Questions to Ask Before Hiring a Consultant
1. How many practice transitions and/or sales
have you been involved with?
Answer: 750
+plus
2. How many years in the business?
Answer:Combined 24 years in practice transitions and another 10 years consulting in the areas of
business and finance.>
3. How many of your sales have ended up in
litigation/arbitration or in professional
divorce?
Answer: Fifteen. Two arbitration and thirteen
separations of associate buy-in type transactions
with no arbitration or litigation.
4. How many purchasers have defaulted on their promissory notes to sellers and/or banks?
Answer: Five to a bank and two to the seller.
5. What is the charge for an appraisal?
Answer: Between $1,600.00 and $2,500.00. (Is the fee part of the total fee charged for the sale of the practice? Answer: Yes.)
6. What do you feel are your strong points in providing transition/brokerage services?
Answer: Integrity; returning calls within 24 hours or less; a flat fee for performance (not
charging a percentage of the sales price);
competence with 10 years of prior business and
finance experience; follow up after the
transaction; providing a transition guide for
buyer and seller; conducting staff meetings on
how to best handle the transition; and having an
attorney and accountant on retainer for updating
and researching changes in law and tax law.
7. Is your appraisal contingent on signing a
listing agreement?
Answer: No.
8. How do you know you are accurate with your
appraisal?
Answer: By using legitimate, tested formulas
and tracking the results of previous transitions.
9. Do you feel there is a conflict between
appraising a practice and then listing it for a
percentage of the sales price?
Answer: Yes, because the higher the appraised
value, the potential for more brokerage fees.
Some brokers will inflate the sales price to
persuade the seller to sign the listing agreement.
A biased appraisal makes it much more difficult
in convincing a purchaser that the sales price is
fair and equitable. The broker might also play
favorites with his more expensive listings.
10.What type of post-sale/post-transition
follow-up do you do, both with the buyer and
seller?
Answer: Every month for the first three or more
months after closing, then on "as needed" basis.
Also, we prefer the buyer send us monthly
reports for the first 12 month period to allow us
to track the practice status.
11. Is this your main occupation or do you have
other activities to help subsidize your
consulting business (i.e. sell insurance,
securities, real estate, equipment/supplies, or
practice dentistry or management)?
Answer: Our time is devoted entirely to
facilitating successful transitions.
How will I know that these other activities do
not conflict with the quality of service I'll
receive?
Answer: Our only activities are facilitating,
consulting, and coaching dental practice
transitions. Our compensation is derived solely
from practice transitions and post-transition
management.
12. How do I know I have the right candidate
(seller/purchaser)? What systems do you have
to help both parties better understand their
compatibility concerning goals, needs and
personalities?
Answer: Depending on the type of transition,
many times we have each client fill out a
personal needs analysis and/or a personality
profile. This tells us more about their goals and
their work style. We look to see if goals are
complimentary with both parties. We encourage "Pre-courtship" activities (i.e. checking
references, out of the office activities, spouses
meet together, etc.) This helps establish a better
understanding of both parties needs and goals.
We look at how they follow through with their
commitments through the consulting process.
13. Do you have "pre-qualifying" financial
guidelines with regard to whether or not a
potential buyer can secure funding?
Answer: Yes, we have established professional
relationships with several lending institutions
which check credit references. We also review
financial statements and income needs.
15. What do you include in your appraisal?
Answer: A comprehensive practice prospectus
covering practice operations and statistics along
with an appraisal report analyzing financial
information and projections.
16.Does your appraisal cover enough
information for one to complete a due diligence
to the practice?
Answer: Yes, with the exception of a chart audit
which the buyer completes independently.
17. What resources do you have to keep up on
the latest changes in business and tax laws?
Answer: We have an attorney and accountant on
retainer and also subscribe to publications on
legal, tax and practice management issues.
18. How long does it take to transition/sell a
practice?
Answer: This depends on various factors, like
location, size of practice, terms, type of
transition and market demand. In most cases, 6
to 12 months.
19. How are you compensated?
Answer: Our current fee schedule is based on a
flat fee for performance and is graded based
upon the valuation of the practice as follows:
$20,000 for a practice priced between $200,000
to $300,000; $25,000 for a practice priced
between $300,001 and $400,000; $30,000 for
a practice priced over $400,00. Our fee is based
on performance and therefore not due until the
sale is completed. The buyer may choose to pay
a fee of $10,000 for pre and post-transition
consulting. If practice value is below $200,000
then the fee is 10% of purchase price.
20. What services do you offer for the fees
charged?
Answer:
21.Please tell me how your form of
compensation is best for me and the transition
of the practice.
Answer: Adds more integrity to the process. It
requires the practice transition consultant to
handle the transition on a win/win basis and
helps minimize the need to compromise the
goals of both parties.
22. Do you have any literature that will help me
better understand the transition process and
how I can better prepare myself for it?
Answer: Yes, we have a booklets and audio
presentations for sellers and buyers which cover
many important issues regarding the transition
process, as well as other written materials.
23. How well does the buyer do after the
transaction is completed?
Answer: Over 93% of our buyers either meet or
exceed the previous year gross production in the
first year and experience less than 10% patient
attrition. Survey: 96% client satisfaction
24. Can you furnish a list of the five most recent
sales and/or transitions of buyers and sellers?
Answer: References are furnished upon request.
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For more information regarding how we work and the services we provide, contact us.
CTC Associates
PO Box 1357 Midway, UT 84049
2305 E. Arapahoe Rd., Ste. 220 Littleton, CO 80122
(801) 298-4242 (435) 654-1717 (303) 795-8800