Selling a practice

General

How long will it take for my practice to sell?

In short, how long is a piece of string? There is no guarantee that your practice will sell at all, let alone within a certain timeframe.

In 2008, our answer to this question would be that the average time practices are taking to sell is 6 months. This is from the start of marketing to the completion of the sale.

Now, in 2009, with the UK economy the way it is, the average time is likely to be greater, maybe up to 12 months. If timeframe if the vital factor for you, then other factors such as the price may need to be compromised.

Do I have to have a practice valuation prepared before I sell?

No, you don't have to have a practice valuation prepared before selling but it does have benefits.

Initially, pitching the price at the right level is very important. If it is pitched too high, then fewer people will enquire and if it is priced too low, you could be doing yourself out of some profits.

Secondly, the valuation report is a handy document to be able to provide potential buyers as it holds all the information about the practice in one, easy to read, report.

Of course, if you have an idea in mind of the price you need or want to achieve from the practice then the exercise of a practice valuation could be a waste of time, especially, if after the report has been prepared, the value is not what you were expecting.

I need to sell really quickly, what can you suggest?

If time is the deciding factor for you, then we can suggest a few things to consider:

1) Get the practice marketed as soon as possible, if it isn't already. finance 4 chiropractors have a marketing service which gets the details of the practice out to a wide selection of chiropractors.

2) Consider lowering the asking price, if you can afford to. This will attract a wider range of buyers.

3) Do everything you can to make your practice attractive and the offer appeal to buyers. This can even be starting with a new coat of paint as first impressions can go a long way.

4) Get a professional, your accountant or the team at finance 4 chiropractors to point out the positive points about your practice, then these can be focused on when trying to make a sale.

How many practices have been sold through finance 4 chiropractors?

We assist with the sale of between 10 and 20 practices per year.

The marketing process

How do you market the practice to attract a buyer?

Here is our general marketing approach:

. Place advert on our successful finance 4 chiropractors website. Our monthly visitors based on May 2009 is over 1000

. Send advert link to our mailing list, which in May 2009 consists of 50+ chiropractors actively looking to buy a clinic in the UK

. Write advert and place in 2 selected trade magazines (and their websites). This could be the UCA, BCA or SCA. We can place it in all 3 if required but the fee may change to cover the extra costs.

. Place the advert on any relevant other websites, usually free issue ones.

. Send advert link to relevant other chiropractors on our database.

. Place practice photo and 3 key points in our newsletter, which currently gets emailed to a mailing list once every 3 or 4 months.

. Take details to any trade seminars we attend whilst the practice is on the market with us

Do you write the advert or do I?

If we have prepared the practice valuation then we are more than able to write the advert for you. If we haven't, as we don't have information readily available we ask that you start the advert and we can then check and add any extra information we may think necessary. We ask you to complete a fact sheet so we can keep this on file so where we can help with the wording for the advert, we will.

Will the asking price be shown on the website advert?

This is really down to you. Some chiropractors prefer not to publish the price and just state "price on application". Others choose to state it from the start to avoid time wasters. This is something we are happy to discuss with you and maybe draw some points to your attention to help you make the right decision. We can always change the advert once it is placed anyway so if it is left off to start with it can always be added if no-one is enquiring.

Do you advertise in the trade magazines?

Yes, we advertise in 2 magazines for you included in the price. This can be a choice from the BCA, UCA or SCA (or another in more relevant). We can place it in all 3 if required but the fee may change to cover the extra costs.

If BCA In-touch magazine is also required then we may also need to review the costs involved.

Do you advertise on other websites?

We place adverts where relevant on planetchiro which is a website based in the US and is free of charge.

We are happy to look into other websites if you have specific requirements.

What information do I need to provide to interested parties?

If you have had a practice valuation then this is an excellent start. This report will give the potential buyer a good insight into the financials, background and full details regarding your practice. Often, financial accounts (as recent as possible) will still be requested, especially if the buyer's accountant is involved.

If there has not been a practice valuation carried out then we would suggest you putting together a 1-2 page leaflet that can be emailed to interested parties with extra information on. We can provide guidance on what areas need to be covered. Again, financial accounts (as recent as possible) will be requested and / or management accounts so an up-to-date picture of the practice financials can be obtained.

What if my practice isn't selling?

If your practice isn't selling then there are a few things to consider:

. Is the price right for the current market? If the price appears to be the "sticking factor" then maybe you should consider a practice valuation to find out a realistic market price.

. Is there one common thing that is putting people off? If so, have you addressed this?

. Is it difficult for the buyer to obtain finance? If so, have you considered or are you able to offer finance options?

. Would you consider appointing a senior associate to manage the practice for a period of time until you find a buyer? This would mean your plans may not have to be put on hold.

. Speak with your assistant at finance 4 chiropractors. There may be other marketing opportunities that could be discussed and considered.

The service

Why should I use finance 4 chiropractors to assist with the sale of my practice?

. The website gets over 1000 unique visitors per month (based on May 2009), the practices for sale pages by far being the most viewed.

