It never fails to amaze me, but so many sellers still fail to take care of some of the most basic items before they try and bring their practice to market. I thought that I would take you through some of the biggest ‘no-no’s’ so that you won’t make the same mistakes.
- DON’T discuss the potential sale with the PCT. Of course when you do this the PCT will be as nice as pie and full of good intentions. However, this may come back to bite you further down the line – do not do it!
- DON’T sell to anyone who gives you a call! If you were selling your house, would you sell it to someone who phoned up and claimed they were the only people looking?! I suspect not. In which case, don’t do it with your business. Corporates will call and try and offer a knock down price – make sure you promote to the entire market.
- DON’T spend a small fortune on the internal decor. Interesting one this. I think with the plethora of property programmes on television offering good advice on house sales e.g. neutral colours, new paint, new carpet etc., many feel that the same is true of a practice. In our experience this isn’t the case. It must be presentable but it is less of an issue when buying a business rather than a residence.
- DON’T be concerned about a slightly below average level of profit. In our experience, buyers often believe they can do better than the current owner and like to feel that there is room for improvement when they place their ‘stamp’ on the practice.
- DON’T try and inflate the figures! Many purchasers will be wary about BIG changes in income and profit – especially big increases in income and profit the year before sale without good reason.
- DON’T leave equipment that doesn’t work or redundant on display. Pretty straightforward – if it isn’t of any use, pack it away or get rid of it.
- DON’T fail to plan in advance. A typical sale will currently take around 9-12 months. If you plan ahead and have 2-3 years you can make any relevant changes to the practice. Any less than this is unrealistic.
- DON’T ignore contracts. Perhaps when you took your associate on it was done with a friendly chat in the lounge bar of the Dog & Duck! When it comes to selling a business, this will no longer do. A full legal document needs to be in place – they are an ‘asset’ of the business.
- DON’T talk to the world and his wife. Whilst it is often useful to case opinion far and wide, the sale of a dental practice is generally not in this category. You tend to find that you will get 5 different opinions many of which will be misinformed.
- DON’T be unco-operative with potential buyers. As long as you have used an independent agent to ‘weed out’ timewasters anonymously, you should be as open as possible with serious potential buyers and communicate with them fully.
- DON’T try and keep back certain items e.g. practice website. This can come up quite a lot and the simple answer is that the sale of a business includes everything. It doesn’t matter that your friend designed the website and you really like it; it is an asset of the business and included in the sale.
- ALWAYS use specialists. Whether you’re talking about finance, solicitors or the agents who sell the practice, it is absolutely vital that you work with people who understand the potential pitfalls and how to avoid them.
Selling a business is a big undertaking and as the vendor you need to maximise your return on investment. Make sure that you don’t make any of these mistakes!