Selling a business can be difficult. In fact, it may be one of the most difficult things you can take on as a business owner. According to one study,...
As a medical professional, you know the value of hard work. After those long years in medical school, passing your board exams, and finally becoming a certified physician, you successfully built an impressive practice. You’ve served countless patients and worked countless hours to provide the highest standard of care for those who trusted you with their medical needs, and now it’s time to enjoy the fruits of your labor.
But the truth is, selling your medical practice and retiring is not that easy. There’s a lot to consider! First, you have to determine whether your practice is actually ready to sell — it’s important to know how you’re going to transition out before you start the process!
Then, you need to find the right people. It’s important to have a team of people on your side, helping you through the sales process. You’re going to want some trusted advisors, lawyers, and partners on your team to help guide you along the way. And, of course, it’s important to find the right buyer for your unique practice!
Once you’ve found the right people, it’s time for your due diligence. As with any business, the buying and selling of medical practices comes with a fair amount of paperwork. It’s important to be prepared with the right documents to make sure your sale goes off without a hitch,
And finally, you can’t forget about your patients! They’re going to be sad to lose you as a trusted healthcare provider, so it’s essential to help them through your transition. Medical records need to be transferred — but only with patients’ permission, of course — and those in your care need to be alerted to the sale at just the right time to insure a smooth shift.
We know that sounds like a lot, but we at Sunbelt Atlanta are here to help. We’ll break down each part of the process and be with you every step of the way — from your first phone call to your final signature. We’re here to ensure you can successfully sell your medical practice and reap the rewards of your incredible medical career. So don’t worry! Let’s dive in and take a closer look at each part of the process — we’re certain that we can provide the clarity you need to proceed with confidence!
Wait a Minute! Are You Ready to Sell?
You’ve built an incredible legacy, and you’re ready to retire — we get it! But we also know that the last thing you want is for your practice to disappear and fall into mismanagement in your absence. That’s why it’s essential to make sure you’re truly ready to sell before you start bringing partners, lawyers, and potential buyers into the mix.
The truth is, you are your practice. Your name is the trusted source of revenue for your medical business — if you leave, that will certainly mean significant change for your business. Too often medical practices fall apart when they’re sold because the backbone of the practice — the physician — chooses to leave.
The good news, however, is that you can transition out of your leadership role and step away from your medical practice without leaving it unprepared. There are just a few things you need to do first:
Make Sure You’ve Built a Strong Business
Here’s the bottom line: If you’ve created a strong leadership structure in your medical practice, it will survive after you leave. If you haven’t, it won’t. That’s why it’s essential to ensure you’ve built a strong business capable of standing on its own.
Part of that process is ensuring that the practice will still have sure sources of revenue once you’ve left. If you are the only money-maker at your practice, investors and buyers won’t be very interested in taking on the practice without you. Take care to ensure that the doctor and surgeons who work within your practice are trusted by patients and proven revenue-earners — this will make your practice extremely attractive to potential buyers.
Maybe you’ve realized that your practice doesn’t necessarily have enough revenue-earners to be a financially attractive opportunity for buyers and investors. In that case, one exceptional strategy is the combine-to-grow method.
The combine-to-grow method is simple, but it requires a slight shift in your sales strategy. Instead of selling your practice to a buyer, you’ll first want to partner with other practices. Through merger or acquisition, you can join your practice with one or more others near you to create a larger, more valuable, and more attractive investment. Then, you have the opportunity to sell the larger conglomerate practice for a higher price and still walk away knowing that everything you’ve built will continue to thrive.
Don’t Forget Physical Assets!
In addition to having talented healthcare providers on your staff or within your conglomerate, having your own building will make your practice extremely attractive to potential buyers. By having a fully-leased property, you give yourself annuity for the future and the ability to sell for capital gain with up to a 20-30% return on your investment.
Don’t have the existing capital to purchase or lease a building for your practice? Again, this is where the combine-to-grow method can come into play. Consider merging your practice with one or more other practitioners. Join your capital together and invest in a physical premises for your joint practice – that way, you’ll be able to make even more money off the sale of your total combined practice.
