Here’s a bit of advice that will serve you well If you are considering a sale of your healthcare business: You have the right to remain silent. Anything you say to a potential buyer can and WILL be used against you when it comes to making a deal.
More often than not, when practice owners meet with potential buyers, partners, or investors, they end up divulging information that, at best, weakens their position at the negotiating table; and at worst, turns off prospective investors completely. Although well-intentioned, sellers can sabotage their chances at getting top dollar for their practices by inappropriately disclosing the wrong information in the wrong way at the wrong time.
While it is understandable to want to tell a potential buyer all the great things you think they should know about your business, it’s best to leave the conversations relating to the sale of your practice to the professionals representing you in the transaction. They understand how to communicate the story of your practice; how (and when) to disclose financial and other information to maintain confidentiality and minimize competitive exposure, and how to present your value proposition in a way that makes financial sense and positions your business as a viable, attractive acquisition target.
Keep in mind that the buyer of your practice has likely been through the acquisition process many times before, whereas most sellers have never been through a sale process. And while a casual conversation about your business may seem harmless, this discussion can have serious financial and strategic implications for your sale. For example, discussing reported revenue or earnings before an advisor has validated these numbers and adjusted them for non-recurring items can prematurely set pricing expectations that are derived from these numbers. For the same reasons clients have their attorneys control the narrative in a courtroom, you want to leave discussions about the sale of your practice to the experts advising you. And while exercising your right to remain silent may be difficult, it’s just a smart move.
As a healthcare valuation and transaction advisory expert with more than 20 years of experience, I have worked with countless providers to position them for success when it comes to buying and selling healthcare practices. My team and I understand how to prepare your business for a transaction and how to craft authentic and persuasive messaging to present your business in the best possible light.
Bottom line: It’s best to let the experts do what they do best. Would you like more information on positioning your practice for a potential acquisition? Feel free to contact me here.