Tag: ROI corporation

Looking Towards a Brighter 2022

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Most of us can certainly say that 2021 was an improvement on 2020. Many of us came to the end of 2021 feeling very hopeful and encouraged as we felt the worst was behind us.

Then the Omicron variant entered the picture and quickly changed (and perhaps even dashed) some of these hopes. None of us could have predicted that such a highly transmissible variant would come along. I am hopeful, though, that the end is finally in sight. It might be foolish to make another prediction, but I think we must believe we are in the final stages of this pandemic.

Why am I so hopeful?
We all know that healthcare offices can adapt despite all the measures and protocols required to keep staff and patients safe. We know a lot more about SARS-CoV-2 today than we did 18 months and three waves ago. Whether you choose to be vaccinated or not, the fact is that we at least have more protection against severe illness due to COVID-19.

It is true that during something like a pandemic, practice owners must be more vigilant at business planning. Ideally, this should be an exercise undertaken at the start of every new year but as we move forward there are always the same questions that must be asked in order to achieve success. Perhaps, as you read through them, you may see these are the same questions that should have been asked prior to the pandemic.

How well do you know your patients?
Any growth that one wishes to attain in practice, must begin with this. The COVID-19 crisis has reinforced what we already know: we must communicate in very clear and precise terms. In other words, speak to your patients (through social media, in person etc.) and share information in language that means something to them. The pandemic has taught us that any messages we share must be relevant. Personal/human connections were even more important in the last 18 months when social distancing became a way of life.

Are you retaining and increasing referrals by ensuring the last best experience your patient had?
There is no doubt that all our expectations were already on the rise before COVID-19. But when the coronavirus hit, digital transformation accelerated overnight. Savvy owners focused on improving their social media presence to communicate and educate patients as well as potential patients. In-person appointments became very different due to PPE protocols and social distancing, thus making personal experiences even more challenging. Again, the smart practice owner ensured that patients felt appreciated and valued.

Do people feel valued in your office?
COVID-19 has placed a new emphasis on relationships. Staffing during the pandemic has proven to be a massive challenge and point of stress for owners. Successful owners have worked very hard to capitalize on the strength of their bonds prior to March 2020. Trust and integrity are fundamental to driving practice success. Trust will be built by and rewarded to those that listen to the needs of staff (and patients) and then craft solutions to meet those needs.

How flexible have you become? Like it or not, COVID-19 has created an irreversible trend for owners to be nimble and adapt quickly. Hopefully, this crisis has helped to create a mindset of responsiveness that is likely to be permanent. Never take things for granted and run-on auto pilot. Always continue to observe and listen. Flexibility enables one to make faster decisions.

Have leadership skills improved?
COVID-19 has created a leadership culture of collaboration combined with the urgent need for resilience. A good leader is pro-active. There is no doubt that news of the 4th wave and of newer variants of concern on the horizon is upsetting. But if we look at pandemics of the past, subsequent waves have been part of their life cycles as well.

The purpose of these questions is merely to illustrate the importance of developing and implementing strategies that are essential to maintain practice value and to drive growth in a post-Covid-19 world. We all know that we cannot continue to do things the way we always have.

No doubt we have had to become accustomed to adjusting and changing. However, my hope is that even in a pandemic we have comfort in knowing that the answers to these questions should have been a priority prior to the pandemic. Despite what is currently happening, one can be successful if they choose to be. At least in 2022, a fresh start enables owners to prioritize the critical things that influence success.

It is a fact that the pandemic will create huge lasting changes that will take years to fully understand, which can feel scary. Yuval Noah Harari, once wrote that, “people are usually afraid of change because they fear the unknown. But the single greatest constant of history is that everything changes.”

The world has adapted to big disruptions before, and we will do it again.

Jackie Joachim, COO ROI Corp

JACKIE JOACHIM

Jackie has 30 years of experience in the industry as a former banker and now the Chief Operating Officer of ROI Corporation. Please contact her at Jackie.joachim@roicorp.com or 1-844-764-2020.

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The Best Time to Sell

Buying-Selling A Practice, Practice, Resources

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After the last 18 months we’ve experience, people are always asking,”Is it time to should sell my practice”. Today most owners want to know if one should sell during a pandemic.

Pandemic Effect on Practice Valuations
The easiest, and yet ironically most complex, answer is simple: sell when you are really ready to let go of ownership as long as you can afford to.

There are many factors that determine the best timing for selling a practice — the financial position of the owner, valuation of the office, potential for further growth, past performance and history, as well as the current market.

