First Impressions

Try as I might, I can’t think of a better phrase than the trite admonition, “you only get one chance to make a first impression”, to describe a buyer’s first reaction to our listings. Naturally, we have prepared ourselves during the valuation process for discussions on these items but sometimes the answer to their questions can be uncomfortable. If you are considering the sale of your practice, be advised of a few of these early talking points:

  1. No Website. Right or wrong, younger buyers will try to get early information about the practice and with no website they may assume the seller is a dinosaur before ever seeing the office. This doesn’t have to be fancy and is not a hard or expensive problem to fix.
  2. Dated office décor and design. Buyers looking for a career opportunity seemingly have little interest in remodeling your office. Some things can’t be helped but at least be sure the office is clean, fresh and uncluttered. Yes, they will notice to old carpeting. Be aware too that ownership of the building is not necessarily a good thing.
  3. Inadequate revenues. There is no getting around the fact that today’s buyers need around $600,000 in annual collections to pay the overhead, taxes, student loan and acquisition debt in order to have something left over for living expenses. “Potential” is a hard sell and even harder to finance so don’t waste your time. If your revenues are not at a sustainable level, maybe another exit strategy is called for.
  4. Technology is expected and they will see those dip tanks. Modern buyers will not practice a day without digital radiography and increasingly, paperless records. If you are still a couple of years away from retirement, buy the digital hardware and software and enjoy the increase in productivity. If you are planning to retire at the end of the month, be prepared for a substantial adjustment to the sales price.
  5. Dated equipment is hard to hide. Make sure everything is clean, well maintained and free of tears and holes in the upholstery. This is actually a fairly easy category to fix as anyone that can fog up a mirror can buy all of the new equipment they want so to the buyers, be advised that unless we are talking about beat up, antique chairs and units, patients don’t care. Be careful how much you spend just to get that “new car smell”.
  6. The Staff can kill you. The first expense category buyers will focus on will be your staff costs. While it may be an asset to you to have long-term employees, we find that they are often at the top of the pay range and are sometimes being paid for days the seller is no longer working. Be careful with those automatic cost of living adjustments as the buyer may fear having to come in and “reorganize”.

       Steve Wolff, UMKC Class of 1977