November 10, 2019 at 9:31 am #3558462Jonathan GoldsmithParticipant
I’m a licensed guy and I have an opportunity to purchase a established firm. It is a small firm with a long history dating back to the mid-seventies. The principle is approaching retirement age and would like to see it transition and move into the future. Currently there are only two employees other than the principle, a LAIT and a business/office/admin manager. Professional business, unlike other industries, have few assets and it is difficult to figure out pricing and deal structure. Has anyone ever gone through taking over an existing practice? If so, how did you go about it? How was valuation established? Any pitfalls I should be cautious about? Really would love some help on this one. Thanks in advance for any advice. Also if you are uncomfortable posting information on this board you can email me directly at JG.firstname.lastname@example.orgNovember 12, 2019 at 5:51 pm #3558463Leslie B WagleParticipant
I’d look carefully at what you’d actually GET. For example, the 2 employees may not stay or may not work that well with you. If you kept the current business name, but the person with that name departs, won’t you be explaining the switchover to a lot of former clients? And if you rename it, won’t you be starting new just as if you opened a fresh practice?
I can grasp the value of buing a dental practice where the equipment is in place, and there are deep records of people’ history on file. But without some ongoing projects that you could handle and take over that would support your survival for awhile, it’s harder to see the advantage of jumping into a stream of small ever-changing unpredictable projects that arrive from incoming unknown inquiries, etc. You’d be pulling the extra stress of the payments to the retiring person from the income stream; and the location of an office isn’t that relevant to a design firm since we don’t get walk-ins. Work usually arrives by active marketing or a few referrals, and the referrals would hark back to that retiree and his/her reputation. Odds might improve if you had been an associate for awhile who knew and liked how this individual worked, had deep familiarity with the interal operation of the practice, and could believe you would replicate the former success.
I guess this is almost a personality question, but I think I would hunt down my own contacts and build my own profile and reputation instead. Is there any alternative option such as pay this person for some guidance and mentoring, along with targeted introductions?
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