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The Broker
GW - NW - "I have been made what I consider a very good offer for my practice, the full offer is conditional on the practice performing to a certain level over the next 3 years. Do you think I should accept this?"
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A: I personally do not like delayed payments on any offer. If you broker has given an extensive sales information memorandum the purchaser should accept this and make their offer based on the full value of the practice. If the delayed payment relates purely to say you staying for a fixed period of time say 1-2 years, then that may be OK. However, if it is related to performance that is a different matter. Any performance enhanced offer has to be based upon a fair comparison of say the previous years financials and remember you no longer own the practice and therefore may have limited input on how the practice performs. I have seen growth bonuses offered of 10% increase in turnover, based upon double what the purchasers group has performed themselves.