What “Not to Do” When Selling Your Practice
We all teach and preach on all the items you should do to maximize your Practice Value when getting ready to sell your practice. Here are some things you should not do when it is time to sell.
- Most veterinarians do not have the time and expertise to take a practice sale from start to finish. It takes a team for you to get your best deal, and as a practice owner, you will find it well worth the commission to have an experienced negotiator on your team to be sure you are getting your best deal in both price and terms. So, don’t do it alone!
- Most veterinarians let the highest cash price drive their decision. This could be a mistake in some cases. You may be offered class A or class C stock, an earn-out, your employment agreement, your associate’s employment agreements, and all need to be taken into consideration. Although “Cash is King”….that is not always the case, particularly when dealing with corporate transactions.
- Maintain Confidentiality….do not discuss your intentions to sell with your colleagues, associates, or your staff. It is important that the process is confidential from beginning to end. There will be a time to discuss a pending transaction with your associates and your staff and your broker/advisor will guide you as to when those conversations need to take place.
- If you have a practice that is highly sought after, then don’t just entertain one offer. It is to your benefit to have some competition and see more than one offer. There again, your broker/advisor can help decipher those multiple offers to determine your best deal.
- Have some knowledge of the valuation process and don’t get hung up that the highest multiple is always the best deal. Adjusted earnings are not always calculated the same. Your broker/advisor will know if your EBITDA is being calculated fairly by a potential buyer. It’s a fact that a lower multiple of properly calculated earnings may be a better deal than a higher multiple of earnings that have been reduced by extra adjustments.
These are just a handful of items that a seller should be thinking about as they approach selling their practice. The bottom line is that most veterinarians are not equipped to handle the time consumption and details it takes to get their best deal closed while working every day in their practice. The brokers at Total Practice Solutions Group have the knowledge, experience, and expertise to get you your best deal whether the buyer is a fellow veterinarian or a corporate consolidator. Call the broker in your territory today for an initial consultation to see how we can help you through this process.
Richard Alker, DVM | Florida Territory Owner