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The Broker
Q15 "How can I sell a Practice that the corporates are not interested in purchasing." FP. Scotland

A: As I have stated before 95% of practices with a turnover of over £500k will be sold to a corporate entity. Occasionally they will purchase smaller units if the location fits their plans, but in the majority of cases these smaller practices will have to be sold to non-corporate buyers. Often many are technically non-profit making. A sole trader with a profit of £20k is often in reality making a loss of £40k after a salary and a property rental is charged out, so when selling these practices a different approach has to be made.
There are many reasons why your practice might be falling into that category, from rapidly changing markets to aggressive competition, but in every case a low turnover per vet employed is usually the problem. Wherever possible, selling your practice when it is technically losing money should be a last resort, and every attempt should be made to increase the profit level before putting it up for sale.

When you sell as a sole trader you will be selling the assets, the goodwill, equipment and property. Any liabilities will be your responsibility, which effectively means you will have to clear off any debts

Why would a buyer look to purchase a low profit/turnover practice?

1.Incorporating your practice into their own.

2.Acquiring the assets such as your client base, and practice property.

3.Introducing capital and restructuring the practice to make it profitable.

4.Buying the practice to offset tax.

So, there are reasons why someone might be interested, and marketing these has to be undertaken in a very different manner.