What you may not know about transitioning the management of your practice
Your practice is likely your largest financial asset, but do you treat it as such?
While we plan the transition with our current potential partners, we have found that many physicians have overlooked the strategic value of accessing equity in their practice.
It is never too early to understand your options and the value of your practice(s). In Canada, transitioning the management of a medical specialty practice is a new concept. To find support from peers, who may be able to guide you through the process, is rare. We have found the personal and financial benefit from understanding the value of what you have built is significant!
To inspire thought, we have identified some of the most common questions we hear from physicians. This is by no means an exhaustive list, but rather a place to start.
How do I know what my practice is worth?
There is a review and analysis of your current and historical financial performance, your current and historical production, team details, asset values, and geography of your practice to name a few. This helps determine a fair market value of your practice(s). We can most certainly help you with this, so please reach out if you would like to know the value of your clinic.
How do I know if it’s the right time?
The best time to sell your practice is when everything is going well, and you have a consistent financial history of stable or growing revenues. The worst time to sell your practice is when you are fatigued of ownership and the revenue have started to decline. Buyers will be nervous of an impending freefall.
How do I know if I am my ready to sell my practice?
This is a very personal decision, but it may be helpful to start by asking yourself the following.
• Is the management of the practice taking time away from other things that you value more?
• Do you feel stress when your manager reaches out a weekend, or during vacation, to solve a problem?
• Would you like to inject some cash into the business to help fuel growth now?
• Would you like to secure your financial future?
If you answered ‘yes’ to any of the above, it may be time to have a discussion. Send us a message!
How do I assure the legacy of my practice is maintained?
It is pivotal for you to identify that the buyer shares the same outlook on patient care and community involvement that you do. The cultural fit of the buyer will be the most important item to investigate when looking to sell your practice.
How do I assure my team has a stable future?
Be sure that the buyer has no layoff plans, or any plans to drastically change the operations of your practice. Through purchase negotiations, it is important for you to highlight what you are not willing to change, so the buyer does not force you into changing a culture that you have worked so hard to build.
What if you had a business partner that allows you to maintain clinical control of your practice, but at the same time injects cash into your business today?
Do you think that could help foster a smooth transition into the next phase of your career? If yes, then we need to talk.
Author: Michael Black, Chief Executive Officer, Specialty Medical Partners
