Good and relevant advice relies on sourcing experienced and expert advisers with knowledge in your area of practice. It also relies on knowing how and when to use these advisers.
Choosing your adviser
Once you have identified a target practice which meets your needs and objectives; and you have completed your preliminary negotiations and assessment of the practice, you’ll need to get your team of advisers together.
This is a vital step. Seek independent and expert advice early. Also move quickly.
Your advisory team should include:
- An accountant with expertise in the profession;
- A lawyer with related experience;
- A finance broker to assist with the finance analysis; and
- A business valuer.
How early in the process you involve your advisers will depend on your personal experience in buying practices, knowledge and skills. Ultimately, it is your money and your decision. While many of the above advisers will be inherently conservative and risk averse, to buy a practice you will need to acknowledge and accept risk.
Seek their advice but the decision is yours alone!
Issues in assessing advisers
The key factors in assessing the suitability of an adviser include:
- Qualifications, skills, experience, and expertise;
- Your ability to work with them and trust; and
- Cost and contribution.
www.practice4sale.com.au includes a list of service providers and advisers.
You should also consider bankers as part of your advisory team. Particularly bankers with expertise in your profession or practice area.
Questions for advisers
Here are a few questions you may like to ask of your potential advisers:
- How many practice purchases have you worked on?
- What was the outcomes you achieved as an adviser in the transaction?
- Did all the purchases settle? If not, what proportion did?
- How long did the process take from engagement to finalisation?
- How do you charge (i.e. fixed cost, hourly rate, or commission)?
- What were your total fees in the process?
- What range of transactions do you normally specialise in (i.e. size or total value)?
- What are the common problems or issues you have confronted in the purchase of a practice?
- How did you add value to the transaction?
Next week we will consider some comments on the roles of advisers.
Consider the options available for you and use www.practice4sale.com.au to buy or sell a practice.
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