Timing Your Exit to Maximise Your Sale Price

We recently completed a round of Boardroom Briefings where one of the sessions was on ‘how to maximise the sale price of your practice’.

We felt this was a useful topic because we see so many vendors that could have achieved a better price than they did if they had just done some lead up work. In reality, we want equity holders and practices to be sale ready all the time, rather than trying to time the market for the best outcome or head towards an ever changing exit date. Likewise, it’s imperative to appreciate that not all practices are worth the same, not all scenarios will provide the same value or price and the price received in other transactions doesn’t automatically apply to your firm.

However, one thing is for certain, the more attractive your practice is to the market, the better price you will receive and the more suitors you are likely to have wanting to purchase your practice. Few wish to buy the ugly duckling, and surprisingly many business/practice owners don’t have an accurate idea of where their firm sits on the scale of attractiveness. It doesn’t matter whether you want to sell now or in ten years’ time. Likewise, it doesn’t matter whether you are planning to sell internally or source an external purchaser. As a side bar, external transactions are commonly achieving better results at the moment. But, knowing how your firm actually compares, where it stands and where it could improve, will all lead to a better outcome. A better outcome has two elements – performance improvement and risk mitigation or management.

The starting point really has two facets:

1. Knowing what you have and want in terms of your personal, business and financial needs;

2. Know what your practice is currently worth

From these two approaches, we are then able to identity the difference or gap between what we currently have and what we need. Naturally, this enables us to determine whether we have the time, energy and resources to improve what we currently have to meet those needs, or whether we adjust some of these needs to enable us to cut and go.

Once we are able to identify whether we want to stay and grow or cut and go, it’s then possible to put in place the action plan which leads us on a path to improving, maximising and protecting our practice value or sale price. As highlighted above, one of the first steps in this process is knowing what your practice is worth.

Do you know the current value of your practice or equity? Have you revisited its value recently?

If not, we welcome the opportunity to discuss this with you further. Call Michelle Knights on (02) 9233 4333 for a completely confidential and obligation free discussion.

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