Healthcare has proven over the last 15 years to be both recession and now pandemic resilient. Practice values have not gone down and in fact, during the pandemic, values have increased.

The best place to start is to ask 2 simple questions: can you afford to sell and are you ready to walk away without looking back?

The financial question is easier because it is all about the math. Has financial security been achieved? If yes, then by all means, pass go and collect.

The second question, is truly the toughest. An owner might be very attached to their office and maybe even more than they think.

After all, many owners feel they have invested a significant portion of their life to its success and handing their “baby” over may not be easy.

Do the Math
Most owners want to sell when they know they can maximize the price. However, owners should also consider what they are giving up in order to delay the sale for the ultimate price.

Doing a cost-benefit analysis is a worthy exercise to undertake. For example, let’s say a clinic is valued at $1,000,000. The owner, after 30 years, is getting tired of managing all aspects but if they can sustain their current pace for another 2 years, they may achieve a price of $1,200,000.

In other words, is $200,000 worth it when someone feels they are reaching their limit? For some, it may definitely be the case but what if the owner wants to work less, travel more? What if the current pace is causing health issues? How much are these factors truly worth?

Engage your Expert Team
Before any decision is made, the most important step to take is to have a valuation completed. Knowing the value of the clinic helps the owner to determine if a sale would meet their objectives.

The next step is to discuss the sale with an accountant. Understanding the tax position of the owner is critical. Too many times, the owner wishes to sell but the professional corporation is not in its purest state to facilitate the best possible outcome.

Personal Considerations
The next key factor to consider is what will the owner do post-sale. Is the owner ready to stop practising? If the new owner wants the vendor to stay on, is this realistic? An owner needs to truly do some soul searching and decide after so many years of ownership if they can go back to marching to the beat of another owner’s drum. Relinquishing control sounds easy but for many owners it is not as simple as it sounds.

A sale does not mean the end of an owner’s identity. It also does not mean the end of a career either. A vendor can certainly discard the chains of administration and management in order to seek other opportunities – such as working part-time, doing locum work, or teaching.

So going back to the original question, when is the best time is to sell. Practice owners can quite honestly sell whenever they are ready. The present economic environment most definitely facilitates the successful sale of a practice.

In our current economy, buyers continue to exceed sellers which always creates a robust exit market. We have yet to see the flood of baby-boomer business owners ready to sell. Banks continue to provide 100% financing over 12 years to buyers.

Healthcare in general – be it for people or animals, despite or in spite of a pandemic, has proven to be a profitable business with a continued good economic future.

Therefore, a vendor never needs to feel forced into a sale. Instead, every vendor must simply decide if the time is right for them. Vendors need to do some homework and then move forward with confidence.

 

Jackie Joachim, COO ROI Corp

JACKIE JOACHIM

Jackie has 30 years of experience in the industry as a former banker and now the Chief Operating Officer of ROI Corporation. Please contact her at Jackie.joachim@roicorp.com or 1-844-764-2020.

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Leases and Landlords – Their Impact on Values and Practice Sales

Buying-Selling A Practice, Practice

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The right of first refusal in a lease agreement

The first time the value of a lease is considered is should be when it is being signed. Understandably, the tenant looks at key items such as rent, additional costs, terms, renewals and any other clauses that may be inserted. After much negotiation, the lease is signed, and the owner begins running the practice.

If only things were truly that simple.
When the lease is first signed, many might not be thinking about the eventual sale. Agreeing to things like demolition and relocation clauses may be required but owners must know how these affect the value of the practice and its potential sale.

Obviously not all clauses are created equal. A demolition clause in a building of 30 stories is very different to one in a stand alone building at the corner of a major intersection. While a sale may not be on the horizon for many years down the road, it is important to pay attention to the finer points of the lease so that when the time does come, the assignment from one owner to the next is as smooth as it can possibly be.

An Interesting Case Study
Recently, we encountered a very interesting and frustrating situation. We successfully found a purchaser for our client. It was a very good fit and all parties were working in good faith towards a successful close.

In the course of a sale, the landlord is almost always notified after due diligence and financing are waived. An owner does not want to prematurely alert a landlord and risk the word getting out that they are selling.

Our situation was following this process nicely. When the time came to seek the landlord’s assignment of the lease it was declined. Even though the lease, and most do, stated that the landlord could not unreasonably withhold the assignment, in this case, it was withheld.

