Too often anxious or excited buyers overpay for an acquisition. While missing out on a deal can be terrible, overpaying for a deal can be much, much worse. This becomes even more important when there are other potential buyers. Deal frenzy can run up the purchase price. Don’t lose sight of proper business fundaments and make sure you stick to a logical plan and price. To help guide potential buyers, use these 10 critical guidelines to avoid overpaying for an acquisition:

1. Determine a Maximum Purchase Price – Be Prepared to Walk Away

The best deal can be the one you pass on. Far too many acquisitions fail because the buyer overpaid.

2. Understand the Seller’s Motivations

You must understand what matters to the seller.

3. Do Your Homework – Proper Due Diligence is Critical

Make sure you learn everything you can before you make a deal.

4. Sweat the Small Stuff – Do Not Ignore Red Flags

Do not ignore red flags. Make sure you look under every rock possible to understand where issues may lie.

5. Integration Expenses and Timeline

Make sure your management team and advisors are prepared to work through any business integration. It takes considerable time and energy to make sure you protect the value acquired in a deal.

6. Pay for the Value that Exists – Benefit from the Value You Bring

While there are exceptions, a buyer generally should not pay for synergies brought after the deal closes.

7. Use Experts (Both Internal and External) to Assess Business

If you are ever going to pay for expert advice, now is the time. Use the right accountant, lawyer and advisor to ensure the deal is executed properly.

8. Get to Exclusivity

Get exclusivity with a seller whenever possible to shut out other buyers for a period and have a seller focused on your deal.

9. Multiples are Tricky

Focusing solely on multiples can lead to bad decisions. You need to focus on the numbers that are driving the financials first. Then make sure you work with an advisor who can guide you towards the right price and multiple.

10. Trust Your Instincts

Do not force the wrong deal to acquire a business. Trust your instincts and be prepared to walk away if the deal doesn’t feel right.

If you want to avoid overpaying for an acquisition, you should read my full article on this topic at 10 Proven Ways to Avoid Overpaying for an Acquisition

Michael Roub

P.S. If you would like to learn more about how I can help your business, schedule a call here. Schedule Call

P.S.S. Videos on several topics are also available on the Inflection 360 YouTube channel.

The post Avoid Overpaying for an Acquisition appeared first on Michael Roub.

If you are a healthcare practice owner, it is important to be prepared to sell your practice to ensure you get the highest price possible. While all business owners need to take appropriate steps to sell their business, practice owners must consider additional factors. As a corporate executive focused on practice acquisitions, I have learned that will benefit any practice owner. 5 lessons that are most critical are:

1. Understand Your Payor Mix

Buyers look for opportunities and challenges. Untapped payors in your practice could represent tremendous opportunities. However, this may not be clear to a potential buyer, so it helps if you can provide this information upfront.

2. Review Your Practice Metrics

It is important to understand where volume has increased or decreased. Some providers within a practice are busier than others. These and other metrics will need to be understood by both you as the seller and any potential buyer.

3. Providers are Assets – Stay After Sale

If you currently see patients, a buyer risks losing clients after the sale. If you are willing to work out a meaningful transition plan it can result in more value to both the buyer and you as the seller.

4. Discuss Legal and Compliance Considerations

Be prepared to discuss any legal or compliance issues with a potential buyer. Having these issues under control before a sale is essential.

5. Have Credentialing Files Up to Date

A buyer will need to work with insurance payors to update contracts or obtain new ones after a sale. They will need current credentialing files for all providers.

If you want to sell your practice for more money, you should read my full blog on this topic at The 5 Most Important Lessons I Learned Acquiring Medical and Dental Practices

Michael Roub

P.S. If you would like to learn more about how I can help your business, schedule a call here. Schedule Call

P.S.S. Please check out my video on YouTube to learn more on the topic. 5 Lessons from Acquiring Medical and Dental Practices

The post How Medical and Dental Practices Can Sell for More Money – 5 Lessons Learned appeared first on Michael Roub.