Frequently Asked Questions About Medical Practice Sales

Typically, the process evolves through various stages as below

• initial meeting
• business appraisal
• contract for listing – an executed contract between us and you outlining the agreed terms of sale
• information memorandum and business preparation for sale
• marketing and buyer attraction
• vetting of interested buyers including execution of confidentiality agreements and financial assessment
• offer negotiation to acceptance
• deposit payment – held in trust by Medical Business Brokers
• due diligence
• preparation and agreement on a sales / purchase agreement ( SPA )
• valuation of stock
• settlement / completion

The two factors that affect the timeframe the most are the ability or preparation of the buyer to obtain or have pre obtained finance to complete a transaction and the in house preparation of the seller to have all documentation ready and in order for a swift due diligence assessment. A targeted timeframe for completion from the time of offer acceptance is approximately 10 weeks however this can vary depending on the above factors.

Typically, most business owners have high regard and concern for the ongoing employment prospects of their staff. There are no set rules when it comes to incumbent staff remaining in their existing roles. If it is of primary concern to sellers, then it can be a key point in vetting for potential buyers. Some incoming practitioners may wish to bring their own staff or management, others may wish to keep the incumbent staff to support them in the business.

If you have stock for sale with your business, the value of such is normally undertaken on the day of completion. Some owners / purchasers like to engage the service of a registered valuer, however it is possible if the seller has a clear inventory of stock and  evidence of its value at the time of purchase from suppliers for both the seller and purchaser to cover off the inventory and calculate the value. As stock volume and value can changes from the time of offer to the time of settlement, the Stock At Value (SAV) is added onto the agreed sale price at settlement.

Depending on the nature of the purchaser, practitioners may sell on a Walk in Walk Out ( WIWO ) basis with the new practitioner taking over after a short hand over and orientation period.  Some purchasers however, might want to negotiate into the sale that the selling practitioner remains with the business for a specified timeframe. This is particularly common when corporate firms take over small practices as they often require the practitioner to remain to continue the business while new staff are sought and integrated. Timeframes for remaining in a business could be up to a year or longer. The more flexible you are as a seller in this regard, the greater your chances of opening your business up to sale to a range of prospective purchasers.

MBB will discuss a marketing plan with you at the time of listing. There are a range of options from internet and professional journals to direct marketing to our database of prospective buyers and liaison with our corporate contacts. In many instances, we can attract buyers with minimal marketing using our internal contacts. Discussed in the marketing plan will be our protection of your confidentiality as appropriate.

For larger sales where due diligence and the drafting of a Sales and Purchase Agreement (SPA) is needed, then it is usual to engage the services of experienced professionals. MBB can suggest experienced commercial lawyers who can provide support at a sensible cost to sellers.