My lawyer friends will always agree that the definition of “unreasonably” is up for debate. However, the landlord was willing to provide clear rationale as to why the assignment was declined. Despite the bank providing an approval for 100% financing, the landlord was not confident in the new owner’s ability to run a successful business.

Many landlords will take a personal net worth statement from the applicant and most applicants withhold information for fear of being overcharged.

Unfortunately, not only did this particular purchaser not complete this exercise properly, the resumé provided did not give the landlord confidence that the purchaser could run a successful business.

The landlord felt this office was a key anchor in his plaza and did not want to risk the future success. The other factors that may have influenced the decision of the landlord lay with the vendor.

In the lease, it was clearly written that the practice could not be sold within two years of the lease being signed. It also required the vendor to notify the landlord prior to listing the office for sale. In this case, both of these requirements were not fulfilled.

A Good Lease Does Impact Value
Owners must be strategic when it comes to the sale of their practices. As a tenant, if you have been difficult or challenging, then it is possible these actions can influence the landlord down the road.

Many owners thought the pandemic, (particularly for those with practices located in retail shopping centres), gave them the opportunity to renegotiate lesser rent or remove such clauses. Unfortunately, this was often not the case. In fact, those seeking a rent reduction often found themselves with additional clauses that were not in the original lease.

Remember, in negotiations, everyone has to give something up in order to get something. Also, it seems that the pandemic made landlords even more cautious than before.

With multiple tenants unable to pay rent due to restrictions and limitations, landlords had added expenses that needed to be covered.

The Federal government may have provided some relief but in the end, the pandemic has certainly taught all of us valuable lessons.

A lease definitely affects the value and sale of a business.

The more carefully the lease is crafted, the better the odds that the practice will sell at a higher price, which helps facilitate an exit strategy for the owner.

By understanding the lease and its contents, the owner stands a greater chance of being more profitable while reducing the inherent risks and exposures that are typical with all commercial lease contracts.

It is very common for things to be left out or misconstrued, whether intentional or not. It is always best to have your lawyer or a qualified expert review the documentation process before a lease is signed.

A final word – make sure renewals are also reviewed carefully. Sometimes in the rush of taking care of this “one or two pager”, items can be included that were not in the original lease.

Practice owners have worked extremely hard to build and operate a successful practice. This practice is an asset that must be protected.

Therefore, regardless of what stage a practice is in, long-term planning and attention to detail are paramount when it comes to leasing commercial space.

Jackie Joachim, COO ROI Corp

JACKIE JOACHIM

Jackie has 30 years of experience in the industry as a former banker and now the Chief Operating Officer of ROI Corporation. Please contact her at Jackie.joachim@roicorp.com or 1-844-764-2020.

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Buyer Beware

Buying-Selling A Practice, Practice, Resources

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Caveat-Emptor-Buyer Beware

Recently, I had the privilege of delivering a webinar for buyers. I invited 3 owners to join me so that they could share their wisdom with the audience. It was a jam-packed hour of information and conversation about the market, the value of practices, buying during COVID and of course, the reality of ownership.

Many buyers that I speak to are concerned about a myriad of things – practice values, finding the perfect office, understanding goodwill and the great fear of potentially paying too much. That was the impetus for doing such a webinar.

The key takeaways from the session were:

  1.  Have a business plan – as a young banker, I will admit, that I did ask these of buyers because it was a financing requirement. Deep down, I believed that one doctor was buying from another doctor so what else could possibly be required?Fast forward to today. Boy, was I wrong! Age and experience have certainly opened my eyes. The choice a buyer has is to either stay as an employee/associate or become an owner. However simply buying and entering ownership is not a plan. A buyer needs to look at a potential office to purchase and see how many of the boxes are ticked.If a practice meets 70% of what someone is looking for, then this is something worth considering.A business plan will address how the new owner plans to increase revenue, what marketing/social media plans can be implemented, what services and procedures can be added etc. After all, the goal should be to purchase with the intention of improving not maintaining the status quo. However, keeping things as is, is also okay.
  2.  Practice values are not going down. If a buyer is waiting for the market to cool off, unfortunately that is going to be a long wait. In the last 13 years alone, practice values have never gone down. If you are able to purchase a practice below the appraised value, then likely there was a good reason for this.Certainly however, the norm is that buyers are paying the appraised value or higher. Therefore, if one truly wants to own a practice, this thought must be put aside. Now, I am not saying to rush into any purchase, however, if a buyer is waiting for prices to decrease, it will be a very long wait.
  3. Age of equipment or the facility. An older practice will not have the polish or sparkle that a brand new one will. However, when one is buying an old, more established clinic, the true value is in the patient base/goodwill.While the equipment and facilities may be older, this is still what is being used to generate the revenue reported in the appraisal. And more importantly, those coming for treatment are perfectly happy.For example, 2 clinics can both be appraised at $1,500,000. Clinic #1 is 4 years old with state-of-the-art equipment and generating approximately $500,000. Clinic #2 is 20 years old billing $1,000,000 with existing equipment. Which one should a purchaser buy? I know I would go for #2 because equipment can be replaced as well as a new coat of paint to freshen the place up. While it might not be the perfect clinic for the buyer, it is perfectly fine for those who visit the office for treatment. Office #2 has one huge advantage – established patients which produce strong cash flow.After all, cash flow is king (or queen) and definitely pays the expenses, the loan, and the owner.

