Question
I'm getting close to retirement and getting ready to prepare to sell my practice. Should I sell it myself or consult an adviser? What are the benefits to hiring an adviser and what can I expect to pay? How do I go about finding a good one?
Answer
Most business owners only sell a company once, and selling their company represents the largest financial transaction of their lives. It is a long and complicated process fraught with traps. Hiring a qualified, independent Merger & Acquisition firm helps mitigate risk and improves the potential for a successful sale. These firms usually charge a percentage of the sale price, known as a success fee because it is only payable upon successfully closing a transaction;these fees vary based on the firm and the size of the transaction. The fee may seem steep at first, but it is a small price to pay in order to maximize the value you receive in a sale. Imagine a race car driver choosing to fire his pit crew and change his tires on his own during a race - he may save a few dollars, but will finish dead last in the race.
A good adviser will manage the entire sale process for you and make sure you put yourself in the best position to avoid failure. They will help you determine a proper asking price, prevent negative surprises from arising during the due diligence period, make sure the buyer is capable of securing financing before accepting a letter of intent, and protect your confidentiality throughout the process. They will consolidate and recast your financials to ensure a buyer understands the full cash flow potential of the practice and not just what you show on your tax returns. Hiring an adviser heightens the sophistication level of the transaction - a professional buyer will not think she can take advantage of you and buy your company at a bargain price because you do not have representation. Above all, hiring an adviser allows you to continue running your business, preventing a deterioration of financial performance during the process.
In choosing the right adviser, first verify his or her independence. Many people will offer to advise you in this area, but consider avoiding those who are buying practices themselves or directly connected to buyers, as they may not put your interests first. Second, make sure the adviser has experience selling hearing aid practices. Many firms tout healthcare expertise, but selling a surgery center or healthcare IT company does not qualify them to manage the unique aspects of selling a hearing care practice. If they do not understand the valuations and do not have relationships with the major buyers, they may not be positioned to help you achieve your goals.
