Buying or Selling a Practice

When You are Looking to Sell Your Practice or Buy a Practice, What you Should Know About Valuations, Financing and Payout Options.

Chris Frederiksen, CEO & Chairman 2020 Group USA

The

most frequent questions I get are:

•What’s the Multiple? •What’s the Multiple? •What’s the Multiple? Announcing our 2013 Seminar Program– Register Today at www.2020groupUSA.com

PCPS Survey  Sole Practitioner • 65% are over 55

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PCPS Survey  Multi-Partner Firms • 63% expect a partner exit within 5 years

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The Multiple is not the cause of a practice’s value – it’s the effect of the 15 C’s

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The 15 C’s

1.Client Retention 2.Culture of the Firms 3.Chemistry of the People Announcing our 2013 Seminar Program– Register Today at www.2020groupUSA.com

The 15 C’s 4.Care standards for Clients 5.Comparable Relationship 6.Co-dependency with Clients Announcing our 2013 Seminar Program– Register Today at www.2020groupUSA.com

The 15 C’s 7.Capacity to serve the Clients 8.Charging, Billing and collecting of fees 9.Close enough office location Announcing our 2013 Seminar Program– Register Today at www.2020groupUSA.com

The 15 C’s 10.Cost Savings 11.Cash at Closing 12.Contingency Payout Announcing our 2013 Seminar Program– Register Today at www.2020groupUSA.com

The 15 C’s

13.Compensation for services rendered 14.Cutting back 15. Communicating the deal to Clients Announcing our 2013 Seminar Program– Register Today at www.2020groupUSA.com

10 Key Considerations of Valuation 1. Location 2. Size 3. Types of Practice 4. Dependency 5. Staff Announcing our 2013 Seminar Program– Register Today at www.2020groupUSA.com

10 Key Considerations of Valuation 6. Recurring Revenue 7. Billing Rates and Realization 8. Concentration of Fees 9. Age of Clients 10.Technology Announcing our 2013 Seminar Program– Register Today at www.2020groupUSA.com

21 Key Deal Points 1. Price Determination 2. Cash Down payment 3. Payout Period 4. Acceleration 5. Contingency 6. Collars 7. Tax Treatment Announcing our 2013 Seminar Program– Register Today at www.2020groupUSA.com

21 Key Deal Points 8. Financing 9. People and Benefits 10.Use of Name 11.Advising Clients 12.Fees 13.Deficient Work (Fix-it) 14.Uncompleted Work (Catch-up) Announcing our 2013 Seminar Program– Register Today at www.2020groupUSA.com

21 Key Deal Points 15.Consultancy 16. “Perks” 17. Tail Insurance 18. Non-Compete 19. Disputes 20. Death 21. Divorce Announcing our 2013 Seminar Program– Register Today at www.2020groupUSA.com

So what’s the REAL deal on Multiples?

• Major City • Suburbs • Rural Announcing our 2013 Seminar Program– Register Today at www.2020groupUSA.com

Final Piece of Advice

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