Selling a private practice is a huge task filled with emotional considerations, financial complexities, and logistical hurdles. A business represents years of hard work, dedication, and passion, making the prospect and process of selling a challenge. However, with the right strategies and mindset, you can overcome common obstacles and easily transition to the next chapter of your life. Here’s a basic guide to overcoming eight obstacles to selling your private practice. Knowing the value of your practice, finding the right buyer, and preparing your practice for sale will expedite the process and support your goals.
Determining your practice’s fair market value is the biggest hurdle in taking it to market. Most business owners have an emotional attachment to their practice, creating an inflated sense of its worth. Simultaneously, underestimating its value could lead to financial losses. Start by seeking out expert valuation services. The right firm can provide an opinion of value, or a comprehensive, nonpartisan assessment of your practice’s market value.
Knowing the value of your practice helps you enter negotiations with confidence. An opinion of value takes into account the business’s financials, intangible assets, and market trends to establish credibility and guide the selling process to a successful closing.
When you sell your house, you clean it up, repair things, and add a new coat of paint to make it more enticing. Likewise, selling your practice involves preparing it so it shows its best face, financially and operationally. Here are a few tips on how to do it:
Investing in small operational improvements, such as updating your website, refreshing software, and improving your branding, can present your practice in a more polished way to justify its price.
Finding the ideal buyer is its own challenge, and that person is not always whoever presents the highest offer. Find someone who shares the values and goals of your practice. Vetting buyers can be overwhelming, so here are a few simple strategies to expedite the process:
Naturally, the financial and legal aspects of selling a practice pose their own challenges. From contract negotiations to the tax aspects and angles, there’s plenty of fine print to work through. First-time sellers may be especially intimidated. Just take a deep breath, and keep the following suggestions in mind:
When you’re in uncharted territory, it’s best to hire an expert. Find and work with experienced financial and legal experts who specialize in business transactions. Their specialties include but are not limited to the following:
Consider the structure of the deal. This includes defining what occurs during and after the sale. Take time to understand the different deal structures and what each offers so that you can select one that will work best for you. This is another example of when it makes sense to hire an expert. An M&A expert, like a business broker, can provide invaluable professional advice, save you time, reduce your stress, and garner the best possible terms for the deal.
We’re all only human. It may be a business, but emotional attachment to the place you’ve built up, operated, and overseen is to be expected. Cherish the memories while controlling your emotions. Here are a few techniques on how to manage that sudden wave of grief, pride, anxiety, and other overwhelming feelings you may experience when selling your business.
Why are you putting your practice up for sale? Is it because of retirement, or do you have a new professional goal? Do you want to spend more time with friends and family? Maintain perspective by remembering all the good reasons for selling.
While planning for the sale, think about what you’ll do after the sale, too. Reduce feelings of loss and anxiety by looking to the future and planning what you’ll do when you get there.
Know anyone who’s gone through the process of selling their practice? They’ll have insights and suggestions on dealing with the progression. Talk to peers, mentors, fellow professionals, and advisors about what they did. Their encouragement helps you stay grounded, grants clarity, and reduces the number of surprises.
A business only works because of the people who run it and the clients they serve. Communication is the key to doing business, so keep the lines open between you, your staff, and your clientele. Effective communication alleviates concerns, maintains trust, and ensures goodwill. It also helps to retain staff and customers who are integral to the practice’s success while preparing them for what comes next. Here are the best approaches:
Thoughtfully managing this period of change preserves the trust and relationships you’ve built through the years.
Overcoming these eight obstacles to selling your private practice is a challenge. However, by addressing these issues, you experience a less-fraught sale. Need help with the future of your practice? Contact Private Practice Transitions today!