The Basics
Before you consider selling your practice yourself, ask yourself if you are going to have the necessary time to do a thorough job without it affecting the production of your practice. Also, ask yourself how much will you be saving? If you decide to do it on your own, here are a few points just to cover the basis.
Get an accurate, professional appraisal of your practice.
- Hire a qualified appraiser with formal appraisal training.
- Your final outcome will be determined by your starting price.
- Spend the necessary time completing your practice information for your appraiser. That little extra time can make a BIG difference in your price.
Tips: Ask your prospective appraiser where they received their appraisal training. If they are self taught……. beware!
Put together a marketing plan.
- How will you market your practice to buyers?
- How much money can you afford to devote to advertising? Call the local and national journals to determine how much it will cost for advertisements.
- Who will create your prospectus (your practice info package)? Buyers expect an info package to review so they can compare to other practices.
- How will you keep your sale CONFIDENTIAL! You don’t want prospective buyers knowing it’s you that is selling before you know they are serious and have signed a confidentiality agreement.
- How will potential buyers find information about your practice on the Internet? You’ll want potential buyers who begin their practice shopping on the Internet to find your practice. Be sure to build a website to help sell your practice.
- Who will take inquiry calls and schedule appointments? You’ll want someone to be available to answer inquiry calls and schedule appointments. Be sure to schedule showings as quickly as possible before they lose interest.
Tips: Ask your state and national journals for a discounted advertising rate for multiple placements. Make sure that the person who is taking your inquiry calls pre-qualifies all your buyers before showing your practice.
Confirm that the potential buyer has pre-qualified for a loan.
- If they are not pre-qualified, ask them about their credit status and how much money they have for a down payment.
- Make sure they are not restricted with a non-compete agreement with their previous employer.
- You don’t want to spend several months working with a prospective buyer later to find out they can’t get a loan to save their life.
- By working with unqualified buyers, you waste valuable time and the opportunity of completing the sale with a buyer that was qualified. Because of this factor, statistics indicate that FSBO (For Sale By Owner)business sellers average over 2 years to complete their sale with many business owners never selling their business.
Negotiations, Contracts and Closings
- Are you prepared to negotiate the contract?
- Do you know what your legal responsibilities are as the seller?
- Do you know what your best tax allocation is for the IRS?
- Be aware of your state’s Bulk Sales Law before you close the transaction.
- Who will write the contract? Will you need to hire an attorney? If so, what will be the attorney’s fees?
- Will you or your attorney and accountant be the one to negotiate with the buyer’s attorney and consultants. Remember, they expect to be paid even if the deal falls through.
Tips: Get some experienced advice on how to hire your attorney. Hiring the wrong attorney can be a NIGHTMARE in terms of cost and end results.
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