The best advice we can offer, which was echoed by our panel of experts, is to find something that meets most of your requirements (level of revenue, location, well-trained staff). Then you can take over, expand/improve so it can be perfect for you.

If you wish to listen/watch our webinar, feel free to visit our website, www.roicorp.com or use the following link, https://vimeo.com/582924776/dd272694b8

Jackie Joachim, COO ROI Corp

JACKIE JOACHIM

Jackie has 30 years of experience in the industry as a former banker and now the Chief Operating Officer of ROI Corporation. Please contact her at Jackie.joachim@roicorp.com or 1-844-764-2020.

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Transitioning A Practice

Buying-Selling A Practice, Practice, Resources

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Transition

The time has come to sell and hand over the reigns to a new owner. Truly an exciting time but also one fraught with apprehension, nervousness and perhaps a bit of regret.

When an owner makes the decision to sell and continues to work for any period post close, one knows life must be different. But can the vendor accept the changes?

The Emotional Challenge of Selling
Regardless of the reason for the sale, every vendor believes he or she has poured their heart and soul into establishing, building, and maintaining the practice. After all, by the time the clinic sells, years of developing relationships, assembling a good team, creating a brand, and achieving success, are the reasons someone is willing to buy the practice.

But this is where the challenge starts. Handing control over to a new owner after holding this position for many years, often 25 plus years, is no easy feat.

The vendor must be prepared to accept change. New owners will have a new management style, will want to make changes, and will most definitely make their own share of mistakes. Vendors must be prepared to stand by and watch without interfering.

Good Intentions Notwithstanding… Reality Sets In
In the simplest terms, a practice transition is an event or transaction that results in a change in the effective ownership of the clinic.

Transition is all about the existing owner taking a back seat in the clinic while allowing a new owner to shine. And expectation, transition means the vendor will focus on putting the new owner in the best position possible by supporting the team that was once the vendor’s as well as the plans of the new owner.

Transitions are not easy, and they often come with a myriad of finite details. Most vendors hope for synergies between themselves and the buyer. They initially welcome the new energy to the practice. Everyone starts off with the greatest of intentions.

The vendor says they will support the new owner in any possible way and reassures the buyer that the office is now theirs. They are welcome to do as they see fit. The buyer has tremendous respect for the previous owner.

They want to ensure the vendor is happy and assures them their presence is welcome for as long as they wish to be there. But then reality sets in very quickly. Previous owners feel that the new owner is making many mistakes and of course, the new owner is not happy that the prior owner is “stuck” in his/her ways. And so, the dance begins!

Prepare for Change
The best piece of advice we give to vendors is to expect and prepare for change. When they sign the listing agreement, we warn them that the time post close is not going to be easy. Eventually, it can be quite harmonious but like any relationship, finding the synergy and sweet spot of co-existence takes time.

If both parties are truly patient and willing to work at it (just like a marriage), then a mutually beneficial relationship can certainly be the result. A vendor needs to remember that a purchaser now has a significant loan that requires repayment. The new owner may make choices or decisions that are not what the previous owner would make, but that is to be expected. A purchaser also needs to remember that change is never easy.

If you want a vendor to stay, the most important thing is open communication. Deliver messages directly to the vendor, not through staff.

The most successful relationships in life are based on both parties taking the time to share their thoughts, and concerns while also doing their utmost to truly listen to the other person. Strong communication does not take place by accident; planning, idea sharing, and discussions must be scheduled and practiced.

Bottom line
A successful transition does not simply happen. It takes work, patience, and mutual understanding. If both the vendor and the purchaser are willing to have open dialogue and accept that change is inevitable then the success rate increases.

