Someone might want to sell their private practice after many years at the wheel. Whether it’s a doctor’s, vet’s, attorney’s, or accounting, it might feel like the time is right to sell, change careers, retire, or seek a new challenge. Whatever the case, selling a private practice is a big decision that can come with mixed emotions and a passel of financial considerations. One thing is for sure: you want to get the best possible price. To be clear, it’s best to seek the services of a professional who has sold other practices before, but the following should give you a few things to do and think about while proceeding. Here are five steps to get the best price for your private practice.
Understand Your Practice’s Value
Don’t sell yourself, or your practice, short! Determine the true value of your practice by engaging with a professional appraiser or broker. They’ll look at revenue, your client base, location, and market trends. Keeping this value in mind prepares you for later negotiations. It’s also good for your confidence to know how strong an offering for your business is.
Highlight Your Key Strengths
Buyers are always more interested in a business with substantial potential. “Fixer-uppers” aren’t very attractive to most buyers, and they don’t draw that top dollar. Highlight the unique strengths of your practice in the presentation. For instance, a loyal clientele, regular and consistent revenue, strong branding, and a talented staff are great selling points. Think about it this way: A well-oiled machine looks better than one springing leaks!
Organize Your Financial Records
An organized financial history forms the backbone of any private practice sale. Being transparent and thorough with potential buyers builds trust and expedites the selling process. Compile financial reports, profit and loss statements, revenue trends, and expense breakdowns for the last three to five years.
Address Barriers to Growth
Don’t leave your practice’s problems for the next owner to solve. Find and eliminate weak areas, inefficiencies, and murkiness. Define staff roles, and bolster your marketing efforts if they seem lackluster. Generally, address any challenges that keep your practice from appearing competent and growth-oriented.
Prepare for Due Diligence
Put on your best face, and be aware that the buyer and their agents will look at everything with a magnifying glass. Be fully transparent, and prepare all licenses, legal documents, insurance policies, and paperwork in advance. Preparation creates confidence in your buyers, reassuring them there won’t be any surprises.
With these five steps, you can get the best price for your private practice. Selling your private practice can feel overwhelming, but you’ll have a smooth transition of your legacy. Start planning today to reap the rewards tomorrow!
Private practice owners sell their practices for various reasons, so these questions may help you understand the purpose of your sale:
- What are your reasons for selling, and why sell yours now?
- How can sellers identify their practice’s unique selling points?
- What challenges may arise during the due diligence phase?
- What legal preparations might be essential before listing a practice for sale?
- How does branding influence the price of a private practice?
