Selling a healthcare clinic or practice can be frustrating enough. But when deals fall through it can be distressing. Deals can fall through for a number of reasons and can be costly and frustrating for all concerned. Below I have listed some causes of deal disillusionment to help you avoid reaching this impasse.
Lack of Vendor Transparency.
- As differences of opinion regarding the valuation of a practice is common, it is essential the vendor is prepared to be completely transparent with all aspects of the practice including profit and loss statements, patient statistics, employee contracts, lease agreements and so on. There is no point hiding anything as any prospect doing his due diligence will find out and this will drastically affect their impression of the practice and its asking price.
As discussed above, variances in opinion with regards to the value of your practice will occur. What’s better, to sell for a lesser amount or close the doors and get nothing? Be prepared to be flexible and factor in some negotiation room.Be flexible with availability for inspections. There is no point being annoyed at the inconvenience of being available for an inspection. If you want to sell, you need to be positive and enthusiastic.
- Lack of documentation and or poor records
Poor practice records demonstrate bad administration practices, which will put off any prospective buyer.
Ensure the following documentation is in order:
- Your lease has been renewed with decent renewal options,
- Your supplier contracts have been renewed;
- Associate and employee contracts are up to date;
- Practice manual is up to date;
- Lack of commitment
Sad but true, there are tyre kickers out there. They’re sort of serious but really haven’t thought through what they are looking for, so they look at everything. Unfortunately, they often waste a lot of everyone’s time.
- Deal fatigue
A period of negotiation is a given and it should be welcomed with open arms. You are close to selling your practice. However, if this process drags on too long, due to slow response to questions etc… the prospect will have time to question his decision making. The longer they have time to think, the less likely they will commit.
- It’s just not right
Sometimes after a period of exchanging information it becomes clear that the practice is just not the right fit. It could be due to a number of reasons from techniques, location, fit out, management style and so on..
If you are seriously wanting to sell your healthcare practice and you need to earn the trust and goodwill of the prospect.
- Be prepared to be transparent
- Be prepared for questions – lots of them, and answer in a timely manner
- Be as flexible as possible with your availability
- Get your records in ship shape order
- Be patient