Selling a private practice is not a small venture. It requires careful planning and expertise to guarantee a fair price and positive experience for all involved. For this reason, many private practice owners choose to work with a certified business broker to simplify the process and maximize the results. However, even with a broker on your team, it’s important to understand how the process works, and what the broker can and can’t do.
This blog explores the dos and don’ts of working with a business broker. Keep these tips in mind before hiring a broker to ensure you find the right buyer and achieve the best possible outcome.
Working with a certified business broker is the best choice for private practice owners. Certified brokers bring years of experience, valuable networks, and a deep understanding of the sale process. Their expertise is invaluable during the valuation, marketing, and negotiation phases.
Certified business brokers are licensed professionals who handle the complexities of buying or selling a practice. Their specialized training ensures that transactions comply with all regulations.
So, how can you maximize your partnership for a productive, profitable sale? Continue reading to uncover everything you need to know.
The best way to choose a broker is to find one with verified credentials. Look for a broker with the Certified Business Intermediary (CBI) designation, granted by the International Business Brokers Association. Certifications from this organization signify the broker underwent rigorous training, so they’re sure to comply with industry standards.
Research the broker’s track record, too. How many businesses like yours has the broker successfully sold? Finding a broker with successful experience selling in your field proves they understand how to get the job done.
Early in the process, be clear about what you hope to achieve through the transaction. Do you want to sell rather quickly or receive the maximum sale price? Do you prefer a buyer who will preserve your legacy and retain staff, or do you want someone who will take the business in a new direction? Clear communication sets the stage for a strategic, shared plan of action.
The ability to provide an accurate valuation of your practice is a big benefit of working with a broker. Request that they perform a formal business valuation to understand what your practice is worth and to price it competitively in the marketplace. They’ll look at metrics such as gross revenues, seller’s discretionary earnings (SDE), and EBITDA (earnings before interest, taxes, depreciation, and amortization) along with local market conditions to calculate a final valuation for the business.
A valuation sets realistic expectations and strengthens your negotiation power. Be sure you have a broker who understands this process and provides an honest accounting of your practice’s value.
Stay in touch with your broker. While it’s true they’ll handle the day-to-day tasks, you play a pivotal role in the sale.
When the broker requests information, provide it promptly. Attend all necessary meetings and remain available for questions. Work closely with them to guarantee you’re in sync throughout the process.
While your broker is quite knowledgeable about the private practice selling process, that doesn’t mean they’re a legal expert. Enlist a lawyer as well as a broker. A qualified attorney with business transaction experience reviews contracts, ensures compliance, and provides additional peace of mind.
This step doesn’t undercut the broker’s abilities. It’s a precaution that will benefit you throughout the selling process because the attorney will understand every nook and cranny of the law.
You’re rightly proud of your private practice. Nevertheless, be honest with yourself about its value to others.
Don’t set overly ambitious expectations for the sale, including price and sale timeline. You may find yourself disappointed in the outcome. Trust your broker to find the best possible deal; they have first-hand market experience and insights to help you make informed decisions.
Selling a private practice takes time. Avoid the temptation to fast-track the process. It might lead to mistakes or undervaluing your business. A trustworthy buyer should be thoroughly vetted.
Furthermore, productive negotiations take time, and due diligence is a must. Thoroughness eliminates seller’s remorse. Slow down, review the information, and let the broker be your guide.
Being upfront and truthful is essential to forming a good relationship with your broker and creating the best possible outcome. Failing to disclose details such as financial inconsistencies, staff changes, and pending legal matters may slow down the process. It could also place doubt in the buyers’ minds. To avoid jeopardizing the sale, be honest and trust your broker, so they can address potential issues proactively.
Even with an experienced broker, mistakes happen. Avoid the most common mistakes many private practice owners make when working with a broker.
The dos and don’ts when working with a business broker will help you identify the right broker and buyer. They serve as a strategic partner that will prepare effective marketing materials and negotiate terms that benefit you. With a reputable broker’s guidance, the process becomes faster, smoother, and far less stressful.
Work with top tier certified business brokers at Private Practice Transitions. We are trustworthy leaders who help private practice owners like you successfully sell their businesses. Visit our website to learn about our process and hear from past clients on our testimonials page.