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What's Your Lab Strategy?

You’ve been working in your lab for the last 20+ years, providing your product to your clients every day, making many patients and doctors happy.  

 

You take care to ensure the cases go out on time, the Rx has been followed and everything was as the doctor ordered.  You make sure all the bills get paid, the employees are happy and hopefully you are making a good living from all this as well.  BUT, have you taken the time to think about when and how will you retire?  

 

Actually, it should be “How and When,” because we find not everyone knows how much they need to retire on and for how long they will need the money.

 

If you have sought professional investing advice, a good financial planner will have laid out a plan for you to see how much money you will need until you don’t require any more money.

 

Have you saved enough?  Do you have enough assets that can be liquidated to get you there?  Did you factor in the sale of your lab in that equation?  If so, is your lab still a saleable entity in today’s market?

 

Whatis a saleable lab in today’s market?  That depends on a lot of factors. Here are some of them:

 

1)   Are you of a relevant size in revenue that will attract the big players who are acquiring labs and do you know their parameters?

2)   Do you have all your production, operations and financial systems in place to attract a buyer?

3)   Are you in a good location both geographically and professionally?

4)   Do you know how much you need, net of taxes, to help your retirement plan?

5)   Do you know how to get there?

 

These are the 5 big questions that you need to know if you are planning to sell your lab and get a fair market price for it.  

 

There are several players in today’s market.  Some have defined parameters as to what they are looking for and some are more flexible.  Others are well funded and some are not.  Some have a lot of experience.  Some not as much. Where do you fit into the picture?

 

Unfortunately, not every lab will sell, as it will not meet the standard acid test of being a good acquisition.  If you want to be bought, it is important you are an attractive target for the companies to look at you.

 

It’s important to know your Key Performance Indicators (KPI’s) and what Normalized EBITDA is and how it is arrived at.  What affects the multiple and how will money be paid out?

 

Make sure you have good tax advice from a tax professional.  These are people who specialize in tax planning.  You also need a good reputable financial planner, and a good lawyer who has done business deals on a regular basis, not just dabbled in them occasionally.

 

We work with labs to help buy and sell them.  We work to make sure they can get a fair market value for their labs.  If they are buying, are they buying at a fair market price with good terms and a solid plan of transition and integration.

 

There is a lot to consider and plan for.  Whether you are buying or selling a lab, make sure you know all the details, so you can plan accordingly, before entering in to the sale or purchase of a lab.

 

For more information about our services and how we can help make you a suitable candidate for acquisition, or if you want to be an acquirer of labs but need a little assistance, please feel free to contact us at

info@approachmg.com.

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