Sponsored by TUSK Practice Sales
A growing demand in the medical aesthetic space has fostered a need among practice buyers and sellers – assistance when considering practice mergers and/or sales. Sometimes this is not just a gap of knowledge and experience, but a difference in perspective.
“Kevin Cumbus, founder and president of TUSK – a premier healthcare mergers and acquisitions advisory firm in Charlotte, N.C. – was in investment banking and the private equity world when he helped sell his father’s practice. He realized very quickly that there was a massive chasm between buyers and sellers,” said Josh Swearingen, director of practice sales at TUSK.
“On the one end are the buyers, mostly highly educated and private equity driven businesspeople. On the other are clinicians whose primary focus is patient care. Even savvy physicians may not know nearly as much as they should. So, what translates into ‘value’ to a buyer? Many sellers are not as aware as they should be, which is where we come in,” continued Mr. Swearingen.
Use of technology plays a key role. “Clinical excellence and convenience through technology starts with the practice’s array of leading-edge treatments and devices being successfully utilized by well-trained personnel, but it ends in the little things,” explained Mr. Swearingen. “Business management software, in-office information technology that works together seamlessly, mobile apps, and scheduled communications like text and email patient reminders are also important. All of these help shape an important perception about the viability of the practice in the modern market.
“The potential for long-term, replicable revenue is also very important, and higher than it used to be in aesthetic medicine,” Mr. Swearingen added. “The growing patient base – and demand for services – is coupled with drivers for repeat business in injectables, maintenance, total health therapies and more.”
Lastly, a key value consideration is patient loyalty and anything that encourages it. “Branding, robust membership programs that offer consumer value and drive increased revenue, a welcoming office environment, and the like are important but not so much as the intangibles demonstrated by solid, relationship-based medicine where the patient feels like a person, not a transaction.”
One key issue: Does a practice’s overall value and success hinge on one crucial individual? “If a buyer is thinking of investing millions of dollars, the proposition is riskier if concentrated in the performance of a specific owner, injector, physician, employee or whoever. Especially if a practice is older and not necessarily up to date with business protocols and technology, and/or has a minimal online/social media presence with a patient base that is aging out,” Mr. Swearingen clarified. “A good solid business, relatively equally spread across five or six providers, will easily survive losing one of those providers, for example.
“TUSK, which was originally focused on dental practices, has successfully closed that gap between buyers and sellers,” said Mr. Swearingen. “Whether dental or aesthetic medicine it is the same group of buyers, same vernacular and same process valuation standards. Transitioning to the medical aesthetic space was not only a natural progression, but a relatively easy one. There are significant similarities in office management, billing and mechanism of care, among others. The hardest part is building relationships with the buyers, which we already have.”
