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Buying a business is one of the common thoughts that people will usually think about. This is because buying a business is an easy way of acquiring a business of your own. It is a piece of cake to push through with success in mind in this kind of venture compared to when you start your Long Island audiology business from scratch. If you have money, you may go ahead with your purchase.
However, you cannot say that it is a piece of cake in the option of buying your own business. If you need to exert double the effort in starting up a business from scratch, this option requires you to be precise and prepared for when you are going through the buying process. The buying process is quite intimidating, after all.
If you are actually buying, pay attention to the things that you have to inspect before you say the final choice. Be sure to determine the real value of what you are buying. Do not just listen to the words of the seller, you got to poke around first before you finalize your choice. There are important factors that will affect your decision, after all.
It is a good thing that now you can check the business for any warning signs. If the said business shows these warning signs, then it is only imperative for you to find another alternative to your purchase or another business to buy. Here are those warning signs that will help you make your purchase totally worth it.
First, you got to make certain that the financial statements offered to you by the seller of the business are actually consistent. If the balance sheets, income statements, or tax returns do not align with each other, then you better look for another alternative. The said financial documents must cover a three-year period leading to this sale.
All of the fluctuations that you can see in the sales should be explained. Even though the fluctuations happen yearly because of changes in the economy or because of third-party payers, they should still be explainable. If there are lots of fluctuations in the sales that can be considered abnormal, then better back out of the said negotiations.
Hypergrowth is definitely not a good thing. While you can consider declining sales as a big red flag for your sales, you should also worry when there is actually a rapid spike in the sales. The reasons for the spike might mean that the future growth you can expect out of the said company does not come organically.
If there is reliance in third parties, you can say that it is as worrisome as any other warning signs. In the hearing aid industry, you have to stay away from those companies on sale that have high concentration of patients coming from third-party sources. Understand what reimbursement structure is so that you can determine this.
The KPI should be checked too. The KPI means key performance indicator. If the key performance is actually poor, then you better look for other purchase. When it comes to the key performance indicator, the long list include binaural rate, cost of goods sold as percentage of sales, average selling price, and hearing aid return rate.
However, you cannot say that it is a piece of cake in the option of buying your own business. If you need to exert double the effort in starting up a business from scratch, this option requires you to be precise and prepared for when you are going through the buying process. The buying process is quite intimidating, after all.
If you are actually buying, pay attention to the things that you have to inspect before you say the final choice. Be sure to determine the real value of what you are buying. Do not just listen to the words of the seller, you got to poke around first before you finalize your choice. There are important factors that will affect your decision, after all.
It is a good thing that now you can check the business for any warning signs. If the said business shows these warning signs, then it is only imperative for you to find another alternative to your purchase or another business to buy. Here are those warning signs that will help you make your purchase totally worth it.
First, you got to make certain that the financial statements offered to you by the seller of the business are actually consistent. If the balance sheets, income statements, or tax returns do not align with each other, then you better look for another alternative. The said financial documents must cover a three-year period leading to this sale.
All of the fluctuations that you can see in the sales should be explained. Even though the fluctuations happen yearly because of changes in the economy or because of third-party payers, they should still be explainable. If there are lots of fluctuations in the sales that can be considered abnormal, then better back out of the said negotiations.
Hypergrowth is definitely not a good thing. While you can consider declining sales as a big red flag for your sales, you should also worry when there is actually a rapid spike in the sales. The reasons for the spike might mean that the future growth you can expect out of the said company does not come organically.
If there is reliance in third parties, you can say that it is as worrisome as any other warning signs. In the hearing aid industry, you have to stay away from those companies on sale that have high concentration of patients coming from third-party sources. Understand what reimbursement structure is so that you can determine this.
The KPI should be checked too. The KPI means key performance indicator. If the key performance is actually poor, then you better look for other purchase. When it comes to the key performance indicator, the long list include binaural rate, cost of goods sold as percentage of sales, average selling price, and hearing aid return rate.
About the Author:
You can visit www.harmonyhearing-speechcenter.com for more helpful information about Warning Signs To Know Of When Purchasing Your Audiology Practice.
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