Jackie Joachim, COO ROI Corp

JACKIE JOACHIM

Jackie has 30 years of experience in the industry as a former banker and now the Chief Operating Officer of ROI Corporation. Please contact her at Jackie.joachim@roicorp.com or 1-844-764-2020.

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Buying The Perfect Practice

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Every buyer that I have ever met, has the same goal, to buy the perfect practice. Is this reasonable? Emotionally yes, practically no. A buyer can visit 20 different practices and find something wrong with everyone. This does not mean that the practices are not good options. It just means that the buyer will never find the perfect one. News flash: THERE IS NO SUCH THING AS A PERFECT PRACTICE. The best anyone can do is to find one that they like with a good location and potential for improvement. This practice has bones. The buyer can make it perfect for themselves.

The best place to start in your quest for the perfect practice is to be realistic about your strengths and weaknesses. In other words, what are the ways you can bring value to a practice? Before you start looking at the possibilities available, its essential that you think through key personal and market factors.

Many buyers, when looking at purchasing an existing practice should have an appraisal in hand. The appraisal should present the facts that are critical in evaluating whether this is the right opportunity for you. However, many get fixated on multiples of EBITDA. If you are not planning on working in the office and are purchasing for investment purposes, a multiple of EBITDA is more relevant. Because this is an investment, the new owner needs to pay an associate to perform the services. However, it is truly not uncommon for a purchaser to buy a clinic at 10- or 12-times EBITDA because they will be the new owner and operator. Personal payment can be more flexible for the owner versus paying an associate an industry standard. Many may ask as to why they should pay such a high multiple. The answer is quite simple, as an associate, one could make more money. However, the associate never builds equity. For example, if the practice being considered has $100K left after all expenses and the loan payment is made, if the new owner can live on $100K, then why not pay the higher multiple? Afterall, ten years from now, hopefully revenue has increased due to improvements made but more importantly, the new owner has equity in a practice that has been completely financed.

So many times as an appraiser, we do hear from a buyer that the practice is over valued. If a multiple of EBITDA is the way one determines value, this may be a fair statement to someone who will never work in the practice. However, practice values have never declined in the last 15 years. In fact, quite the opposite. Organically a practice will increase at a minimum 5-8%. Depending on location and other critical factors, the increase can be greater. What is most important for a buyer to ask themselves is the following:

• Can I qualify for financing?
• Do I like the actual location? (highly visible, new housing developments)
• What are the patients like? (age, cultural background, socio-economic background)
• Are the staff well trained?
• Can I increase services?
• Has revenue been consistent year over year?

There truly are so many factors to consider. However, if a buyer looks for the perfect practice,
one will likely not be found. Buy a good practice that has a solid foundation that you can build
into your perfect practice. And remember, the ultimate value of a practice is the final price
that is decided between the buyer and the seller.

Jackie Joachim, COO ROI Corp

JACKIE JOACHIM

Jackie has 30 years of experience in the industry as a former banker and now the Chief Operating Officer of ROI Corporation. Please contact her at Jackie.joachim@roicorp.com or 1-844-764-2020.

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The Emotional Roller Coaster of Buying a Practice

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When the time comes to take the plunge and finally purchase a practice, there are so many thoughts that race through a buyer’s mind. Everyone is looking for the perfect practice. Unfortunately, it simply does not exist. A buyer can look at 10 different offices and find something wrong with every single one. It is understandable to want the best as this is a major purchase. However, buying a practice requires a delicate balance between logic and emotion.

While some would believe that emotion has no place in a decision this important, in reality, it does. Like it or not, emotion does in fact play a very important role when buying a business. It is critical that a purchaser cannot allow emotion to dictate the decisions that have to be based upon logic. And sometimes, the purchaser should not let logic overtake the decision-making process when emotion is required. The key to this delicate balancing act is knowing how to separate the two, and to recognize when either state may be impacting your decision-making process altogether.

Becoming a well-prepared and knowledgeable buyer is the key to your success. The initial choice to purchase is largely motivated by the desire to better your circumstances. A purchaser is likely tired of working for another doctor. Why build equity for someone else? Why have one’s schedule controlled by another? Why not invest in oneself? Most purchasers have likely reached the point where enough is enough – its time to be the boss. It is important to consider the potential rewards gained from owning your own practice. While everyone has their individual reasons, certainly controlling your own destiny, making more money, having the opportunity to improve your quality of life, and helping others, are just a few of the common reasons. These are all things that most people hope to achieve.

