There are many different reasons for what seems like a perfect transaction to go bad.
See MorePeople have asked us what makes a seemingly perfectly good transaction go bad. There are many different reasons, but the following causes are the most common:
* Let the purchaser start working in your office before the closing has been finalized. Since the purchaser is not yet fully committed to buy your practice, you can’t turn patients over to him, so his/her schedule is slow. The purchaser comes to the conclusiong that the practice is not busy enough and changes his mind about buying it.
* Begin to “negotiate” the terms of the agreement. Although the transaction is structured fairly, see if you can win some points that give you an advantage over the other person in the transaction. Once the other party realizes you do not intend to be fair, he begins to unilaterally negotiate with you, or just changes his mind about going through with the transaction.
* Talk business and negotiate with the other party. When the other party avoids AFTCO to talk directly with you about the terms of the agreement, etc., you’ll end up talking yourself out of a fair transaction in no time at all.
* Make unreasonable demands. Tell the other party that “your attorney wants it” whether it is fair or not. That will drive the other party away in no time.
* Let someone else make your decisions for you. Advisors are there to advise, not to make the decisions for you. Well-meaning advisors oftentimes have a unilateral perspective that can easily dispatch the best of transactions.
* Talk about the transaction to well-meaning, but uninformed friends who are unfamiliar with your business. Let them advise you and/or compare your transaction with other deals they've "negotiated."
Don't let these things happen to you! Keep control of your transaction and think for yourself. When it comes to advisors, you should remember this old Chinese proverb, “A man with two watches never knows the time!”
A dentist with two advisors... never knows the truth!
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