If you’re not sure your practice is ready to stand on its own without your leadership, it may be necessary to take a step back, evaluate your situation, and take steps to better position yourself to be attractive to buyers. By joining with other practitioners and investing in a physical space in which to practice, you’re sure to make your practice highly marketable.
And if you’ve ensured that your medical practice is ready to continue operating without you, great! You’re in a perfect position to begin the sales process, which begins with gathering together all the right people…
Bring Together Your Team
As with any major business sale, when you go to sell your medical practice, you’re going to want the right people backing you up. However, it’s not as simple as finding one sales agent and a buyer and signing the deal. There are a few more people you’re going to want on your side through the process.
#1: Outside Consultant
It’s good advice — whenever you’re wading into unknown territory, it’s always a good idea to have a guide who has been there and done that before. Find a competent advisor or director who has been through the process of selling a medical practice before. They’ll be able to help you avoid common pitfalls and roadblocks along the way, and they’ll provide you with the advice and encouragement you need to earn the greatest reward for the sale of your practice.
Additionally, third-party advisors can offer you an impartial perspective. They’ll be able to give you sound financial advice unclouded by emotional attachment to your business, and that’s exactly what you need during a major sale! Seek out another retired healthcare professional who is capable of helping you through the sales process, or find a third-party advisor through your bank or creditor — you’ll be glad you had a helpful guide on your side!
If you already work with one or more partners, it’s only natural that they’ll need to be in-the-know about how, why, when, and to whom you’re selling your medical practice. If they’re equal partners in the practice, they’ll need to be on-board with you every step of the way. Make sure to have serious conversations with your business partners well in advance of taking any concrete steps — you don’t want to damage those long-term relationships!
And if you choose the combine-to-grow methodology, make sure your partners at the medical practices with which you are merging are also in the loop about your plan to sell the business. Remember to get everything in writing — you don’t want any last-minute disputes to unravel your smooth transition!
#3: Legal Team and Healthcare Business Broker
A good legal team must be an essential part of your group of advisors during the sale of your business! Your legal team can help you do everything from filling out the right forms to your due diligence to protecting you from fraud or other complications. Additionally, your lawyer will ensure you are in compliance with all healthcare laws and that your sale complies with laws concerning who can own and maintain controlling investments in medical practices.
Additionally, your healthcare business broker will be there to act as an intermediary to handle the “business” aspects of selling your medical business. A good broker will be efficient and have sufficient expertise to get you the maximum value for your business.
Your legal team and medical business broker will effectively handle the nuts and bolts of the actual transaction — that way, you can enjoy the ride! They’ll make sure you get what you deserve and additionally ensure that everything happens according to the standards of the law. A good legal team and broker are essential for any business sale!
At Sunbelt Atlanta, we’re committed to helping your sale run as smoothly as possible. Our team of legal experts is always ready to offer you top-quality legal advice. We know that selling a medical practice can seem like a daunting task, and we want to make the process as painless as possible so you can get to enjoying the fruits of your labor faster! If you’re ready to sell your medical practice, please reach out to us! We’d love to work with you.
#4: A Buyer!
We can’t forget the most critical person when it comes to selling your business — your buyer! When you’re trying to sell a medical business, it’s essential to find a buyer you trust to take over your leadership role. Look for trusted partners or other reputable healthcare officials — you want your successor to be someone who can take care of your patients as well as you did!
Remember, too, that when you market your practice to potential buyers, you may need to market to their families as well. This person could potentially need to move in order to take over your practice, so you’re going to want to sell them on the town, job availability, housing options, and school systems if they have children. Make sure that your buyer is the right fit for your practice and your community — this deal should be mutually beneficial for everyone involved.
Do Your Due Diligence
Once you have your team together, it’s time to start moving forward with the paperwork. Doing your due diligence can seem like a daunting task, and the truth is, it really is essential to have everything in order to prevent snags and slip-ups during your sale.
