Warning Signs To Know Of When Purchasing Your Audiology Practice

By Rosella Campbell


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.

Since you are inspecting the said business, it is highly recommended for you to watch out for a few warning signs for it. There are definitely those signs that will make you think twice about making a positive decision regarding the purchase of a certain company. Here are the warning signs you have to avoid.

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.

It is fine if there are fluctuations with the sales but all of them should be explained. It is only understandable to have the fluctuations to happen yearly. After, various changes always occur in the economy. Other factors are present too. If the said fluctuations are not abnormal, then you can go ahead with the negotiations.

If there is a hyper-growth in the business sales, you have to scrutinize it quite carefully. Most people panic when there is a declining sale and become overjoyed when there is a spike in the sales. However, it is actually worrisome too to find a random rapid spike in the business sales. You have to consider this as a red flag too.

When the company always rely on a third party to generate sales, then back out of your negotiations. If the said company heavily relies on a third party just to get profit, then you can just wonder what would happen if that third party crashes. The sales should not have a high concentration of clients from third-party sources.

Poor key performance indicators or KPIs is certainly a red flag. Every company has a key performance indicator. You can include in the list the binaural rate, hearing aid return rate, cost of goods sold as a percentage of sales, and average selling price. These should not show any poor performance if you do not want to lose out in the deal.




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