02 Jun How much will it cost me to work with a PARAGON consultant?
It’s interesting to note how many doctors worry more about the fee they will pay for professional assistance in selling their practice rather than the net amount they will ultimately realize from the sale. We have known doctors who ended up accepting 50% to 60% less than the actual value of their practice, and even others who walked away from their practice with no sale, just to avoid paying a consultant or broker fee for selling the practice for them! We guess there must be some form of logic at work here, but frankly, we can’t figure out what it is!
Instead of being concerned about the fee, the real question should be, of course, how much money does the average doctor lose by trying to sell his or her practice without professional assistance? The average doctor does not have the knowledge nor the tools needed to realize the full value from the sale of his practice. As a result, a seller invariably sells the practice for much less than its real value, thereby actually costing the doctor much more than it would if he or she used professional assistance.
Why will a dentist’s cost be far less by using the services of PARAGON for the sale of his or her practice?
APPRAISALS: PARAGON prepares a very sophisticated ten-year income and expenses proforma and accompanying financial analysis that clearly shows the true income potential of your practice. This justifies to the purchaser why he or she is paying the fair market value for your practice. Without these tools, a purchaser (through his accountant) will be inclined to value your practice based on equipment and other tangible assets, and thus will want to pay much less for your practice.
ADJUSTED INCOME STATEMENTS: If your accountant has done a good job minimizing your taxes, your tax returns are not showing much profit. A purchaser will want to review those tax returns. Think about trying to explain those tax returns to a potential purchaser.PARAGON has developed methods for categorizing income and expense from the information on your tax returns that explain the “true profitability” of your practice. We adjust out the non-practice related (“elective”) expenses and develop a true financial picture of your practice that is easy to explain and understand.
PURCHASER EDUCATION AND PREPARATION: Practices are not bought… they are sold! Purchasers have to be fully educated on the benefits of a practice opportunity. PARAGON knows how to do this effectively. With PARAGON, you will not even be bothered to meet with a purchaser until that purchaser has been fully qualified for your
practice. They have to fully understand that a practice is an investment opportunity, not merely a practice acquisition. In fact, our purchasers understand that price is not even close to the primary issue in a practice acquisition. Consequently, our well-educated purchasers are prepared to pay the fair market value for your practice.
DUAL REPRESENTATION: Sellers and purchasers are natural adversaries. You can try to convince the purchaser’s advisors that your practice is worth your price and terms, but they are not going to listen. The purchaser’s advisors are going to tell the purchaser that the price is too high and/or the terms are not acceptable regardless of what price and terms you have established for your practice. Purchasers are told to negotiate. But, it is impossible to negotiate fairness. You can only negotiate a compromise and the seller always comes out on the short end. Compromising to complete a transaction is not worth the money you are trying to save on a fee. Our policy of dual representation neutralizes adversarial representation and allows the transaction to be finalized without any compromise and without any negotiations. The bottom line is that you will receive the exact same price for your practice that we told you your practice was worth!
SELLING PRICE: Except in extremely rare situations, sellers listed with PARAGON sell their practices for the listed selling price (which is also the fair market value of the practice).
SUCCESS RATIO: The typical practice broker closes twenty-two percent of their listings, and usually at a price that is substantially below the listed price. A doctor attempting to sell his or her practice on their own (whereby both parties are using unilateral representation) stands less than a ten-percent chance of completing the transaction! PARAGON closes an average of ninety-six percent of our practice listings. And, ninety-nine percent of all practices sold by PARAGON are sold for their full appraised value.
EXPERIENCE: PARAGON consultants have helped thousands of dentists realize their transition goals. A doctor selling his own practice will have to rely on attorneys and accountants, who probably have little to no experience in selling healthcare practices (most have never sold a dental practice), to provide them with the expertise needed to close the transaction. Combine unilateral advice with an adversarial environment and inexperience, and you have a sure-fire recipe for a very costly, failed transaction. Nothing replaces experience and PARAGON has extensive, proven experience.
PARAGON has the knowledge and expertise, as well as, the tools required to get you the maximum value for your practice. If you try to sell your practice yourself, it will likely cost you thousands of dollars in unnecessary legal and accounting fees in return for an uncompleted transaction. You will also experience months of frustration dealing with unqualified “tire kickers” who want to negotiate every facet of the transaction. You are virtually assured of ending up with far less money and much more aggravation trying to do this yourself. Call PARAGON today, you will be glad you did.