Consultant's Corner - Q&A with the Industry Experts
Question: What happens to a medical practice in a distress sale situation?
"Selling a medical practice in a distress sale situation is never easy. A distress sale may be caused by death, disability, or even a shareholder dispute. Our company receives 3-4 calls a month in this regard and it is often too late for us to act in these situations. It is essential to have a transition plan, and at the very least an appraisal report for the practice prepared well in advance. Having a practice valuation report provides a solid foundation and groundwork for your family to act in the event of crisis. Your medical practice is your identity and livelihood but it is also a community asset. Think of family, patients, & staff when planning for the future. When the actual distress event occurs it is critical for you or your family to act fast. The first priority is to stabilize the practice coverage with an associate or locum tenens. Next, evaluate all possible exit strategies which don't involve shutting the practice down. Closing the practice can be an expensive and difficult process so if there is another way to divest the practice it is usually much cleaner and easier for all parties involved. Lastly, don't go it alone. Find a set of professional advisors who can guide you. – Mo Majdi"