CATEGORY 94 AUSTRALASIAN DENTIST When practice owners decide it’s time to sell, their first thought is usually, “How do I find the right buyer?” It’s an understandable focus. After all, without a buyer there isn’t a sale. However, after advising on hundreds of professional practice transactions, we’ve learned that finding the buyer is often the easy part. The real challenge begins after an offer has been accepted. This is when buyers, financiers, accountants and solicitors begin asking questions – lots of them! Financial information, contracts, leases, employment agreements, compliance, equipment maintenance and licensing documents, production reports, patient statistics and dozens of other pieces of information suddenly become critical. Unfortunately, many transactions don’t fail because the buyer changes their mind. They fail because the process becomes slow, frustrating and unnecessarily complicated. Weeks become months, legal and accounting costs escalate, both parties experience deal fatigue, and what started as an exciting opportunity slowly loses momentum. The good news is that almost all of this can be avoided. Becoming transaction ready The most successful practice sales have one thing in common – they are prepared well before they go to market. Being Transaction Ready means having your financial, legal and operational information organised before the first buyer walks through the door. Rather than scrambling to locate documents after an offer has been accepted, everything is already available, professionally presented and ready for review. This preparation doesn’t simply make life easier. It creates confidence. Financiers can assess finance applications more quickly, accountants can better understand the performance of the practice, solicitors spend less time requesting information, and buyers gain confidence that they’re purchasing a well-managed business. It also demonstrates something that’s impossible to quantify on a balance sheet – it tells a buyer that the practice has been professionally operated. The data room One of the most effective ways to achieve this is through a professionally organised Data Room. A Data Room is a secure, cloud-based repository that contains all the information a prospective purchaser and their advisors are likely to request during due diligence. Instead of searching through filing cabinets, emails and computer folders each time a question arises, every important document is logically organised, easy to locate and available within minutes. A comprehensive Data Room typically includes financial statements, tax returns, management reports, production reports, property information, leases, licences, equipment registers, supplier agreements, employment documentation, marketing assets, operational manuals, compliance records and much more. It also provides a secure environment where information can be shared with authorised parties while maintaining confidentiality and complete control over who has access. Perhaps the greatest benefit in utilising a Data Room is speed. Buyers receive the information they need promptly; advisors spend less time chasing documents, due diligence becomes more efficient, and settlement can often be achieved much sooner. A well-organised Data Room also leaves a lasting impression that the practice has been professionally managed – something every serious buyer values. Preparation creates better outcomes Accepting an offer isn’t the finish line – settlement is. We’ve seen transactions that should have been completed in eight weeks, stretch into four or five months simply because information wasn’t readily available. Every missing document creates another email. Every unanswered question creates another delay. Every delay increases professional costs and creates uncertainty. Preparing your practice before it reaches the market removes much of this unnecessary friction and allows everyone involved to focus on completing the transaction rather than searching for paperwork. Whether you’re planning to sell next year or five years from now, becoming Transaction Ready is one of the smartest investments you can make. It gives you time to address any issues before buyers discover them, increases buyer confidence and positions your practice for a smoother, more successful sale. After all, selling your practice is likely to be one of the most significant financial transactions of your career. It deserves the same level of preparation that you would expect from any other major investment. u COLUMNISTS Is your practice really ready to sell? Joanna Oakey Carl Burroughs By Carl Burroughs & Joanna Oakey Carl Burroughs is the founder of Professional Practice Advisory and Professional Practice Sales and has advised on the sale of hundreds of professional practices throughout Australia. If you would like confidential advice about preparing your dental or specialist practice for sale, Carl can be contacted at carl@practicesales.com.au or on 0416 190 000. Joanna Oakey is the Managing Partner of Aspect Legal and author of the best-selling book Buy – Grow – Exit. If you would like a complimentary copy of Joanna’s Transaction Ready Checklist, contact Joanna at joanna.oakey@aspectlegal.com.au or call 02 8006 0769.
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