Getting past the due diligence stage – It really doesn’t need to be that painful!

17 February, 2020 / management
 Richard Pearce  

The list of questions to be answered when selling a practice can run to
more than 40 pages; some thoughts on making completion easier

DD, Due Dil, call it what you will, refers to the vendor providing detailed information about the business (Practice), to the potential buyer. It happens after an agreement in principle has been reached for the sale or purchase (often called Heads of Terms or HoT’s) and precedes the preparation of the Business Purchase Agreement (BPA) or Share Purchase Agreement (SPA).

Note: A BPA refers to a sale of goodwill and assets (normal in a single practice sale). A SPA would be used in a share sale or purchase (more likely in a group of practices operated as a limited company).

Due diligence is where you are asked (as the vendor) to answer an extensive list of questions and where it exists, provide the evidence to support your answer. Hopefully the questions are sensibly grouped into subject areas (and a template table provided where applicable), so you might have:


  • Last three years’ accounts (and management accounts for current financial year)
  • Asset register (make and model of each equipment item, date purchased, estimated value)
  • Details of all service contracts.


  • Associate and self-employed persons information (name, start date, specialisms, clinical hours or weeks, monthly gross for last three months, commission percentages)
  • Employed staff information (name, position, DoB, annual salary, start date, any disciplinaries)
  • Organisation chart.


Numbers by category (Membership Plan, NHS, Med Card, PAYG etc.), who have attended in the last 18 months. This list could run to 40 pages and this can be daunting to some vendors. So, here are some thoughts on completing the DD.

On receipt of the DD enquiries the ball is now in your court, as the vendor, as to how you will speed up or slow down the sale process. The DD enquiries are likely to come from the buyer’s solicitor direct to you or via your solicitor. However, there is nothing to stop you, as the vendor, having prepared a set of answers to a standard dental practice DD, updating them where necessary and then forwarding them, as soon as HoTs have been agreed. It is only then you will get a sense of how quickly the purchasers solicitor operates and how much detail they are looking for. You will know this from the subsidiary questions they ask you. If you are selling to a corporate, their approach to the conveyancing process will be, as you would expect, formulaic. After all, they have done it many times before and probably the same solicitor will have acted for them many times.

In practical terms, a laptop is required (a word on why a laptop, later) and a digital folder for each set of questions. Label each document starting with the number of the question you are answering (or providing evidence for) e.g. C8 – Asset Register. You will also need a scanner for registrations and registration certificates, contracts etc. Label these scans in the same way. You can then send an email for each section of the DD; and your subject line will, of course, start with your practice name.

A laptop is suggested due to the likelihood that you will want to keep the sales process confidential until completion. Hence, your laptop can be kept secure (physical and access) with all information kept off network. It may be that you bring your Practice Manager into the ‘circle of trust’ but many vendors do not as knowledge of an imminent sale can be very de-stabilising for staff. If you have a business manager, then delegate the whole process to them. This is just business, after all, and they should have all the required information at their fingertips and will have bought and sold businesses before.

Don’t be daunted by DD – and if you get organised, like most elements of business administration, it can be completed painlessly.

“Don’t be daunted by due diligence – if you get organised, like most elements of business administration, it can be completed painlessly”

Richard Pearce lives in Northern Ireland. Following a business career in various sectors and an MBA, he joined his dentist wife in dentistry. Richard combines his wide commercial experience with being attuned to what it is like for an associate dentist, a practice owner and a practice manager. His unique perspective ensures he can assist a practice owner with every area of the practice to create a more profitable practice and to achieve their smart objectives. For more information visit,

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