving this requires an engaged workforce who implements and utilises well-designed systems, delivers organic growth and positively represents the brand identity of your business. Illustrated below, each of these elements need to be in place to develop scalability and maximise multiple.

Certainly, without evidence of the above the line requirements, your group will achieve the industry benchmark multiple, as opposed to maximising multiple.

Model which illustrates how to maximise multiple when selling dental group

Scale through acquisition linked to culture

That is to say, scale through acquisition is intrinsically linked to your overall organisational strategy and culture.

Not just in terms of the kind of practice you will purchase, but a strategy which considers how you put yourself into a strong, long-term position by building a robust pipeline of potential practices to buy.

Look at the graphic below. You can see that there is a relationship between an engagement journey that develops long-term relationships, generating a pipeline of potential sellers, and a culture which meets – or exceeds – expectations once a practice is integrated. Together, they create an excellent reputation and strategy of attraction.

This formula will maximise multiple:

Model to show elements of accelerating acquisitions

Develop, Know, Like, and Trust

Do you pro-actively develop your connections and networks?

Are you meeting with potential sellers who may not be ready to sell yet?

Have you begun developing a relationship so they know, like, and trust you – which will inform their decision of who to sell to?

Taking a proactive approach to lead generation means you are developing a database for a future potential pipeline.  The value of this pipeline contributes to maximising multiple.

Everyone is ‘selling’

Every time a Principal has contact with a member of your organisation, you have an opportunity to sell your unique brand (culture).  You and your team convey this message through actions and behaviours.  For example, contact may be with your acquisition team, finance or the operations team, who ultimately integrate the practice.

Consequently, the experience will either elevate or limit your success.  Great initial contact, acquisition experience, and subsequent integration informs others about your culture. Therefore, whether this experience meets (or even exceeds) expectations means a reputation that speaks for itself.  It is this reputation that will attract potential future sellers, build your pipeline, and maximise multiple.

Acquiring practices is a ‘customer’ journey

Undoubtedly, the biggest mistake made in acquiring practices is treating the experience as a transaction:  Practice owner wants to sell. Provide an offer. Agree terms. Due diligence. Complete.

However, dealing with a potential seller is about engagement and building a relationship. It’s a customer journey.

Most importantly, this is possibly one of the biggest and most significant decisions they will make in their life.  It’s an emotional journey and should be mapped to fully understand, anticipate, and support.

Therefore, all touch-points and experiences in that journey inform the potential seller about your organisation and its culture.  Right from the first point of contact, through to completion and integrating the practice and team. (More here on integrating effectively).

So, make sure that journey maximises engagement at every stage and you will reinforce a positive message about your culture and reputation.  In turn, this will influence the success of your acquisition pipeline and the potential to maximise multiple.

Fail to invest in culture and you will impact your ability to scale

Many in the industry often perceive acquisition as an activity separate to the business purpose of caring for patients. But, if your organisational vision is to grow and maximise multiple, your Senior Leadership and Management team need to understand the relationship between culture and growth through acquisition.

Your key differentiator in a highly competitive market place is your culture.  In the early days of growth, culture is often happy and stable. However, it is culture that experiences the most pressure as the business grows – without exception.

In other words, if you fail to invest in culture, you will feel the impact throughout the whole of your organisation. Consequently, this will impact upon your acquisition pipeline, your ability to scale and maximise multiple.  (More here on engagement and culture).

Developing your acquisition strategy

evolveyou dental have extensive experience in developing a strategic approach to acquisition. We map the engagement journey, lead generation, and ensure the Senior Leadership Team are fully aligned, and develop managers to ensure they engage the workforce, endorsing your reputation and increasing attraction.

To explore how they will work with you to accelerate growth contact lyn@evolveyou.co.uk or call 07950 914328