. We have a database of over 50 people who are actively seeking clinics to buy in the UK

. We have over 15 years experience working with chiropractors so understand in great detail the way your profession work

. We have developed a value for money service to enable you to make the most from our experience without breaking the bank

Who will be my point of contact during the sale process?

Claire Bennett is the current team co-ordinator and assistant for marketing chiropractic practices.

Ross Martin may also get involved where more technical assistance is required as he carries out the practice valuations.

Mike Hutchinson, the director, is available if needed to assist with negotiation although this is not included in the service package and will be subject to an additional fee.

How much does it cost to list my practice with finance 4 chiropractors?

Currently we have 2 price structures, designed to give you the choice on how you would like to work with us. The service received is the same.

Option 1:
. Monthly fixed fee of Ł150 plus VAT
. Minimum 3 month commitment
. Payable on invoice, usually issued in advance of the month

Option 2:
. One off set up fee of Ł150 plus VAT
. No minimum commitment
. Leads charged at Ł35 plus VAT
. Offers made charged at Ł350 plus VAT, for offers received within 20% of your asking price.

The benefits of option 1 are that you know what you are paying each month. The water can be tested for 3 months for just over Ł500, after which, if it isn't working for you, the contract can be cancelled. Regardless of how many leads and offers you get, you will always pay the same.

The benefits of option 2 are that if no leads are generated and no offers are made then the only cost you incur is the set up fee of Ł150. The contract can be cancelled at any time.

How long does it take to get my practice listed on the website?

If we haven't done a practice valuation for you or don't already act on your behalf for another service then we will have some compliance procedures to follow before we are able to officially market the practice. This involves getting suitable identification and a signed contract of terms in place. Once we have the go-ahead this can take as little as 2 days to finalise but that very much depends on how quickly you can send details back to us.

We allow a week to write and agree the advert and get it posted live on the website. If we have prepared the valuation report, we will draft the advert and send it to you for approval. If we haven't prepare the valuation report then we ask you to draft the advert ready for us to

How do you field phone calls to eliminate people who are not serious buyers?

It is sometimes tricky to always guarantee that the interested party is a genuine buyer as there are always chiropractors sniffing around for facts and figures on someone else's practice so they can compare it to their own.

However, we ask a few questions that we hope will at least tell us a little bit about them (sometimes during the conversation we can pick up on clues from things that are said that may indicate how genuine their enquiry is)

. We check they are registered with the GCC

. We ask if they have considered how they would finance the practice purchase, including if they have a deposit

. We ask how long they have been practicing as a chiropractor, as this could affect their ability to raise finance or manage a clinic themselves

It is not always possible to obtain answers to all, depending on if they enquire by email or telephone but we always do what we can to avoid sending details onto a suspect enquiry. Saying this, we don't want to alienate anyone who may be a potential to buy your chiropractic practice so sometimes we have to just assume they are serious and see what comes from the follow up.

Can you assist with selling practices that are outside the UK?

We can assist with marketing practices outside the UK but we can not guarantee the level of success we will have with some areas of the marketing.

We can still:

. advertise on our website, which does attract visitors from all over the world but primarily in the UK

. advertise in the UK trade magazines

. send the links to our mailing lists and database

. consider other places to advertise in the country in question

We will not be able to answer questions relating to general business operations in that country, including visas, entry exams and raising finance.

Can you recommend a solicitor to take care of the practice sale?

Yes, Robert Brightley of Brightley Commercial is the solicitor who works with finance 4 chiropractors and is a specialist in the transactions for chiropractors.

It is best to enquire at the start of the process to agree costs etc before your purchaser secures Robert as he can only act on behalf of either the buyer or seller.

What if I don't get any enquiries? Do I still have to pay for the service?

Our service is primarily concerned with lead generation. Clearly there are some costs involved with getting the marketing set up, which is why we have a set up fee.

We have however, specifically designed our pricing with 2 options to allow for chiropractors to have a choice between paying a set monthly fee or a fee per lead option.

If you opt for the first choice, paying a set fee, then the fee will be due for payment regardless of how many leads we generate for you. If you opt for the second choice, then it is only the set up fee that is structured as a fixed amount, the rest is payable purely when leads and offers are generated.

It is worth noting that the service is exactly the same, it is only the pricing that is different.

Practice Valuations

General

Is it worth getting a practice valuation?

That is up to you to decide. Is it worth it to you to get a practice valuation prepared?

What we can tell you is that pitching the price at the right level is very important. If it is pitched too high, then fewer people will enquire and if it is priced too low, you could be doing yourself out of some profits.

Secondly, the valuation report is a handy document to be able to provide potential buyers as it holds all the information about the practice in one, easy to read, report.

What is goodwill?

Goodwill is the value paid over and above the value of the separately identifiable net assets or put another way, the amount paid in recognition of the sustainable profits the clinic will generate in the future. It is a non tangible asset.

Should I market my practice before the practice valuation has been finished?

When marketing your practice it can take a week or two to get the

. Can a buyer get a valuation prepared?
. Is the valuation suitable for court purposes?
. Does the valuation involve tax advice on the best method of selling?

