Why Competition Will Help You Sell Your Surgery Center And Maximize Its Value

By Author: Christopher Wall
Total Articles: 3
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If competition brings out the best in people, why do some physician-owners of ambulatory surgery centers settle for less? When we are forced to compete we are forced to do a better job than we would otherwise do if there were no competition. The bar rises and we compete at a higher level. That's why I recommend ASC owners get their center in front of a large selection of competitive buyers.

More bids = better bids
Each buyer you speak with will come up with a different number based off of what is best for them. That's why ASC owners should never settle on negotiating with one buyer and limit themselves to whatever number that one buyer works up. Rather, they should request bids from multiple buyers and multiple buyer types.

As the offers come in, the whole group will be roughly distributed along the normal bell curve. That is, a few purchase proposals will be notably lower than the rest (a small number of bids toward the left side of the curve), most will be close together around the average (a large number of bids in the fat middle of the curve) and you will receive some that stick out higher than the rest ...
... of the pack (the right side of the curve).

But in order to see this phenomenon at work, you must start with a broad group of buyers. If you only get one offer, it could be the worst. If you only get two prices, they could both be on the low end of the curve, or one could be average and one would be low. In that case, you'd end up settling on an average price, and leaving a lot of money on the table. The only way to find who is offering you the best price and terms for your ASC is to compare that buyer's price against a broad population of other buyers. Statistically speaking, you have more certainty you're picking the premium price and terms if you're looking at a larger population of bids.

Value of multiple simultaneous bids
The interesting thing about soliciting multiple bids at one time is not only will you gain more knowledge about what your ASC is worth, but you will spur better offers from individual buyers as knowing other buyers are out there competing for your ASC will encourage potential buyers to put their best bid forward.

Competition itself shifts the entire normal curve of the solicited bids' distribution to the right, (toward higher prices). When a bidder thinks he's the only bidder, the lowest price in the distribution will be lower, the average price will be lower and the highest price will be lower than what you would see when where every bidder thinks he has to outbid the competition.

When a buyer approaches you, he will want to work with you one on one, in that mythical environment where he is the only bidder. But to maximize your opportunities, you should take his approach to be a signal of your ASC's desirability as a potential acquisition, and then you can leverage a broader population of bidders to your advantage.

Christopher J Wall helps healthcare providers meet their challenges. You can go ahead with his articles to gain knowledge about Surgery Center Turnaround and can get tips on Physician syndication, ASC Broker etc.