If I had a dollar for everyone who said they wished they had spoken to me prior to the sale of their practice, I would be one wealthy woman. Helping our clients get the best possible outcome is the focus of all our services.
And, good advice is the key.
I often say when providing advice to clients of Rob Knights & Co, “You may not like what I have to say, but I will say it rather than sit on the fence”.
This enables the practitioner to make an informed decision for themselves with their eyes wide open.
I am always intrigued when I speak with practitioners who try to implement something within, or for their firms, without the current, right or sufficient knowledge. As advisers, we encourage our clients to contact us to discuss various scenarios or decisions prior to taking action. We want our clients to see us as their key advisers. This helps avoid mistakes… at times, costly ones.
So, when it comes to our own businesses, why do we avoid engaging suitable expertise to get it right from the outset?
I always advise speaking to an expert prior to making, or implementing, a decision.
TWO PRONGED APPROACH
There are two prongs to this – cost and sourcing the right adviser.
There will generally always be a cost, whether for selling a practice, for valuations, or for more general verbal advice. Whilst some of this is required by legislation, I would challenge that the outcome from that guidance outweighs its costs.
In some instances, you’re able to delegate a large proportion of a process to that chosen adviser, such as in business sales.
The second aspect is finding the right adviser for you. There are parties out there touting themselves as experts with the required knowledge in your areas of need and your best interests at heart.
But, often, they’re simply not.
Find the adviser you engage with, trust and believe will do the best job for you. Someone who is professional and ethical. The cost of their service will become less important when you can see the value they can contribute.
I can understand why someone selling their business doesn’t want to pay a broker $20K, $30K, $50K or whatever.
But this is a transaction relating to one of the vendor’s most significant assets which, quite often, will fund their retirement. Is this something that you want to gamble with?
2 practice sale case studies:
I had discussions with a client recently. We’d been working with them on and off over several years, regarding the sale of their practice. We had appraised the firm, highlighting its strengths and opportunities, and regularly spoke about the market conditions of the day and so on.
During one of the later meetings, the client informed me they had been approached by a firm wanting to acquire them and they were going to proceed with the sale rather than take the practice to market.
I was disappointed because it was a great practice that would have generated significant market interest and for whom I felt we could have found a great new home. We spoke about some of the facts to watch out for and some of my concerns in respect of the proposed purchaser and suggested deal.
When I spoke with the practitioner recently they mentioned the deal had been done, and despite some of my concerns arising, they proceeded. After only a short period following settlement, they expressed significant regret. They didn’t believe they’d done the right thing, but couldn’t undo what had been done.
I was gutted; I didn’t know what to say. These are the types of conversation I try to avoid at all costs, but ones that I have way too frequently.
A client who was going to list their practice with us advised that they had been approached separately by a third party offering to buy them. They were apologetic because we had already spent some time with them and they hadn’t paid us any money. However, they wanted to investigate this opportunity prior to committing to going to market. Our response? Sure, no problem. It’s important to look at all opportunities prior to signing up an agency agreement.
I also let them know that we could act as their adviser throughout that process, if they wished, given our services are significantly more diverse than simply a practice broking service.
Assisting our clients to get the best outcome possible is the most important service we offer.