The benefits
. What are the benefits of getting a valuation done as a buyer?
. What benefits are there to getting a professional practice valuation?
. Are there pros and cons to selling my limited company rather than just the goodwill?

The method
. How is the value of a chiropractic practice calculated?
. How accurate is the valuation?
. What if I don't agree with the value once the valuation has been carried out?
. What method is used to value the goodwill in a chiropractic practice?
. If I want to sell my limited company, is the valuation process different?

The service
. Can we value practices that are based outside the UK?
. How long does it take to carry out a practice valuation?
. What information do I need to provide for the practice valuation?
. Who will carry out my practice valuation?
. What qualifications does the person valuing my practice have?
. How much does a practice valuation cost?
. If I am getting two clinics valued, is the cost the same?

Buying a practice

. What do I need to consider when buying a practice?
. If the seller hasn't had a valuation done, should I?
. Where can I raise finance from to purchase a practice?
. If I am a cash buyer, can I negotiate a discounted price?
. If I am not located in the UK, what do I need to consider?
. Will I need to prepare a business plan?
. Are most sellers open to negotiation with the price?
. If I have finance agreed, am I in a better position with negotiating on the price?
. What is the average timeframe for a transaction to go through?
. Can you recommend a solicitor to take care of the purchase of the practice?
. Is it better for me to buy a practice or set up from scratch?
. What if the chiropractic assistants (C.A's) are not planning on staying?

Setting up a new practice

. Is it better for me to buy a practice or set it up from scratch?
. How long should I plan from start to finish?
. What research do I need to carry out?
. Where do I start?
. How do I go about preparing a business plan?
. Where can I raise finance for the new business?
. What can I do for opening day?
. Should I appoint associates straight away?
. Where can I find a suitable chiropractic assistant (C.A)?
. Where can I recruit an associate from?
. Should I set up as a sole trader or limited company?
. Are there advantages of setting up in partnership?
. What contracts do I need to get in place for employees?
. How do I set up a payroll scheme?
. What marketing is recommended to get patients through the door?

Tax

Personal tax - dates, facts and figures
. How often do I need to file a tax return?
. What is the tax year end?
. When is my personal tax payment due?
. What is a payment on account?
. How long do I have to keep copies of my tax returns and workings for?
. Who is ultimately responsible if anything it entered incorrectly onto the return?

Limited company tax - dates, facts and figures

. How often do I need to file a company tax return?
. What is the tax year end for my company?
. When is my company tax payment due?
. What is the difference with personal and company tax?
. How long do I have to keep copies of the company's tax returns and workings for?
. Who is ultimately responsible if anything it entered incorrectly onto the return?

What can I claim tax relief on?

. What items can I claim tax relief for as a chiropractor?
. How can I claim tax relief on motor expenses?
. Can I introduce equipment that I purchased at college?
. Can I claim tax relief on clothing I wear to work?
. What subscriptions are allowable for tax relief?
. What if I am employed, is there anything I can claim for?
. I use my telephone for business and personal use, can I still claim something?
. Can I claim any of my home costs for work I do from home?

Personal tax - the service

. Can you assist with preparing my personal tax return?
. How long does it take to prepare a tax return?
. What information do I need to provide for you to prepare my tax return?
. Does the tax return need to be signed and returned?
. Can you give assistance with filing my own tax return online?
. How much does it cost to prepare a personal tax return?

Personal tax - General

. Do I have to declare income from rental properties?
. How should I record the information for my tax return?

Investigations

. What happens if I get investigated by the Inland Revenue?
. Is there any insurance I can take out to protect me against investigations by the Inland Revenue?

Accounts

. What are financial accounts?
. Why do I need financial accounts?
. Do I need financial accounts even as a sole trader?
. Who is Companies House?
. As a limited company, when do I have to file my accounts with Companies House?

Payroll

. How do I set up a payroll scheme as a new employer?
. How much does the monthly payroll service cost?
. What are the benefits of getting someone else to do the payroll?
. What does SSP stand for?
. What does SMP stand for?
. What does SPP stand for?

Bookkeeping

. What bookkeeping software do you recommend?
. Do you have any free bookkeeping software you can provide me with?
. Do you offer any training to get started on keeping my books and records?
. What filing system should I use for keeping the paperwork in order?
. How often should I carry out my bookkeeping?
. How often do I need to send my bookkeeping into you for checking?
. Do you offer a bookkeeping service?

MORE software

. How many hours training are included for free?
. Is general support throughout the year included?
. Do you have any webinars that can be attended for extra training?
. Do you carry out face to face training or only telephone?
. What information do I need to have available during the training sessions?
. What can I expect from the training sessions?
. What if I have a technical problem?
. Does this software have reports that can be viewed?
. What do other chiropractors think of the software?
. Can I see testimonials from other chiropractors on this software before I sign up?
. What happens if I leave as a client? Can I still use the MORE?

Referral schemes

. Do you offer an incentive scheme if I refer a friend who then becomes a client of yours?