Why Should You Use a Professional Broker?
Irv Handler, MBA - Sales Representative, MBC Brokerage
One of the toughest decisions many Optometrists face is when and how to ease their way out of their medical careers. After spending a lifetime building their business, caring for their patients and mentoring their staff, an Optometrist faces new challenges as they plan to transition to the next stage of their lives. What will they do to fill their time? Do they have enough income and savings to maintain their lifestyle? What will happen to their patients and staff after they retire?
These tough decisions are made more difficult by the fact that Optometrists are highly skilled at providing medical care and running their practice but are not trained in successfully negotiating the sale of their practice. Many Optometrists feel their best, easiest and cheapest option is to sell to their practice themselves, particularly if they have an interested Associate. The primary motivation for selling your own practice is saving the cost of the sales commission. While selling your own practice has many advantages, it has also has a number of potential problems and pitfalls.
So, despite the cost, why should you use a professional Business Broker to sell your practice?
1. The Open Market Will Attract the Best Price and Conditions
Opening up the search for a Buyer beyond your current Associate will ensure that you get the best combination of price and conditions for your practice. A desirable practice can sometimes draw multiple offers and sell for an amount in excess of the Appraised value of the practice. But without competitive bids, your existing Associate has no motivation to offer more than the Appraised value and will frequently offer a price that can be hundreds
of thousands of dollars less than the Appraised value. Opening the bidding up to the general marketplace can attract a price that more than compensates for the cost of the commission.
2. A Broker’s Expertise Will Ensure a Smooth Sale
Selling a business is much more complicated than selling a house. The sale of a business will contain conditions that are not found in residential real estate transactions. Typical conditions may include due diligence, transferring of the existing lease, severance for existing staff, non-compete provisions, deferred payments, among others. A professional Broker can guide you through the implications of these conditions and ensure that the conditions of your offer meet your needs.
3. A Broker Will Provide Impartial and Professional Negotiations Skills
When selling your practice to your Associate, the Associate will generally have a superior negotiation position. In the absence of open market competition, the Associate knows that they are the only viable buyer and can demand a lower price or deferred payment options. Furthermore, the Associate may benefit from slowing the process down and waiting out the owner who may become increasing desperate to complete the transaction at any price. It is also possible that both the owner and Associate will reduce their focus on Revenue production during protracted negotiations, further reducing the value of the practice.
4. A Broker’s Expertise Can Save You Time and Money
A professional Broker can provide a great deal of added value services to ensure your sale is a success. In addition to locating qualified buyers and negotiating the terms of the sale, a Broker can pre-qualify and obtain Confidentiality Agreements from prospective Buyers; help the Buyer draft an offer; track the various conditions and provide waivers for each party to sign when conditions are satisfied; help the Buyer arrange financing; aid in the transfer of the existing lease and; coordinate the collection of documents for due diligence. In the absence of a Broker, these functions would be performed by the Seller or his/her lawyer and accountant distracting the Owner from his patients and driving up accounting and legal fees.
5. A Broker Can Help You Maintain Confidentiality
If you are considering selling your practice, maintaining confidentiality is absolutely essential. Rumours of an impending sale can cause anxiety among both staff and patients and may lead to both seeking out a new doctor or a new place to work. A professional Broker is well trained to safeguard the owner and practice and maintain confidentiality during the long sales process.
Allowing a Professional Broker to help you sell your practice in an open market sale will save you time, money and stress. Please contact Irv Handler, MBA, at 647-286-5839 or irv@mbcbrokerage.ca for more information.