Please Exercise Extreme Caution, Practice Owners
It would be prudent for practice owners to exercise extreme caution when considering selling a share to a large corporation. There is a new corporate group on a road trip looking to purchase into dental practices by way of Joint Venture Partnerships. This organisation is suggesting you can release part of the equity in your practice and they will help you better run your practice.
Hmmmm. I would want answers to the following questions FIRST:
- If they buy part of your practice, is the remaining equity share guaranteed to be purchased at a pre-determined amount in the future? IN WRITING?
- Who else would buy your remaining share? No one would want to buy a minority share if a corporate owned the rest, would they?
- How long is the minimum buyout period for the remaining percentage?
- How can they enhance your practice if it’s successful and running smoothly now?
- Who is valuing your practice and what method is being used?
- What if you want a second independent opinion on valuation? Is that negotiable?
- Can you see the full contract up front?
- Who is funding this operation and are they a multinational well run organisation?
- If so, how long have they been around, do they have a prospectus or history?
- In other corporate situations, control has been lost. How does this differ?
With many years in the dental industry, I have seen a lot of principals come and go, we have seen many large Dental Corporations buy into practices, and there have been good partnerships and bad partnerships in some.
But what I don’t understand is this question below:
If you have a successful dental practice, you must be doing everything right – any lending organisation I know would fund anything you wanted, would they not??
Why give up control?
Be wary! Get a second opinion, in fact get a third opinion, before you go any further! I would like to help point you towards an independent opinion and valuation in this situation before you take any action either way.
Practice Readiness and Attractiveness Program
Having a practice properly prepared for sale by PracticeLink.com allows the principal to take the practice to market with absolute confidence in its value to a prospective buyer. Thorough preparation also ensures the business is organised for buyer due diligence and ready for transition to new ownership. As such, it becomes a “Best in Class” practice with a much greater chance of successful acquisition.
PracticeLink.com Practice Attractiveness and Readiness report delivers a comprehensive and objective review of your practice readiness for sale within a specified time frame.
We review with you how we arrived at our value assessment, and how any recommended improvements are likely to affect value and saleability, while also providing strategic benefits to you, the practice owner. You also receive a concrete action plan with resource and timing estimates to tackle any fine tuning that may need to be addressed to maximize selling price.
Our written Practice Readiness report and oral presentation contain a Comprehensive Practice Review (CPR) package, which includes the following:
- Custom 22 page practice history and company Information Memorandum
- Management and personnel overview
- Actual and forecast financials
- Summarised copy 5 page Information Memorandum
- Terms and Conditions of sale
- Priority to any potential deal-breakers that might spook a cautious purchaser.
As a client of PracticeLink.com, you can expect the tools and information you need to achieve the results you deserve, plus a coach on the sidelines to help you accomplish your goals.
Every practice where we have been involved in the planning and sale process has achieved successful outcome and satisfactory sale price. How? Because we work in conjunction with the owners, their accountants and specialists to create a bullet proof Practice Readiness and Exit Plan.