Securing a Successful Transaction is so much more than Simply Finding a Buyer
With most practice transactions taking place off market and without the services of a practice broker, we are bound to find some parties who felt the transaction was a success, whilst others will no doubt have wished the outcome was better. The sale process is long, detailed, complex, and at times, trying. With experience comes the familiarity of what regular takes place, the common terms and conditions, the positives and pitfalls that can arise in such an agreement. However, we can’t be fooled into thinking that once a buyer for a practice is found, the deal is done.
Many practices throughout Australia are being approached almost daily. The market is currently swamped with purchasers, particularly for good firms and for those located in the city and suburbs of all major centres. So for some, they may proceed through the steps of promoting their practice and qualifying buyers, while others may proceed with a suitor who has approached them out of the blue.
However, in doing so, it is imperative to consider what and who will be the most suitable purchaser for your firm. A few practitioners will sell-up with the first offer, take the money and run. But most vendors tell us that it is imperative to them that their clients and staff are as well looked after as part of any sale as the financial benefit the vendor receives from the transaction.
That being the case, it’s essential to know …….
Do they have the money to buy your firm?
What are they proposing to do with your staff?
How do they service their current clients and does this suit the way in which your clients are currently serviced?
Are they culturally a good fit?
Are they proposing to relocate the firm?
Are they the most suitable party to buy the firm? Is there a strategic benefit or advantage for both sides as a result of this acquisition?
Selling to anyone who does not tick these and several other boxes is likely to lead to disaster. So, there’s simply much more involved than selling to the first person that knocks on your door. Ideally you will be able to attract multi-interested parties at the same time to really drive the best outcome. But often then comes the hard part, the negotiation of contracts and terms and conditions. This step can, and is, significantly impacted by those providing advice, your lawyer and the like. Receiving poor advice, or advice that is overly arduous, not being familiar with current terms and conditions, can lead to what seemed like a good deal to fall over. Either side getting stuck on unrealistic pricing and unreasonable terms and conditions will lead to continuing failure.
Unfortunately many vendors and purchasers have and do learn the hard way when it comes to securing a successful transaction. The difference between success and failure is so much more than selling to the first party who comes knocking at your door.