Selling a chiropractic practice in the UK this year?

With the activity over the past 18 months, you will likely no longer achieve the 'top dollar' price in selling your clinic.

Please do not take offence by this though; I am not suggesting that performance is any less, as in most cases it is not. But the capital value of assets has deteriorated and I only mean to align expectations with reality as soon as possible as over-pricing will result in delays to a sale. (As a quick side note, from the moment you put it onto the market for sale, until completion, you should expect it to take at least two months, probably three in this climate. At least.)

Before we get to the price though, we should quickly consider what you are selling? With the prevalence of limited companies over the past few years this might not be as simple as you think. As you may know a limited company is a legal entity in its own right so you can actually sell the limited company as a whole; or the limited company can sell the clinic, leaving you to tidy up its affairs and dissolve the company itself thereafter. Tax law has doubled in complexity over the last 10 years and rears its head wildly in this very complex area and, as each case will be specific, I just cannot provide a generic answer. With the kind of figures that are thrown around during a sale, you simply must have an experienced professional on your side.

So what price should you pitch it at? I would love there to be a really simple formula, perhaps linked to income, but we have just seen far too many variations in how a clinic is run for that to universally applicable. Almost all other businesses use profitability as a means and we believe that is the most appropriate for chiropractic as well. As I have already mentioned, over-pricing results in time delays, whilst under-pricing leaves money left on the table. The trick is to get the balance correct and I believe it is human nature to set your goals high - just be mindful of your aims. If they have a timescale you may need to adapt.

As profit is so important you should have the financial figures for the clinic to hand for general use in the sale. In this world that now means today's figures, not those from your last set of accounts, so you may need to get your bookkeeping up-to-date. ? 

The next step is to consider marketing. This is a funny ol' game because many owners will rightly be protective of their clinic and be reluctant to release what has actually become quite personal information. That said, the general idea in the marketing phase is to reach as many people as possible to increase demand and increase the price. This dichotomy can never be truly overcome and needs a little bit of good will from both parties although there are a couple of mild protective measures we can put in place including Confidentiality Agreements if required. Asking about the enquirer's financial position is also useful as they will likely need a 25% - 30% deposit to become a serious contender in the current lending climate.

Although you may need substantially more time if you were truly 'grooming' your clinic for a sale (as that would require a few years of increasing figures etc) it is not too late to improve the all-important first impressions. Whilst I strongly believe it should be tip-top already for your customers, a lick of paint never goes amiss. As this may be your only business sale to date, there are also some common sense principals to adhere to during the whole process, politeness and understanding being important for both the sale and any transition process.

A final thought before you move to Barbados, you should be aware of how much your final tax bill will be along with any Capital Gain on the sale itself. Because of the way the UK tax system is set-up, this may not be until the January next year so set aside the sum to avoid the heartache.

Buying

Financing it
30% Deposit
% rate
Who to go to

Choosing the clinic
Location
Profitability

Agreeing the deal
Shares or Trade and Assets?
Financial figures (its more about expectation)
Price?
Goodwill

Tax implications
Incorporation

Practical Aspects
100% treatment vs marketing etc
Support

All too often we have seen poorly formed companies with a variety of weaknesses and unfortunately this can come home to roost at the point of sale.