Red Flags for Practice Buyers
Consultant's Corner – Q&A with the Industry Experts
Question: What should buyers be aware of?
"Be cautious when you can't get straight answers or some things are too obscure to figure out. Though sometimes a practice can be complex and just difficult to understand, other times there are landmines lurking. You have to rely on professionals to guide you. Do your due diligence and hire a CPA. The due diligence period is your time to inspect and verify everything that's been represented to you."
Question: How do you avoid a "bad deal"?
"Like I mentioned before, get some assistance so you don't encounter a landmine. Beyond that, try to view things rationally. The worst kind of deal is one you get jammed into, knowing that you're overextended but thinking that you've got the magic sauce to turn the practice around. Buy the opportunity for what it is, at it's fair market value, under the expectation that it will be sustainable on its own two legs. Anything you do beyond that can just enhance value. I also think it's critical for a buyer to ask themselves why to own a practice in the first place."