Specialisation Pays Off: Brad Potter's Success in Selling Healthcare Related Practices
Specialisation Pays Off: Brad Potter's Success in Selling Healthcare Related Practices
For Brad Potter, a four-time winner of the National Specialist Broker of the Year Award & 2023 Business Broker of the year & Deal Maker of the year, finding a market and becoming an expert in that niche has been a formula for a success in the business broking world.
Brad grew up on a farm but realised that farming (and further studies) were not his forte, so as soon as he left school he moved to Perth. “Get a bank job” was the wise advice of his mother and he joined Westpac.
“I then worked with RAMS before becoming a finance broker for a couple of years,” continued Brad.
At this stage, Brad’s specialty began to select him. “I was approached by Medfin (medical finance specialists) to set up their Perth office. During that time, I met a business broker who mainly sold medical practices. Age and his health were working against him, so Medfin gave me an opportunity to help him out whilst still being employed, silly mistake for them as I soon realised this is something I would like to do long term and gave them notice..”
Ultimately, Brad became the brokerage owner, rebranded as The Healthlinc, and has built from there. “It’s certainly grown and just gets busier and busier every year. COVID keeps on giving for some reason,” Brad observed. “This year, will be another record year in business sales.”
With that volume, Brad has no desire to expand past his Western Australia borders.
He explained, “Originally, our licence restricted us to only selling in WA, but now we have national licencing, so I can sell Australia-wide, but I’ve got plenty of work to do here before that happens!”
What do you see as the advantages of specialising?
With Brad’s relentless focus on Western Australian Healthcare businesses, he obviously has a firm conviction on the advantages. He identifies five major benefits of specialising.
1. It clearly defines the market you’re playing in.
“You know who and where your potential sellers and buyers are. You know the current trends in the market and you can give sellers a realistic appraisal of the likely price and time frame for the sale,” explained Brad.
2. It is easier to become known in the industry.
Brad’s profile in the industry is a significant factor in his success. But this has only been achieved with considerable effort. “I go to most trade shows, speaking at some of them. I provide continuing education at seminars and information evenings, but I also sponsor golf days and similar events. I’m very active in the space. I aim to always be on the shopping list for buyers and sellers,” he commented.
”Because I specialise, I don’t have to spread myself thinly across a wide range of industries. This increases the effectiveness of my marketing efforts considerably,” continued Brad.
3. It expedites the listing process.
As a result of Brad’s high profile in the industry, “selecting” a broker to handle the sale is often a foregone conclusion. “Normally when I go and see a potential seller, it’s a matter of ‘When do you want to sell? OK, here’s what we’ll do and how we’ll do it. This will be my fee.’ I give them an expected time period for the sale and the ball’s rolling. I rarely have to sell me or my process as sellers know I can get the sale done,” said Brad.
4. It fosters stronger relationships.
Brad’s contact list is small (how small is confidential, but let’s say it’s an Excel spreadsheet small). This allows him to develop close relationships with buyers and sellers which would be impossible with a broader client base.
The strength of these relationships enables quick sales of all types of medical businesses. “Because I know both parties so well, I am able to make matches that work. I often receive 2 or 3 offers to purchase within days of listing,” explained Brad. “I wouldn’t be able to do that with a larger, diverse list.”
5. It allows you to be an expert in collecting relevant information.
”Because Healthcare businesses are so regulated, they keep detailed records on their (largely) standard computer systems. I generate my own reports from those systems to have the information I know a buyer will want. Often, the business owner does not know that information is available or how to retrieve it!” Brad confided. “This information is far more useful than the standard accounting reports relied on in other industries - but you need to know how to get it.”
The business structure of The Healthlinc
What business structure does it take to achieve the undoubted success of The Healthlinc? The answer may surprise.
Brad is a one-man band, a sole practitioner with no staff to train and supervise. A self- confessed control freak, Brad explained, “I do everything from preparing the information memorandums to adding listings to the website to business inspections to dealing with contracts and liaising with professional advisers - I do it all.”
The danger here is that the life/business balance could become skewed. Brad is aware of this and zealously guards time for his “outside” interests (mainly golf, tennis and hockey).
Wednesday mornings are devoted to golf, an arrangement his clients are aware of (and usually respect).
“Most business inspections by potential buyers of practices have to occur outside business hours,” Brad continued. “It’s not unusual for me to tell a client, ‘I’m playing tennis until 3 on Saturday, so we can do the inspection at 4’ and, in most cases, that works. I turn up in my tennis gear, we do the inspection and the offer is there on Monday morning.”
The combination of strong client relationships, Brad’s hands-on approach and extensive medical business experience means the due diligence process is rapid. This leads to a relatively quick settlement period; generally one happening each week. “Usually, it takes about six weeks from listing to settlement. Because I know both parties so well, contracts rarely fail to complete,” Brad explained.
As a business broker, Brad acknowledges that succession in this type of business structure is problematic and Brad intends to work towards a suitable plan over the next year. In the meantime, he is content with a business structure free of HR stress.
Industry changes for medical businesses
Brad has noticed a change in the demographics of the typical seller of medical businesses, with practice owners selling in their mid-50s/early 60s instead of late 60s/early 70s. He explains his theory on the reasons for this, “These business owners are seeing all their younger associates regularly touring Europe or skiing in Japan while they are left running the business. They’re now saying, ‘We can sell and work part-time with the lifestyle we want.’ So I’m seeing significant role reversals as principals become associates and associates stepping up to be principals.”
Corporate acquisition activity is still a feature, but it is a small portion of the business for Brad.
The overall demand for Healthcare businesses continues to be strong despite Australia’s current economic conditions. “It’s not unusual for me to receive four or five strong offers to purchase. Prices are rising which is a good, confident sign for us all,” Brad added.
In conclusion
Brad provides a classic case study in the power of specialising for a successful business brokerage. Whether the specialisation is the result of prior experience or a conscious decision to focus, the benefits can be significant if you specialise in a profitable niche.
On the other hand, Brad’s business structure may not suit all brokers and, when it comes to an exit strategy, Brad acknowledges he has some work to do.
There could be an exciting opportunity for someone to learn from a master in the near future - watch this space.
Tags: selling health care feature business broker
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