Florida Medical Practice Brokers assists sellers in taking a long-term view when selling a business. Businesses are not like capital equipment or real estate, which can be sold quickly for a high price. Instead, they require extensive preparation to ensure that the sale yields maximum value. Our most successful deals have been made possible by the patience and dedication of medical practice owners to prepare their business for sale at the right time, for top dollar.
If you know you will want to sell your medical practice in the coming years, you could reap significant benefits by planning ahead. Florida Medical Practice Brokers is a professional business intermediary that can help you sell your business at the right time and for the highest possible value. This planning will let us:
- Assisting you in building your business value
- Maximize our knowledge of your practice
- Find the top potential buyers for your medical practice
This blog will be devoted to the first topic – How to Build Business Value.
These are the key steps that our brokers can help and advise you on during the years leading to your business’ sale.
Learn the Different Types of Value
It is important to understand the difference between these two types of value. The academic value is determined through a professional business valuation. This value is determined using a complicated formula that takes into account the tangible assets of the business, cash flow, industry averages and multiples. Next is the true market value. This value not only takes into account the academic value, but also considers what buyers are willing and able to pay in the marketplace.
Many small and medium-sized businesses have few tangible assets, such as inventory, vehicles and equipment. These businesses’ value is primarily determined by earnings and intangible assets. This includes things such as reputation, market share and employees. These intangible assets can increase your business’ true market value. Start thinking like a buyer when you begin to consider your practice’s intangible and tangible assets. You should look closely at the things that can increase value for them and any problems that could compromise the value of your company.
A business intermediary who is well-versed in the industry can offer valuable insights. Experienced brokers will see the value of your product from the buyer’s point of view and combine it with a deep understanding of market conditions to make a winning sale.
Find Your Niche And Build It
It doesn’t mean you have to be all things to all potential buyers. Buyers will pay more for niches that are difficult to enter. Consider those intangible assets. You might be able to offer a unique service or business location that gives you an advantage over your competitors. You can find the niche that gives you the most competitive advantage and capitalize on it.
Clean Up Your Financials & Assets
A professional business broker can help you to recast your financials in a positive light. When you are cleaning up your finances, keep these things in mind:
- Make sure your asset records are current.
- Improve your ratios: working capital, debt to equity, price-to earnings, return on equity and more. You may need financial advisors to help you with this process.
- Reduce non-business expenses from your income statement. Do not make rash moves to reduce your tax bill. This could lead to bad outcomes when you sell.
- Cash flow is key to attracting buyers. Ensure that you maximize your income.
- Reassess your assets and dispose of any unproductive inventory or assets. Remove assets that you use primarily for personal use.
- Organize your business records, including sales and expense reports, financial statements and tax returns.
Develop Key Employees
If the business is too dependent on the owner for its success, buyers won’t pay top dollar. Start delegating key tasks to employees and involving senior staff members in decision-making. It will pay off when you can show that your company’s success depends on your team, not you.
Keep A Record Of What You Do
You should have a detailed record of your operational processes, strategic plans, job descriptions, and other details so that you can give them to the buyer. Written records and plans can give buyers more confidence in their ability to replicate your business’ growth and help them obtain financing.
Establish Relationships and Reputation
Name recognition, customer awareness, reputation, and business relationships are all key factors in increasing the value for your medical practice. These intangible assets can be more valuable than physical assets. If you find yourself dependent on a few referral sources for your business, diversify your accounts before it’s time to sell.
Remodel, Clean, and Organize
The first things any home seller does when they put their house on the market is clean up clutter, make simple repairs, and freshen up how the house looks. These are things that business sellers don’t often consider, but we know from experience how well-maintained properties will sell for the highest price. You should clean and organize your facility, even if it is rented rather than owned. It will convey a feeling of quality and efficiency that will translate into the value you receive from the sale.
The buyer’s perception of risk is a major factor in determining whether they are interested and willing to pay top-dollar for your business. When you are preparing to sell your practice focus on the areas that could raise red flags for potential risk.
- Concentration of payors or providers
- Referral source dependence
- Absence of contracts with key employees
- Inadequate regulatory compliance
- Legal issues
Get started now!
Although we understand that you might not be ready to sell your company today, you will see the extensive list of things you need to think about when you are trying to sell your medical practice. These key steps can help you maximize the selling price of your business if you start them early.
Florida Medical Practice Brokers is here to help you during this time of preparation. We will help you to understand the best steps to take now, so when it comes time for your business to go on the market, you are confident that it will bring you the highest value and the best results. We’ll learn valuable information about your practice as we work together. This will allow us to position your medical practice in the market when it’s time for you to sell.
Contact us today to schedule a discovery call and learn more.