Is your medical practice attractive enough for buyers?

04 June 2019 | Clinic Owners and Practice Managers | 3 minutes read

Is your medical practice attractive enough for buyers?

Whether you are thinking about selling your medical practice or you have already set your mind to it, this article sheds light on whether your practice is attractive enough to buyers.

What our buyers are looking for

Alecto works with a lot of large medical groups around Australia. While we’re typically engaged for consulting projects and assisting with the recruitment of GPs, but we are also able to help connect potential buyers and sellers of medical practices.

Here is what the buyers are typically looking for in their acquisition strategy:

  • Busy & thriving medical centre
  • Good practice location, with easy access and lots of parking
  • Established patient base
  • Minimum of $1.7 million revenue per year
  • Loyal team of GPs, with a minimum of 3.5 FTE
  • 7+ consulting rooms (or room to expand if you have less consulting rooms)

Start planning early – maximise the value

Planning ahead is the key to a successful business exit. If you are the owner and you’re the head GP at your practice, it’s even more important to plan ahead as it can add a lot of value to the business if you offer to stay on for an agreed upon period after the sale. After all, you carry a lot of goodwill that could potentially go away upon leaving the practice, a risk that buyers are very aware of.

By offering to stay on for a period after the sale (2-3 years), the buyer can better manage the transfer of goodwill and the transition and therefore is willing to pay a premium.

How much is my medical practice worth?

Many practice owners get carried away with their retirement dreams so much so that they have set their mind to an astronomical sale price. It’s not uncommon that expectations are out of touch with the real value of a practice. So firstly, you have to be realistic. Secondly, don’t settle for the value you have calculated on your own. Get a second and even third professional valuation done.

Want to know what your business is worth?

Schedule a free 15 minute phone consultation with one of our consultants.

What documents do I need to get ready

Getting sales ready means to have the right documents ready for buyer prospects. Here is a list of common documents potential buyers want to scrutinise before they make a decision:

  • Profit and Loss statements (preferably for the past 3 years);
  • Tax returns for the past 2 years
  • Fee schedule
  • Summary of FTE’s
  • Leasing documentation of medical equipment
  • A list of major medical equipment
  • Leases on the premises
  • Photos of the practice
  • A floor plan

If you have any questions, please don’t hesitate to get in touch with us on info@alecto.com.au or call us on 1800 604 332.

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