Owning a business is definitely a fulfillment of people's lifelong dreams. To those who are looking forward to having their own Long Island audiology practice, you better consider purchasing one instead of starting it from scratch. As long as you actually have the money to make the purchase, you can go ahead with your choice.
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.
When you are buying, there are some tips that you should be able to take advantage of. You have to be aware of what it is you really are buying. Of course, you also have to pay attention to where you are certainly buying them, the area of the business, the purchase deed, and many other important records for your business.
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, a business that actually shows you an inconsistent financial statement is not the best place for you to start up in. In order for you to eliminate the worry of an inconsistent financial statement, your seller should provide you with income statements, balance sheets, and tax returns that covers three years prior leading up to the sale. Compare these statements properly.
You also have to watch out when there is an abnormal or inexplicable fluctuations in its sales. While it is true that the sales will definitely fluctuate on a yearly basis because of the changes in the economy, third party payers, or any other events, there should always be an explanation for that. If it is random, then back out of the 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.
When you are buying, there are some tips that you should be able to take advantage of. You have to be aware of what it is you really are buying. Of course, you also have to pay attention to where you are certainly buying them, the area of the business, the purchase deed, and many other important records for your business.
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, a business that actually shows you an inconsistent financial statement is not the best place for you to start up in. In order for you to eliminate the worry of an inconsistent financial statement, your seller should provide you with income statements, balance sheets, and tax returns that covers three years prior leading up to the sale. Compare these statements properly.
You also have to watch out when there is an abnormal or inexplicable fluctuations in its sales. While it is true that the sales will definitely fluctuate on a yearly basis because of the changes in the economy, third party payers, or any other events, there should always be an explanation for that. If it is random, then back out of the 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.