Choosing to buy during a pandemic is truly the time to keep the emotional side in check so that you stay motivated, especially in this economy. There are likely many people advising against the purchase of a clinic. But why would this not be the right time? Interest rates are at their lowest and quite frankly because there are some people who are either afraid or simply do not qualify, you may not be in a competitive situation. This means, you would not need to overpay on a practice that you might have pre-pandemic or certainly one year post pandemic. Fear is important as long as it does not cripple you from making a decision. To be successful, you need to cut a new path to gain success. By no means should you take ridiculous risks either. Ownership is not for everyone. But if you are not prepared to be a career associate, ask yourself if the people giving you negative feedback would still say no regardless of the economy. Trust your instincts. If your inner voice tells you that you are meant to be your own boss, then stop seeking the approval of others and look for guidance from those who are well-informed and knowledgeable.

There are going to be times during the clinic-buying process that you will be knocked off track. You will face situations where deals fall through, you will find it hard to locate any decent practices for sale, or you uncover some issues during your due diligence. These scenarios, plus many others, can surface after you have invested a lot of time, effort, and yes money, to analyze the office. A buyer must, however, have the strength to dust off these little setbacks and carry on towards the finish line or make the decision to walk away. This is definitely where emotions can play havoc on a prospective buyer. On the one hand, you want to stay upbeat and committed to the goal. On the other hand, though, you also need a good dose of logic because you must decide if you can live with some negatives or simply not move forward because it is the wrong deal.

Finally, you may be the best clinician. But you still need to educate yourself and surround yourself with experts. A good accountant, lawyer, and banker are so key to the equation. The right team behind you enables you to further grow the practice you acquire.

Last piece of advice. Please do not think you are an appraiser. Even if you have seen lots of practices, you are still not an expert. For every practice a buyer reviews, guaranteed an appraiser has seen twenty. A qualified appraiser has placed a value on an office based on a variety of factors. You might not agree with the value. That is fine but telling the appraiser they have overvalued the office is simply wrong. If you like the office but do not agree with the value, nothing stops you from making an offer at a price you are comfortable with. It really can be that simple. If your offer is accepted, due diligence will give you the true opportunity to see if the practice really is a good investment. Always remember, the stress you experience as a buyer is very similar to what a vendor also experiences. These are significant transactions and should not be taken lightly.

Jackie Joachim, COO ROI Corp

JACKIE JOACHIM

Jackie has 30 years of experience in the industry as a former banker and now the Chief Operating Officer of ROI Corporation. Please contact her at Jackie.joachim@roicorp.com or 1-844-764-2020.

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The Emotional Roller Coaster of Selling a Practice

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When the decision to sell is made, one is thinking from the logical, left-brain side of the mind. There are numerous practicalities to take care of and the owner knows that selling will help achieve personal goals. However, deciding to sell can be difficult and many cannot imagine things could become any more difficult. But they can. Selling a practice is fraught with a myriad of emotions.

The Emotional Peaks
We know selling a practice is always emotional. We do remind our clients though, that there are two particularly challenging periods once the listing agreement is signed. The first is while we wait for offers to come in and the second is while we wait for conditions to be waived.

During the initial stage of waiting for an offer, one cannot help but feel exposed. After all, potential buyers are reviewing your information and deciding if this is a good opportunity for them.

A vendor cannot help but feel as if he/she is being judged. When an offer does not come quickly, the owner asks, “why is my clinic not good enough”. Of course, it is good enough. In fact, it is a good option, but it must be the right option for a particular buyer.

Any time in life when we are waiting on someone else to make a decision that affects us, it is very difficult, it makes us doubt ourselves and why our practice has not been chosen. As a vendor, it is critical you remember that you cannot appeal to everyone. And that is truly okay.

Offer Anxiety
There is always the right buyer for your office, and it is impossible to appeal to all. It may take time, but the key is not to second guess everything that is or is not happening. Your practice is unique, and the right buyer will have their own unique set of circumstances that make them the right fit.

For many owners, the first emotions experienced around the offer for the practice will be excitement, exhilaration, and pride.

The fact that there is a buyer for your office validates that you have created something of value and your clinic is wanted. As such, once an offer has been placed, many start to celebrate. We encourage owners to simply wait.

It’s Not Over Until It’s Over
Even with an offer being accepted, there are still hurdles that the purchaser must over come.

