There are four key considerations for practice owners in preparing their businesses for sale and making them attractive to potential buyers
A key part of my role in No More Practice 4 involves helping advise Jim Taggart on the process of maximising his earn-out in selling his practice. Jim has built his business over up over many years to become a well-established practice, and there were a number of things that made his business attractive to Austbrokers.
Potential is the first key. If I was looking at buying into a business, the first thing I’d look for is the potential; I would be asking myself: “Has this business got the potential to provide growth and deliver what I’d be looking for in terms of the value of this asset?” If your business has no potential, why would anyone buy it?
Once you can see a business has potential, then it’s important to have a look at the business itself. Again, Jim had a sound business in this regard. So the systems, the processes and everything that it takes to run that business need to be solid, strong and sustainable. A business without systems and processes is going to be nightmare for any buyer to run.
The third key is the staff. Jim is a people person with both clients and staff, and some of his key advisers have been with him a very long time. So if I was looking at buying a business I would want to look at the staff, understand their roles and be clear on their ongoing commitment and engagement in terms of keeping that business and its client base going.
The fourth and final point is the financials. If the above three points check out, then obviously you need to check out the financials and conduct a due diligence to make sure the figures stack up and match what a seller is presenting you with. Again, Jim was able to demonstrate he had a solid and financially healthy practice to Austbrokers.
These are the four main bases any potential buyer of your business will cover off, and it is essential that you are able to demonstrate transparently and robustly that your practice meets a potential buyer’s expectations in each of these areas.
