Selling your practice can be one of the most emotional decisions you make. Maybe the practice gave you a start in medicine, but now you’re ready for a change. Perhaps your practice just isn’t thriving the way you’d like for it too, or maybe you’ve realized that running a practice just isn’t right for you. There’s no right or wrong reason to sell a practice, but rushing into a sale is a surefire bet for getting scammed, losing money, and potentially regretting your decision. If you’re ready to put your practice up for sale, be sure to take these important steps.
Get Your Practice Ready
If you were selling your house, you’d probably add a fresh coat of paint, check your home’s curb appeal, and fix any major structure issues. Your practice is no different from your home, aside, of course, from the fact that it is likely worth much more. Commit three to six months to get your practice ready to sell. This may include updating office décor, recruiting or retaining more patients, ensuring your health record system is secure, or changing the scope of your practice. Some doctors even solicit patient input to discern what might make their practice more appealing to patients – and therefore potential buyers – so don’t be afraid to put out comment cards or ask patients about their experience with your practice.
Get an Appraisal
An appraisal signals to potential buyers that you take the sale seriously. It also offers reassurance that the practice has real value. Be upfront with the appraiser about your practice and its history, and be sure to critically evaluate how potential liabilities – such as a disgruntled ex-employee or a patient who is badmouthing you all over the Internet – might affect the value of your practice.
Seek Multiple Bidders
Your options expand in direct proportion to the number of buyers who are interested in your practice. If you want to get the most money and have the best chances of selling your practice to someone who can run it as it’s meant to be run, you need to pursue multiple bidders. Many doctors recruit additional bidders by calling people they know may be interested in buying the practice. So don’t be afraid to get out there and market your life’s work. Old colleagues, up-and-coming new professionals, and anyone who has previously expressed an interest in running a practice, are all ideal targets.
Switch to Electronic Health Records
Paper records are a nightmare for people who are unfamiliar with your system, and they add no value to your practice. An electronic health record system, though, adds real value to your practice by making transitions easier and ensuring patient records are readily accessible. You don’t want the practice to flounder when you leave, but without clear patient records, that’s exactly what it will do. Spare yourself the misery of an angry buyer by joining the EHR revolution now, before you put your practice up for sale.
Plan for Two Sales
If you own both your practice and the building in which it operates, you need to prepare for two sales, not one. A practice management consultant is also a good idea, since how you choose to divvy up the sale can greatly affect its ultimate value. You have three basic options:
- Sell your building and your practice as one bundle deal. This works best when the buyer can pay upfront and truly loves the building. Otherwise, you may end up making less on both, since the buyer may prefer a different building or be more invested in the building than the practice.
- Sell your building and your practice separately. If you can’t find a taker for the building and practice together, take heart; you may actually be able to make more by selling the two separately. An accountant, for example, may love your office much more than the doctor you have in mind. And once you sell your office, your practice may be more affordable to doctors who otherwise thought they couldn’t afford to buy a practice, leading to a more lucrative sale and potentially more buyers.
Develop a Transition Plan
You can’t just sell your office and have a new doctor walk in and begin running things the next day. Transitions can take anywhere from a few weeks to many months, so it’s wise to develop a clear transition plan. Don’t forget to include your patients, who may feel blindsided if they walk in one day to find that you’re no longer there. Give your patients plenty of notice that your practice has been sold, and consider holding an open house at which they can meet the new practice owner and medical team.
Plan Your Own Future
You’ll probably need to stay on for some time after your replacement takes over ownership of the practice, so be sure your own compensation and benefits are covered in the transition agreement. And in the hustle and bustle of selling your practice, don’t forget about your career future. Many doctors sell and then opt to remain on-staff as physicians, so discuss this option with the practice owner well ahead of time. Then be prepared for an adjustment period, since giving up control and becoming an employee isn’t always easy after dedicating your life to building and running your own practice.