On top of your new year’s resolutions list may well be that life-changing decision that sees you transition into being your very own boss, complete with owning your own practice. It may not be for everyone, but if you do find yourself gaining traction on this path, make sure you follow our handy tips!
- Get a good accountant. What with loans to be had and payments to be made, you’re going to need it (unless you are one yourself, in which case, you’re already killing two birds with one stone).
- Find a solicitor you can trust. Chances are you will be spending lots of time together on this journey, so make sure you’re happy with your legal counsel.
- Be confident in the valuation. There are several things you should consider when assessing the valuation of the practice – with, of course, the guidance of specialist advisors. What services does the practice offer? Does it come with tangible assets, such as equipment and furniture? What about intangible assets, such as its brand and patient/client lists? Is it profitable? Are employees paid in line with the local competition? Are the premises owned or rented? Is the business managing its debt efficiently? A competent broker should be able to give you a proper insight into the value of the practice. An independent valuation is vital - do not just rely on the word of the seller.
- Account for all costs and cash flows. From stamp duty to solicitor fees, buying a practice comes with a lot of expenses. So make sure the business is truly worth it before you start ploughing money into it. Make sure, also, that you take every potential outlay into consideration, for example equipment and building infrastructure. Bottom line: Do your homework – you can never do too much research.
- Have a sound business plan, complete with realistic figures. This should include a brief summary of your proposal, market and competitor information, proposed working arrangements and opening hours, financial forecasts and staffing arrangements. “Know what you want in terms of business sector, size, profitability, geographical location and staff”, advises Clinton Lee, founder of UK Business Brokers.
- Staffing considerations. It may be that part of the transaction includes the existent team, which is great for things like client retention and continuity. However, if this is the case, make sure every staff member is competent and up to the challenge of your particular vision, as well as using it as an opportunity to assess protocols such as annual leave.
- Get insurance. This is vital – especially if you’re buying in conjunction with other partners. A good policy will cover you from any risks involved in the purchase of the practice.
- Accept help, from whoever is willing to give it. There are probably more people around than you realise who have been on the exact same journey as you – not to mention reputable professionals who can – and should – be on board to keep you in the loop on everything that is going on.
- Voice your concerns. If at any point you are unsure about anything, just ask!
- Take it slow. There really is no rush.
- Choose the right lender. Luckily for you, we know just the people!
Happy new year!