Can I work in the practice I'm considering buying before I commit?
Why can’t I just work in a practice I want to buy for a few months before I sign on the dotted line?
As a practice sale broker, I get asked by buyers to work in a practice for a few months before they commit to buy. I understand, it would make a buyer feel better and more confident. But it almost never happens, not with any “good practices,” because it poses serious risks to sellers.
I mean, would you let someone live in your house – with you and your family – a few months before the sale closes, and cross your fingers and pray that the sale actually closes? What if the buyer says they just want to check out the view, make sure all the applicances really work, and see how the schools really are going to work out with their kids?
Oh – you say – that is totally different! But is it really? Nope, it isn’t.
1. Your buyer is going to take a lot of your profit. You’ve got to pay them a regular associate wage even if you don’t really need an associate. So your regular take home of $20,000/month may go down to $10,000. And if you do need an associate, it might be even more dangerous – they may take all your best staff and secrets when they leave!
2. A buyer will get to know your staff and possibly your referrals. Your staff might like them better than you, or the buyer might pay them more – and they could leave you in the rear view mirror if the buyer moves on.
3. The buyer will probably have full access to your computer system, your referral lists, your fees, your absolutely everything.
If a buyer is not ready to buy, and commit, then it just isn’t time yet. As a broker, I know there are buyers who are clearly ready and buyers who are not. But wishy-washy buyers who can’t decide and don’t really know what they want, are generally a waste of time – and money – for sellers.