Question: How long do you think it should take to sell a practice:-
• Two years?
• One year?
• 9 months?
• 6 months?
The answer – like so many – is it depends.
Question: What does it depend on?
Answer: Many things but mainly on the size of the practice.
If you have a practice with an office, staff and a large number of clients then that will take longer to sell than a practice with no staff, no office and a small number of clients.
Let me give you a rule of thumb. If we are selling a practice with less that £100k of fees then I would expect the sales process from start to finish to take around 3 – 5 months. That is from the point at which we have all the information we need to market the practice and send out the mailer to potential buyers.
For practices with fees between £100k and £500k that time scale can be increased to around 5 – 6 months. There is no reason why it should take longer. Most of the delays when selling a practice occur when there is more than one partner and they can’t agree, or where the solicitors take their time to deal with contractual queries. If everything can be agreed at the due diligence stage and heads of terms are signed then it should (in theory) go through without a hitch.
Practices in excess of £500k can take longer. This is usually because there are more things that need to be decided upon. But with a broker pushing things through making sure all parties are in agreement, discussions do not have to be protracted. The more people involved in the decision making process the more things can be delayed.
Our average case takes 5 months from start to finish. We work on the basis that if a vendor wants to sell, the sooner it completes the better. Most buyers are also keen for the deal to go through as well. We get paid only when the deal completes, so we are keen to see the parties agree at all stages of the process. We really don’t like it if we get close to completion to find one party pulls out. That is a waste of time for everyone and can be very frustrating. Worst case scenario is when, on the eve of completion, the deal falls through. And yes it has happened to us.
Don’t assume it has to take years to sell a practice – it can take less time than you expect. If you want to discuss this further then you can contact me Nicola Draper on 01788 816440 or email me at n.draper@draperhinks.co.uk. Alternatively contact Diane Crawley, my office manager, at d,crawley@draperhinks.co.uk or on 01788 816440.