Buying or exiting a business can be an exciting and profitable venture, but it’s essential to do your due diligence.
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Buying or exiting a business can be an exciting and profitable venture, but it’s essential to do your due diligence. Whether you run a dental or medical practice, a small family-run company, or a large corporation, the general steps remain the same.
10) Get input from your family. Take some time to discuss your goals and dreams with your family. They can be an excellent sounding board.
9) Understand your financing options. Interest rates are historically low. In addition to easier access to financing, many banks are now willing to cover 100% of the purchase price plus some working capital to give new business owners cash flow for the first few months.
8) Make sure your finances are in order. Those looking to sell should make a point to gather accounting reports, bank statements, tax returns, and any other documents showing how the business is conducted.
7) Get a valuation. A professional appraiser will estimate a fair market value.
6) Curb appeal matters, but it’s not everything. Just like selling a house, simple cosmetic maintenance like fresh paint will attract buyers. But beware: you need to look beyond the surface and evaluate a business’s bones. A well-run business is far more desirable than a pretty one.
5) Think outside the city. Small-town businesses can provide the biggest opportunities. With lower overhead and less competition, you can make a great living.
4) Make your staff part of the transition. Involve them in the process, then have the incoming owner lead a few team meetings with the entire staff so they can see your confidence in their work and leadership.
3) Mentor and train your replacement. If you are planning ahead for your retirement, find a young professional who is interested in eventual ownership. Then spend the next couple of years mentoring them on all aspects of the practice and business.
2) Plan for life after the sale. How will you handle the profits? Create a financial plan for once the sale is complete. Think about what you’ll do with your free time.
1) Don’t go at it alone. Take advantage of resources available to you. Organizations like ADA Practice Transitions exist in several industries as guides to help.