The toughest two are financing and assigning of the lease. Financing is certainly more difficult during this pandemic. Largely because bankers are scrutinizing the purchasers far more than pre-COVID days. They want to ensure when they grant a loan that they have confidence in the buyer.

The assignment of the lease can be challenging for many reasons – for example if an owner has had a difficult relationship with the landlord over the years, the landlord may not be willing to be so co-operative. Perhaps during the assignment of the lease, the purchaser may use this opportunity to ask for things that may not be granted.

Should any condition not be met, unfortunately, the offer becomes void, and deposit is returned. This is difficult for the vendor as now things start over.

This does happen but it does not mean your practice will not sell. You just need to be patient. The right buyer will be motivated and never stray from the motivation that drew them to your practice initially.

Transition Stress
Another stress a vendor may not be prepared for is the actual transition once all the conditions have been removed and the closing date is in sight.

It is normal to start to question the initial decision to sell. Is it right for your staff and patients? How will things run once it is in new hands? How will the owner really fill their time after the sale?

A sale brings up strong emotions particularly when an owner has been owning and operating for many years. If the vendor stays on, the realization that new management is now in place and that a say in the day-to-day decision making is no longer part of their responsibility.

Many do not realize how a large part of the vendor’s identity is tied to the clinic.

Rest assured that these thoughts and feelings are normal. Preparing ahead of time is the best way to handle the emotions connected to selling your practice.

While some doubts and fears are normal, preparation and planning for what life will look like post sale, will help an owner navigate the transaction as smoothly as possible.

Jackie Joachim, COO ROI Corp

JACKIE JOACHIM

Jackie has 30 years of experience in the industry as a former banker and now the Chief Operating Officer of ROI Corporation. Please contact her at Jackie.joachim@roicorp.com or 1-844-764-2020.

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One Year Later

Human Resources

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There is no doubt the world changed a year ago. The life we took for granted came to a screeching halt while we waited in helpless disbelief to hear how this pandemic and its incredible impact created stress and anxiety literally by the hour.

The pandemic forced the closure of schools, places of worship, community centres and businesses. Isolation was thrust upon us as we were prevented from seeing those we love and forced into mandated social-distancing and or self-isolation for our collective protection.

Take the positive from COVID
Despite the negative impact of COVID-19, we must however, recognize the positive that has also risen out of this crisis. If we look closely, there have also been many opportunities to reflect upon and be grateful. We have been forced to slow down which has allowed us to take a step back and appreciate so many things we took for granted.

Prior to March 2020, how many of us were close to burning out thanks to the pace we were running at? Being forced to spend more time together particularly from March to June, enabled us to focus on and breathe new life into the key relationships that we may have taken for granted. While we may not have been able to visit those we love, we were given the gift of time with the people in our home or bubble.

Viewing Trust Through Your Patient’s Eyes
As a practice owner, perhaps you view patients through new eyes. Upon reopening offices and during these past two months, the response of patients returning to your office should make doctors and their teams feel grateful. People are entrusting you with their health despite the fears swirling of additional strains and the stress of waiting for a vaccine.

Hopefully now, patients are truly appreciated as they place trust in the hands of those who rely on their office to continue supporting themselves and the team that works in it. Many practice owners may have also seen certain suppliers acknowledge the hardship experienced, extending flexible terms or payment plans.

For many, COVID-19 has given tremendous courage. The courage can be seen in the simplest of forms such as taking on a new activity, or reflecting on one’s self. It can be seen in the parents and teachers who are working so hard to preserve the mental health of our children. It has even caused those who are working as associates to take the plunge and pursue ownership.

It either accelerated the desire to be the owner or was the final push to pursue this. Either way, people are buying or starting practices. Again, with the gift of time, many of us have been blessed with the need to slowdown and re-evaluate our choices and the way we approach things.

Our thoughts are hopefully more purposeful and with intent as opposed to simply reactionary. My new favourite quote is from Nelson Mandela – “may your choices reflect your hopes, not your fears”. I recite this everyday multiple times.

COVID-19 despite the tragedy and hardship many have experienced, has also brought out the best in humanity. It has made those of us who are fortunate to look around to those in need and extend a helping hand. More businesses are publicizing donations to charities in exchange for virtual registrations, while others are quietly donating food to help feed the hungry. It has also encouraged many of us to listen more and talk less.

