Thinking of Selling My Medical Practice – Frequently Asked Questions
When should I sell my medical practice?
Looking to sell your medical practice? Your decision to sell can be driven by a variety of factors: retirement, career change, lifestyle changes, or financial concerns. Your timing should be addressed in conjunction with your financial considerations when trying to obtain full value for the practice. Obviously, the ideal time to sell a practice is during a period of solid earnings. The value of your medical practice is largely driven by recent performance. Buyers and financing sources will look for consistency over the prior two to three year periods with additional emphasis placed on the last 6 months to 1 year. Planning for an exit strategy is therefore crucial, and growing and maintaining the practice in anticipation of an exit is important to maximizing potential value.
How much is my medical practice worth?
There are many factors to determine the value. Your medical practice’s value depends on many factors. In general one should obtain a professional appraisal, conducted by an expert in healthcare practice valuation. This type of assessment takes highly specific market factors and industry nuances into account. In choosing an appraiser for this purpose it is important to consider whether the appraiser uses sound principles and has a strong foundation in the realities of practice transactions occurring on the market. An appraisal is only as good as its ability to realistically reflect the value of the entity.
How long is the process to sell my medical practice?
Selling your medical practice is dependent on various factors. The most common aspects that come into play are: practice earnings, practice valuation, specialty, buyer demand, geographic area, and seller motivation. In general, six months to 1 year is a fair timeframe to consider for the complete lifecycle of a transaction. Hiring a knowledgeable consultant may be a major determinant of success in this process. The consultant may have the ability to anticipate potential challenges and diligently prepare an approach prior to marketing.
Why hire a medical broker or consultant to sell my medical practice and, why not sell the practice myself?
Much time and expense will be involved in trying to sell the practice yourself and this does not usually result in savings or a successful outcome. The decision to sell your practice is one of many steps in a complicated and emotional experience, coupled with the intricacies of a transaction process for which you may have limited prior experience in handling. Even well-seasoned practice owners may find that supervising the process themselves draws focus away from the management the practice, thus risking a decline in the very asset they are trying to obtain optimal value for. Working with a qualified medical broker and consulting firm can yield a much higher probability of obtaining maximum value for the practice. Medical brokers and consulting firms can expose the opportunity to a larger pool of potential buyers and can rigorously qualify candidates both professionally and financially. In addition, the expert guidance and assistance provided by a medical consultant can make for more effective negotiations and a streamlined and successful transaction. Sellers can also address the need for confidentiality more effectively when an intermediary is in place.
How do I choose a medical practice consultant?
It is vital to select a transition advisor who is knowledgeable about the nuances of selling healthcare practices and can gauge market realities when devising a selling strategy. A good medical consulting firm can provide an honest analysis upfront and provide reasonable expectations for selling the practice, making actual results more attainable within your given timeframe. It is important to work with someone who is committed to providing full service guidance from start to finish.
Have questions about buying or selling a medical practice?