So you are thinking about selling your practice- you are not alone. A recent survey conducted by Pepperdine University shows almost 2 out of 3 small business owners expect to sell or transfer their business ownership in the next 10 years! You can look on any chiropractic classified site and see an abundance of listings. But the sad truth is, not all of them will sell. Many business owners will have to just close the doors and turn off the lights, destroying plans for retirement and other opportunities.
We’ve compiled a list of the most common reason’s businesses don’t sell. Pay close attention and examine your business and practice sale strategy critically to make sure you’re not making any of these (very common) mistakes.
Not Preparing the Business for the Sales Process – Not organizing stats, records, financials, procedures, etc- not to mention the physical appearance of the business. This gives a bad vibe to the buyer- if something this important has been done hastily and messily, how carefully has the actual business been run? Or- much worse- it could give the impression you are trying to hide something or misrepresent your practice.
Overconfidence – Failing to see your practice through a buyers viewpoint often leads to overpricing. You see your practice through the lens of years of hard work; Buyers see it through a critical, unemotional eye. Flawed pricing is the #1 reason practices stay on the market too long. Purchasing a professional valuation is an absolute must; it will ensure the practice is priced appropriately, and identify any critical shortcomings in time to address them before listing the practice.
Misrepresenting Your Practice – Presenting your practice in a light that leans more toward dishonesty. While you want- and need- to show buyers the many positives of your clinic, if you exaggerate its success or potential of you can be sure buyers will figure it out. This leads to distrust, a surefire way to scare a buyer off.
Poor Financial Records – Having outdated financial statements, and not being able to intelligently discuss them with buyers. We know, we know- you’d rather watch paint dry then delve into the intricacies of accounting reports. But even if you have a broker and a great CPA involved, it pays to have a basic understanding of these documents and to be able to discuss them with potential buyers. And it should really go without saying that if your practice is for sale, your financials MUST be up to date, and should lag no more than 1 month (it is mid-April so your financial statements should be complete through February- with extra points for having March done by then!)
Selling During a Declining Business Pattern – Listing your practice when sales have been declining over a period of years. This is tough, because many doctors- especially retiring ones- lose stamina at the end and want to have a reduced schedule due to burnout or desire to pursue other activities. But to get top dollar, a fast sale- or optimally both!- you have to focus on sales growth all the way through the close of your practice sale. Pull out those marketing ideas you put on the back burner, look into hiring an associate – this is a key place to put your time and money, you will be glad you did!
Trying to Do it All Yourself – Believing that you can do everything yourself in the sales process in order to save money on professional fees. Most doctors do not have the experience or detailed knowledge to optimally handle their own practice sale. The sale of a practice has so many facets- and so many points where things can go wrong. It is imperative to bring in a broker, an accountant and an attorney, not just to protect yourself during the transaction but also to make sure you aren’t leaving any money on the table. At Progressive Practice Sales we often pay for our fee by properly pricing your practice and creating additional value through a strong presentation of your practice and negotiating for top dollar on your behalf, not to mention lowering your stress by taking care of the details and minutiae involved in marketing, negotiating and finalizing the contract for the sale of your practice.
Take these factors in consideration when preparing to sell your practice. While they may require more work on your part, it's worth it. And you don't have to go it alone- that's what we are here for. Contact us today for a free consult to see how we can assist you in your practice sales goals. Until then, remember- this is one of your most important assets, so continue to put in the good work up until you pass through the finish line of closing the sale.