Deciding to sell your medical practice can be challenging. Sometimes, the choice to sell is a means to an end. Other times, it can open doors to new opportunities and endeavors. Why, how and when to sell are essential factors to consider when regarding something you worked so hard to obtain.
Why to Sell
There are numerous reasons why doctors would choose to sell their medical practices. Age is the most common facet in the decision. Around 43% of physicians are ages 55 and up. Creating a seamless transition for the team as they near retirement is a leading factor in the decision to sell their practice.
Accelerating price growth and administrative burden are other determinants in the decision-making process. Also, consolidating practices takes a big chunk of time and investment — although partners can offer additional capital for new equipment, buildings and services.
Running a practice takes time and effort that could be better spent on patients and family. Some physicians choose to sell because the administrative burden is too great and they wish to simplify their lives.
How to Sell
If you are considering or planning to retire, selling your medical practice might be a good idea. There are many factors to view once you have decided to do so. Perhaps you should consider consolidating your operation if you aren’t ready to sell. Doing this allows you to partner with a company that will continue to grow your business. You trust someone else to run things the way you want.
Knowing what you want to retain in your business is essential before searching for a partner. If keeping the name of your practice is important to you, make sure the partner you choose is on board before you go any further. Consolidating can serve as a start to formulating your exit strategy.
When to Sell
While age is a common factor in deciding to sell a medical practice, so are burnout and competition. It’s crucial not to wait until the point of exhaustion to begin the process of planning to sell.
Succession planning is a way to plan your withdrawal from your business. It helps you balance your interests personally and professionally and eases the transition for your team and practice. Succession planning also helps your facility remain sustainable. Choosing someone to hand the reins over to can be emotionally draining. You might have an extremely difficult decision to make and should ensure your patients and practice are taken care of. Go with your gut to ensure you’ve done everything in your power to make that happen.
It is best to plan to sell your practice a few years in advance so everything goes smoothly. There are a few ways you can get the ball rolling to prepare for the process of selling. Most interested buyers require three years of financial statements and tax returns, so get a good accountant to help with this. Reduce your payroll by cutting overtime and reducing staffing levels. Code everything and be strict with your spending and accounts. Then, you can begin your search for a buyer.
Time to Sell
Selling your practice can be difficult, but it’s much better than simply walking away from something you built. If you create a succession plan and sell, you are entitled to much more time to spend on your patients or leisure activities.
If you play your cards right, you could walk away with a nice chunk of change. Your financial obligations decrease when you sell, leading to greater peace of mind. Put an exit strategy in place to make the process an easy one.
Devin Partida writes about investor technologies, big data and apps. She is also the Editor-in-Chief of ReHack.com.