So now you have decided its time to sell your medical/dental practice. You have built the business for a long period of time and its time to move onto greener pastures. In most cases the practice broker and accountant and lender focus on tax returns, P and L statements and balance sheets. All of this is valuable information but often times the lease agreement can be the difference in selling or not selling your business.
As you have established business in a particular location chances are the buyer wants to stay in that location. If the lease has a lot of time remaining this can be done with a lease assignment. But do you have the right to assign your lease ? If not, the landlord may be able to prevent you from selling your business. Or, is the current lease a “fair “ deal. Is the rate a market rent for that area? If not, you may or may not be able to negotiate a better deal. Finally, does the selling doctor remain liable on the lease agreement? If he/she wants to retire to Florida staying on as a lease guarantor may not be a good model. These questions and others can be answered at no charge by a commercial lease expert.
When you are contemplating selling your business contact HPRG Transitions to get these questions and others answered.
When you decide its time to sell your business often times the buyer becomes very important to you. It only makes sense. For your entire lifetime you have built this business, which has supported you and your family and caused you great joys over an adult lifetime. Many times you have staff members who are part of the team and been with you many, many years. It is important to you that your patients and staff continue to have a good medical/dental experience even when you are long gone. This is where the dilemma often occurs between selling to a corporate buyer or an individual. In general, corporate buyers are more concerned about the bottom line and will often pay more for your business. However, often times they require you to stay on board for up to three years after closing as an employee running the business. Also certain practices are better targets for corporate buyers based on a myriad of circumstances. In general larger, more visible offices appeal to DSO’s and MSO’s but not always. In sum, its always about the “bottom line”.
So if you are thinking about selling your practice let us help you evaluate who might be the best buyer. Although we do not have a “crystal ball”, experience goes a long way in setting up a plan for the upcoming future. Current market conditions play a big role in finding the best buyer. Trends in dentistry and medicine will often dictate your best path to follow. Also, when placing a value on the medical office space, corporate and individual buyers use a different accounting method. While corporate buyers evaluate multipliers and EBITA , individuals use % of gross revenue calculations.
Here at HPRG we can provide you a “free” analysis to figure out which direction you should proceed. We know this business is your “baby” and we share your emotion in the ultimate sales process.