Grateful for the Simple Joys
Perhaps one of the best things of COVID-19 is that it has hopefully made us all more grateful. Remember the simple joy of meeting a friend for coffee in a café, lunch in a restaurant, attending your place of worship and so much more. I for one have so much to be grateful for. I am truly blessed with the most supportive husband and daughter, the ability to do what I love on an even greater level and the new people I have met because of this pandemic.

As one who appraises and sells practices, I have the privilege of listening to people as they share their hopes and dreams. COVID-19 has made us more vulnerable and human and for that I am truly grateful.

Jackie Joachim, COO ROI Corp

JACKIE JOACHIM

Jackie has 30 years of experience in the industry as a former banker and now the Chief Operating Officer of ROI Corporation. Please contact her at Jackie.joachim@roicorp.com or 1-844-764-2020.

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5 Key Lessons Taught By COVID

Finance|Wealth, Human Resources, Practice, Resources

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The unprecedented coronavirus pandemic has caused changes in mindset, attitude, direction, and behaviour for practice owners. It changed for employees too. One year later, we can all agree that important lessons have been learned – not always by choice but by necessity.

 

Lesson #1: Learning to be agile.
We all had to respond quickly to changing events. Sometimes with only a couple of days notice. This made us realize how
important it is to be comfortable with change and willing to shift gears when necessary. A sub lesson in learning to be agile was also recognizing the gaps in the way things were being done. Because we had to change, perhaps some of these changes had positive outcomes.

Lesson #2: Appreciating technology more.
So many of us have had to change the way we do business. The face-to-face meetings, attending events/conventions and how
patients needed to be looked after are just some of the many examples. Corona emphasized the importance of technology. Think of all the virtual learning opportunities we have had to embrace or tele-medicine that became a necessary and by default option. I for one was forced to embrace webinars and Zoom calls. Prior to the pandemic, these were never an option for me because I was not comfortable. Simple applications like LinkedIn, Facebook and Instagram have enabled me to meet new people and stay connected to those I already knew. I must admit, until the pandemic, I never appreciated the value of these tools.

Lesson #3: Being more empathetic.
In these trying times, clear communication with all stakeholders of your practice—staff, partners, advisors, and patients are
critical. There is no doubt that the stress of the pandemic on owners is massive. The key towards sustaining your business
in this situation is being transparent with your stakeholders and prioritising their needs. Apart from supporting your staff and
understanding the situation, you must support your workforce by encouraging them to learn and give them opportunities to join Zoom training and courses.

Lesson #4: The essential nature of social interaction.
While digital collaboration tools have become critical to remote work and will remain post-pandemic, the new way of work also emphasized the need for social interaction for humans. Suddenly a trip to your office during a lockdown may possibly be a real treat or outing. People miss human contact with those outside of their homes. Never underestimate the positive effect you have on the people who walk through your doors. For the staff, as stressed as people may be, the ability to laugh or participate in banter can mean so much. For example, when I was at my office a few weeks ago, four of us, while social distancing, had the most frivolous conversation that left us simply laughing. It was such a wonderful feeling, one that has been missed from our daily lives.

Lesson 5: Keeping a cash buffer.
The period from mid-March 2020 to mid-June 2020, taught all of us the importance of fiscal responsibility. Certainly, our credit cards took a beating as evidenced from the multitude of Amazon packages, however, for owners of practices as well as the associates, these were very scary times. Even with the various government programs, the major lesson learned by all was that we must have something in reserve. It is why banks are being tough on purchasers today because they must be confident that this person could withstand another lockdown if it ever happened. The good thing we have seen is that healthcare is recession resilient and now pandemic resilient. The pandemic has taught us the importance of having a cash buffer. Hopefully, it has also taught many of us to be grateful for what we have. So many have fallen on economic hardship and forced with extremely difficult decisions.

The pandemic has been an unforeseen situation for the whole world. It has brought about crisis and problems we never experienced before and has exposed us to many unknown vulnerabilities. This has been a period for all business owners to take a closer look at how their practice was run pre-pandemic versus now. However, along with the many challenges we faced due to the pandemic, it has also given us an opportunity to align, adapt and amend businesses as well as reinforce the strategies to make the most of the ongoing situation. Clearly, it has also taught all of us lessons that shall be both applicable and beneficial in the long run. A wise man told me that we do not need to embrace the reason for the change, but we must embrace change!

Jackie Joachim, COO ROI Corp

JACKIE JOACHIM

Jackie has 30 years of experience in the industry as a former banker and now the Chief Operating Officer of ROI Corporation. Please contact her at Jackie.joachim@roicorp.com or 1-844-764-2020.

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