However, that doesn’t mean the process has to be painful! Let’s break down the most important steps you need to take in order to dot every ”i” and cross every “t” when selling your medical practice:
Have Your Practice Valued
This is where an excellent broker comes into play. It’s essential to have your business properly assessed and valued when you’re trying to sell it — that’s the only way to get the most value out of your sale. Find a trusted valuation firm (your broker can help you with this) to analyze your medical practice and determine a fair asking price.
Remember that the value of your practice doesn’t only include your physical assets, though those are important. Be sure to include the goodwill of your business, any business relationships, your existing patient list, cash and bank accounts, pension funds, insurance proceeds, any artwork or personal effects, and any intellectual property you own when calculating the total value — you want to make sure to be paid for everything you’re selling!
This is a big one — it’s essential to make sure there are no liabilities in healthcare compliance when you’re selling a medical practice. Be sure to go over the relevant medical law with your lawyer before putting your business on the market to ensure that your practice and your sale are all up to the standard of the law.
There are many laws regulating who can and can’t own and operate a medical practice — be sure that your buyer complies with legal guidelines. Additionally, there are many laws that dictate the processes for business referrals, bill submission to private insurers and public health programs, healthcare privacy, and a myriad of other issues. Be sure that your lawyer as well as your buyers’ have the opportunity to go over all compliance issues and address any red flags or complaints prior to finalizing the sale.
Now for everybody’s favorite part — documentation! There are many forms and documents relevant to your sale that you’ll need to compile, including:
- Non-disclosure and non-compete agreements
- Letter of intent
- Buy-sell agreement
- Consulting agreement
- Physician employment agreement
- Staff termination and transition letter
- Three years’ worth of tax statements and financial records
- Any relevant licenses and licensure requirements
We know it seems like a lot, but each one of these documents is essential to the legal completion of your sale. Thankfully, your business broker at Sunbelt Atlanta can help you with many of them! Buy-sell agreements and letters of intents from potential buyers and consulting agreements can all come through your broker, taking the stress off of you as you move forward with the sale.
Don’t Forget About Your Patients
As you’re going through this process, it’s important to think about your patients as well. They’re going through a transition right alongside you — they’re going to need time to adjust to the idea of seeing a new healthcare provider. It’s important to keep them in-the-loop and informed about the changes going on as you move away from the practice.
So make sure to let your patients know that you’re leaving at the right time. You want to make sure everything is final so that you can announce your departure and introduce your successor — you don’t want anyone to be caught off-guard!
Additionally, due to healthcare privacy laws, you’ll need to ensure your patients have given your successor access to their medical records. Ensure that you provide your patients about when they can pick up their records and where they need to send them if they’ll be moving to a new practice. And make sure that patients have the option to transfer their records from your practice to the new practice under a new name if necessary.
Your patients will be sad to see you go, so be sure to make the transition as smooth as possible!
Sunbelt Atlanta is Here to Help
At the end of the day, we know you want to be able to sit back, relax, and enjoy the rewards of your years of healthcare service. We understand! That’s why we at Sunbelt Atlanta are committed to helping your sale happen quickly and efficiently.
At Sunbelt Atlanta, we pride ourselves on our excellent business acumen, a track record of successful sales and client satisfaction, and over 70 years of collective experience. Our team of expert business brokers is always happy to work with you to get the most value for your medical practice. We understand that you’ve worked hard to make your practice what it is, and we want to make sure that when it’s time to sell, the process is painless and profitable!
If you’re interested in partnering with us to sell your medical practice, we’d love to hear from you! Send us an email or give us a phone call — you can find all of our information on the contact page on our website. And if you’d like to schedule a confidential discussion just to get the ball rolling, there’s a quick and easy contact form right on the homepage of our website.
We’ve been brokering business deals since 1979, and we’re confident that our service is unmatched. If you’re looking for the right manufacturing business broker to facilitate the sale of your business, look no further — Sunbelt Atlanta is here to help.
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