1. Bringing buyers and sellers together in the health industry
Specialist Business
Brokers & Consultants
In my view
www.thehealthlinc.com.auEdition 1, 2016
W
elcome
to our
mid-year
newsletter, one
in which I have to
say that it’s been
a busy time for
me as sales have
been strong with solid demand for
businesses in the health industry.
So what’s behind this strong demand?
I’m finding that people are not
particularly interested in setting up
brand new practices when they can
simply buy an existing one instead, as
you can read about elsewhere in this
edition.
Newcomers to the industry are still
being lured by the promise of a
guaranteed revenue stream from
Preferred Provider dental practices
and are showing a definite preference
for them.
With Health Funds now putting the
brakes on appointing new Preferred
Providers, and reducing rebates on
certain item codes, it has certainly
put the industry into a spin. Strong
prices are being paid for them - even
though they may not be the most
profitable practice.
I’ve previously expressed my views
that I think it’s a detrimental trend to
the industry and its practitioners. It
leaves Preferred Provider practices
exposed to the prices set by the
health funds. I guess you live with that
or become an independent practice.
I hope you find your newsletter
interesting and informative.
Brad Potter, Principal
H
ow time flies. It was 20 years ago
when Health Linc’s founder, Brad
Potter was introduced to working
with practitioners in the medical industry.
Brad joined Allied Finance in 1996 which
among other industries provided finance for
the dental industry.
Brad found this a particularly interesting field
in which to specialise, with the result that two
years later he was head-hunted by Medfin to
set up its WA office, specialising in providing
finance for the Health Care Industry.
“I found myself really enjoying the work.
Medical people are great people to work
with and as a result I stayed in this area until
2008 when I decided to join Martin Harris &
Associates as a specialist medical industry
business broker.
Brad subsequently established The Health
Linc in 2010, and a year later launched this
Health Linc Report as a service for keeping
practice owners up to date with the level
of demand and the strength of prices for
practices - as well as giving advice for those
interested in retiring from or selling their
practice.
Numerous awards
Going well beyond simply being a brokerage
service has had its rewards as Brad has won
‘Business Broker of the Year’titles in 2011,
2012, 2013, 2014 and was runner up in 2015.
Being recognised as an expert in his field,
Brad accepted an invitation to be on the
Committees of the Australian Institute of
Business Brokers (currently its President) and
on the Department of Commerce, Property
Investment Advisory Committee.
Brad says the secret to him winning the
‘Broker of the Year’title so many times relates
to several key aspects.
“Firstly, I really do care about my clients
receiving adequate reward for their years
spent in establishing and working their
practices. I guess this is my emotional
involvement in the business.
Smooth transitions
“Secondly, there is an art to finessing business
transactions. With more than 120 practice
sales under our belt we’ve developed systems
and processes that ensure smooth transitions.
Over the years we’ve developed a high level
of expertise in this”.
The consequence is that The Health Linc
has achieved sales for dental and medical
practices ranging in price from $20,000 to
$4.5million.
It doesn’t matter how big or small the practice
is, The Health Linc always aims to ensure a
unique balance is maintained in achieving
sales success:
• We recognise our client’s emotional
involvement linked with the transition
• We always aim to achieve the best possible
result for our client as reward for his/her
efforts
• We always maintain integrity in the selling
process while at the same time maintaining
a level of excitement in the purchase for the
purchaser.
It’s an interesting balance that requires a high
level of expertise and it’s one we look forward
to continuing in the years ahead.
Health Linc’s roots in
the medical industry
reach a second decade

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www.thehealthlinc.com.au
Selling your practice is personal
AHHA - ‘2016 Budget
underwhelming’
S
elling your dental or medical
practice is a lot more complex
than simply asking your
accountant to crunch the numbers and
getting the presentation right.
You’ve invested a lot of time and effort
into your business and there are some
very personal issues at stake.
You need to take stock of what’s going
to happen while the ownership’s being
transferred and where you want to be
once it’s changed hands.
There’s no getting around the fact that
you may have a surprisingly strong
emotional attachment to your practice and patients.
With that in mind, you may need to interview prospective buyers
to ensure they’ll be treating your patients with the care they
deserve.
Early preparation for life after
the sale may also make the
break easier to deal with.
Advance planning is important
in a number of areas: Will the
sale of your business provide
enough for your retirement?
Have you considered the tax
implications and what happens
if the practice’s equipment sells
for more than its depreciated
value?
Rather than stressing over this,
take the time to speak to your
accountant and your medical specialist business broker.
But don’t forget your family, because you really need to spend
a lot of time with them as you plan for life after the sale of your
Practice.
T
he 2016 Budget has left the
Australian Healthcare and
Hospitals Association (AHHA)
feeling distinctly underwhelmed, with
Chief Executive Alison Verhoeven
describing it as a disappointing result
for the health sector.
While welcoming an extra $2.9 billion over
three years in public hospital funding she
noted that it returned less than half the
funding removed in 2014.
“Action is needed to align the interfaces
between health, aged care and disability
services to help coordinate patient care,”Ms
Verhoeven said.
“Primary Health Networks require
appropriate and long-term funding to
carry out their core functions, with flexible
funding to meet community needs,”she
said.
She added that private health insurance
reforms had been“kicked down the road”
and cleaning up the Medicare Benefits
Schedule has amounted only to minimal
savings and some attention to achieving
better compliance by providers.
She welcomed the Child and Adult Public
Dental Scheme but said the funding wasn’t
sufficient to underpin equitable access to
care.
Buying established can be
better than starting up
W
hile many medical
practitioners think about
setting up their own practices
there are some very good reasons why,
after thinking long and hard about it,
they opt for an established business
instead.
Here are some of the reasons buying an
established practice makes sense:
• Finding suitable locations can be
quite a challenge.
• Meeting Council requirements
about parking limitations and
restrictions on such things as
the number of doctors allowed
in the practice can be a painful
experience.
• Buying a well-established
business is infinitely less stressful
than starting from scratch.
• You have the reassurance of cash
flow from the start.
• You avoid the huge cost of
equipping a new practice, which
can be as much as $3,000/m2 for
a dental practice.
• You know how much you have
to invest with an established
practice.
• The daunting task of negotiating
the lease is avoided when you
buy an existing practice.
Thinking of a
change or an
Exit Strategy?
Building a great practice one patient at
a time doesn’t happen over-night. We
understand that.
We also understand that dentists involved
in expanding their practice sometimes
want a break from the day-to-day running
of the business, so they can focus on what
they love – providing exceptional patient
care.
If you are passionate about your practice,
and would like to work with a team to
support you while you do what you do
best, or you want a partner to look after
elements of the practice you’d prefer not
to do, then talk with The Health Linc.
Call us to discuss options. We may be able
to help you.