You may think that your business’s financial performance is the only thing that matters to prospective buyers, and while there’s no denying that it is vitally important, there are several other important drivers that motivate buyers.
For many veterinary practice owners, by the time it comes to consider selling their practice, it represents decades of hard work and toil. Bonds have been made with the local community, and friendships have been formed with both clients and staff members. Care and attention have been taken to build a vibrant and service-driven business, so surely, when it comes to selling, the business broker engaged in finding a suitable buyer should invest the same care and attention into presenting the practice in the Best Possible Light.
Many business brokers think a business’s financial performance is the only thing that matters, and there is no denying that it is vitally important. However, several drivers motivate buyers.
Best Possible Light – Financials
Last year’s published accounts and tax returns only truly tell part of the story, and very often, they do not reflect how the business could be run post-settlement. Accounts need to be ‘normalised’ so a buyer can gauge how profitable the practice can be going forward and show the business’s financial status in the best possible light.
What does ‘normalising accounts’ mean? Well, within the practice’s published accounts, there can be a myriad of legitimate business expenses that may be outside the day-to-day running of the business. For example, a travel expense to attend a specialised course, a motor vehicle that may not be required to run the business, or an anomaly such as a one-off legal expense.
While poring over a client’s accounts, anomalies often appear, such as excessive bookkeeping and accounting fees; however, these can also be normalised when industry benchmarks are applied. This meticulous preparation means that as a broker, not only am I presenting the business showing its true potential, but I also know the business inside and out, so I can confidently answer all the questions a buyer has. This is a classic example of measure three times, cut once.
Best Possible Light – Information Memorandum
My daughter is 16 years old, and her bedroom is quite frankly a bloody mess on most days of the week. But if I were to place my house on the market, I would be appalled if the real estate agent took a few photos of her messy room with an iPhone and used them in the sales brochure. However, this is the standard many business brokers apply when presenting a vet practice. Well, not on my watch!
If you use an Information Memorandum (IM) to engage prospective buyers, maybe even from interstate or overseas, the IM should present your practice beautifully. In the case of Ray White Practice Sales, that means sending in our professional photographer. It also means tidying the rooms, moving boxes, and removing items from view that may make an image less appealing.
At the same time as taking the photos, we make a walk-through video of the practice and grounds, send up a drone to show the building and location, and create an accurate floor plan. We want our buyers to be so impressed by how we present the practices we represent that they can’t wait to view them in person.
Best Possible Light – Advertising
Stopping advertising to save money is like stopping your watch to save time.
– Henry Ford
To achieve the best outcome for you as the vendor, your business broker needs to have as many buyers at the negotiating table as possible, not just one. To engage multiple buyers, you need to get your practice in front of them and not just rely on buyers visiting a website
For example, at Ray White Practice Sales, we take a multimedia approach promoting the vet practices we represent via our extensive email database of registered buyers, social media, full-page adverts in publications such as Vet Practices magazines, and working with online platforms such as Vetanswers. We add new advertising mediums monthly because more ‘eyeballs = more buyers’.
Selling your life’s work can be emotional
Selling your life’s work is nearly always an emotional time and represents a huge lifestyle change. After the years invested in creating your business, your business broker should respect this investment and present your practice in the Best Possible Light.
At Ray White Practice Sales, we cannot promise a certain outcome, but we can promise we will try everything possible to achieve the outcome you desire and will never stop trying.
If you have any questions or want to arrange an obligation-free appraisal of your vet practice, call me on 0416 190 000 or email [email protected].
