Simon Palmer has a Bachelors of Arts, a Bachelor of Economics and is a Licensed Real Estate Agent and Business Broker. He has extensive experience working in healthcare recruitment and practice sales, and is founder of Australia’s largest dental and vet brokerage- Practice Sale Search. His company sells more than 60 practices a year, and runs workshops and seminars on exit planning and practice sales throughout Australia.
VetPrac would like to welcome Simon Palmer to the education team…Read on to learn more about him!
Simon, you are the Founder and Managing Director of Practice Sale Search. Tell us how you got into this line of work?
I come from a dental/medical family and, between family members and their clinical friends, I saw many clinicians with great practices stumble when it came time to sell their practice.
They were either trying to do it themselves at the end of a long day, or using a non-industry-specific agent who didn’t understand their business. The process was always frustrating and stressful and the results were almost always compromised.
I had been working in dental recruitment for some time and understood the business intimately. We had a great database, so I decided to fill the gap in the marketplace, and we quickly became busy.
A few years ago, I met Tony Thelander, and we saw a similar need in the vet marketplace. Between the two of us, Tony had an intimate knowledge of vet business and, by that stage, I knew practice sales inside out, so we decided to join forces in Vet brokerage.
What are the top 3 things to consider when selling a practice?
1. There is an old saying that if you have two hours to cut down a tree, spend the first hour sharpening your axe. A similar sentiment can be said of practice sales. To make sure you have a clear run at the finish line, you need to spend time in preparation before you even start to ensure that you aren’t scrambling around when you have a buyer ready to go. This means gathering documentation like financials, major equipment inventory, leases on premises, council permits, associateship agreements, etc. You also need to have clear success criteria and know the post-sale commitment you are willing to give.
2. There is a reason why world records are broken in a race environment, rather than a man alone on a track. It often takes competition biting at our heels to bring the best results. The same is true in practice sales. Dealing with a single buyer alone is rarely going to achieve the best results. You need competitive tension and fear of missing out to bring the best offers forward.
3. There is a tendency among many people to engage a friend or relative to represent them as a lawyer in their practice sale, regardless of their suitability or experience with the task. Commercial law is different from family law or conveyancing, and the stakes are too high for a vendor to risk getting it wrong with a friend that is learning on the job. I would strongly encourage anyone selling a business to engage a commercial lawyer experienced in your type of transactions
Many business owners will attempt to sell their own business. Tell us the benefit of seeking professional advice.
There are several reasons why a vet practice owner should engage a professional to help them sell their practice:
1. A professional broker has access to mny buyers, which an individual vendor will not.
2. Most vets are time poor. A sale involves many, many hours of the vendor’s time in gathering and collating documentation, negotiation, getting legals done, etc. When this is done by a vendor, between clients, or at the end of the day, it is often tainted by fatigue or lack of time.
2. I think that most people would acknowledge that a professional in any field will almost always achieve better results than a first-timer. A professional knows the variables, the pressure points, the common pitfalls and how to achieve optimal results.
Most home owners recognise the value of engaging a real estate agent to sell their house, rather than putting a home-made sign on their lawn and trying to sell it themselves as a D.I.Y project. However, when they are selling their business, an asset that is often the result of a lifetime of hard work, people often have a false sense of security handling it themselves. The results of the sale should make a big difference to the vendor’s quality of life post-sale. When the stakes are that high, it might be time to call in a professional.
In today’s market, do you find that younger or older people are investing in owning a practice?
There isn’t a dominant profile among buyers. Purchasers who approach us are young and old, recent graduates and experienced, first-time owners and old hands at ownership, owner operators and corporates. These different profiles are often competing for the same practice.
In your opinion, what is the most common reason for owners wanting to sell their practice?
It’s hard to pinpoint one main reason that people sell. There are, however, a few common reasons I have come across. These include retirement, selling to focus on other interests or business opportunities, breakdown of a partnership, and divorce. Sometimes people find that being a business owner comes with a lot of stress and paperwork and they just want to work as a clinician and not have the burdens of ownership. Unfortunately, we also become involved with distressed sales (where the owner is selling due to illness) from time to time.
What do you like to do to wind down?
I have two young kids, so I spend a lot of time hanging out with them, which, while tiring, is a great way to unwind. I also run, enjoy reading, and have recently gotten into gardening.
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