AFTCO’s philosophy of “Equitable Transactions through Dual Representation” is a revolutionary concept for someone to readily accept. People are accustomed to using “negotiations” as the common method of doing business. AFTCO is an informed third party that provides both parties with objective information needed to make sound decisions. Nonetheless, occasionally we are told by clients that they want another party to analyze whether or not they should buy or sell a practice, a certain sign of not understanding our role.
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We advocate expert advice. The problem develops in determining just who is an expert. AFTCO has sold more practices than any other firm in the United States, and therefore has established a valid claim to its expert status. It’s the advice from experts who do not actively engage in this business, or advice from too many experts that can cause the most confusion. The following stories may help you to understand the dilemma.
This story was told by a dental equipment service man:
It seems the most common service call a service company receives is for compressor repairs. Most problems are caused by the weekend cleaning crew unplugging the compressor while cleaning the office, and then forgetting to plug it back in when they are finished. The doctor comes in the office on Monday morning, turns on the switch for the compressor and nothing happens. He panics and calls the service man before checking anything. The service man walks into the mechanical room, plugs in the compressor, then walks out and laughs. He then tells the doctor what the “problem” was and hands him a bill for $100.
Needless to say, the doctor is always very unhappy. He becomes incensed that the service man is charging him $100 for plugging in the compressor. No matter how much the service man explains that he has to be paid for his time, the doctor resents it. That is when he learned to walk into the mechanical room, close the door, sit down and read the morning paper. He would let twenty minutes or so go by, make some noise and then plug in the compressor, and walk out saying that it was fixed. The doctor would be pleased; he’d gladly pay the bill, and even tip a few dollars. He learned never to tell them the compressor was unplugged.
The moral behind the story is even if the answer is obvious; it’s better to take lots of time and make plenty of noise before telling you the obvious. The only way an expert can ask for and justify a fee is to use both time and noise to satisfy you that something was accomplished for the fee you are charged.
The next story was told by an accountant:
The accountant said that clients would come to him for advice on investing their money, tax shelters, buying or selling a business or a practice, and other advice. The accountant was flattered by their confidence but he realized he was no expert in those fields. He was afraid that if he told them this however, they might seek advice from someone else and he would lose them as a client.
The accountant said, “In school, they taught us how to compute taxes and fill out tax forms, categorize income and expenses, depreciation schedules, and some tax laws. This was not a business course, we were not taught business or how to run one. As a matter of fact, attorneys and accountants have a reputation for being poor businessmen themselves.”
"My clients expect too much from me. I want to help them, but their business is as foreign to me as mine is to them. I can project income and taxes based on historical data, but that does not allow me to make projections for the future. They expect it from me, so I do what I can just so I don’t lose them as clients. I realized it was safer to always suggest that they do nothing. If they did something based on my advice, and it was wrong, then I was wrong. However, if they did nothing, then nothing could go wrong, and I would never be wrong. If they didn’t know that they knew their market better and were more capable of making a decision than I, then I was going to take the safest route and advise against it. I have to make a living too, you know.”
Well, the same thing applies to hiring experts, whether they are lawyers, accountants, or consultants. If you hire them to help you make a decision, the safest conclusion for them would be to advise you to do nothing, or look for something else entirely.
Lawyers are put in the same position. They don’t know the business aspects of a dental practice. They may have other healthcare clients, but their discussions pertain to legal considerations with perhaps an occasional passing comment such as, “How’s business?”
Don’t ask these pseudo practice evaluation experts to appraise a practice to see if it is overpriced by ten or twenty thousand dollars… there is no scientific basis on which to draw a conclusion, and it’s just not relevant when you look at the lifetime earning potential from this transaction.
Too many experts lose sight of the real value (lifetime earnings) of a practice, and the wrong advice could result in your missing out on the opportunity to make millions over a lifetime, in the practice you want. When all is said and done, you are the one who has to live with that decision. Don’t look to the less informed to help you make your decision; it won’t work now, and it won’t work in the future. It will be your decision to win or lose. It’s time to call AFTCO!