When evaluating a business, especially without the assistance of a broker, it can be really easy to get overwhelmed. Once you really get into it, comparing businesses is often more of an apples to oranges situation. The gross of one practice is higher but the net is higher on the other; the first practice has more room to grow on the schedule but the second has a unique marketing or treatment strategy. And of course, there is the third practice in the perfect town, and it focuses on the treatments you really want to provide, only it’s patient visits have been declining and the insurance collections are really behind, so maybe the net is actually much higher than it looks right now? (Um, if this is really your situation, yikes! ASAP get a broker to valuate those businesses so you can compare some apples!)
Regardless of how many practices you are considering, here are a few gems to keep your eye out for; these can really fast-track your success!
1. Evaluate the businesses to see what assets of yours are not currently being optimized. In other words, what are you bringing to the equation that adds value to the business in an area where the efforts were mediocre (or non-existent) with the current owner.
As a young buyer, you naturally have the energy and drive that comes with youth. Maybe you also have expertise in social media that you can parlay into marketing the practice? And if you are obtaining financing that includes operating expenses, you might have the money to inject in the clinic in the form of marketing and/or treatment upgrades (through new equipment or techniques.) If you have previous business experience, perhaps you can use that to start managing the office by the numbers, revolutionize office procedures and raise efficiency/ cut costs/ improve services
2. Speaking of business experience and knowledge, how has the practice been run? If the current doctor is burnt out but the practice has stayed pretty stable or even shown modest growth, fantastic! Imagine what will happen when someone hungry (you!) gets in there and really goes after it!
3. Is there an aspect of the business that could explode with development? A product or service line that hasn’t been given the proper attention or adequately promoted- but shows the signs of being a star? Has the practice been limping along with no real website or web presence? Is the marketing still stuck in the days of a full page yellow page ad as the main patient draw? Is there a demographic that dominates the practice that could easily be marketed a string of complimentary services or products?
Ultimately you are (or should be!) looking for a strong practice with room for growth. And if you can find one with an opportunity like the ones above, that growth will be easy and likely fast. Who doesn’t love that?!
Cheers,
Kevin