Listing ID: 83067
This 33 year, very well-established Internal Medicine Practice, typically experiences 2400 patient visits per year. Additionally, this Practice also serves Private Nursing Home patients and the State of MA. The Owner MD is retiring but will stay on through the transition. The Seller is offering flexible purchase terms: $200,000 up front and $100,000 earnout over 3 years.
- Asking Price: $300,000
- Cash Flow: $301,813
- Gross Revenue: $588,899
- EBITDA: N/A
- FF&E: N/A
- Inventory: N/A
- Inventory Included: N/A
- Established: N/A
Why is the Current Owner Selling The Business?
There are all sorts of reasons why people decide to sell businesses. Nevertheless, the true reason and the one they tell you may be 2 completely different things. For instance, they might claim "I have too many various responsibilities" or "I am retiring". For lots of sellers, these factors stand. But, for some, these may simply be reasons to try to hide the reality of changing demographics, increased competitors, recent decrease in revenues, or a range of various other factors. This is why it is extremely important that you not count completely on a seller's word, but instead, utilize the vendor's response combined with your general due diligence. This will paint a more reasonable picture of the business's present scenario.
Existing Debts and Future Obligations
If the existing business is in debt, which lots of companies are, then you will need to consider this when valuating/preparing your offer. Lots of businesses finance loans in order to cover points such as inventory, payroll, accounts payable, and so on. Bear in mind that occasionally this can imply that earnings margins are too small. Numerous companies fall into a revolving door of taking on debt as a way to pay back various other loans. Along with debts, there may also be future commitments to think about. There may be an outstanding lease on tools or the building where the business resides. The business may have existing contracts with vendors that need to be satisfied or might result in fines if terminated early.
Understanding the Customer Base, Competition and Area Demographics
How do companies in the area attract new customers? Many times, operating businesses have repeat customers, which create the core of their daily earnings. Certain variables such as new competition growing up around the location, roadway building and construction, and personnel turn over can influence repeat customers and negatively influence future earnings. One important thing to think about is the area of the business. Is it in a very trafficked shopping mall, or is it concealed from the main road? Clearly, the more people that see the business often, the better the opportunity to develop a returning customer base. A final idea is the basic location demographics. Is the business placed in a largely populated city, or is it located on the edge of town? Just how might the neighborhood mean household income influence future revenue potential?