Preparing Your Practice for Sale, Part III

The Cathedral Group, Teton Range – 2022

Grand Teton National Park, WY

The Path

The  transition from your career involves a multitude of matters that require thoughtful, timely planning in order to experience a smooth and successful outcome. They include personal, professional and practice preparations…in that order. 

This article focuses on the critical first steps you should take prior to seeking a buyer of your practice.

The Big Picture…

The preparation of your practice for a sale is an unfamiliar process that is tedious and lengthy. It is easy to underestimate the time and effort that must be dedicated to this process which occurs simultaneously with the ongoing care of your patients. It is essential to evaluate your responsibilities, your staff’s and the time available to fulfill them. This will help you determine whether changes are needed in order to meet the challenges that lie ahead.

The preparations to present your practice to a prospective buyer presume that you have a successful, well-functioning practice that serves everyone affected well. However, there are times when this is not the case and identifiable concerns should be addressed early in the process.

With either scenario, a practice that is presently functioning well or has been optimized,  does not equate to being ready to present to a prospective buyer. The next focus of your attention is to shift into sale readiness mode.

Perspectives: Yours and the Buyer’s

Your perspective as a seller is different from that of a buyer, regardless of who it is. You have worked long and hard to develop your practice. It serves your patients, staff and yourself well. You have an abundance of reasons to be proud of your accomplishments as you progress through your transition. 

Nevertheless, a prospective buyer’s perspective is very different. It is essential for you to consider the prospective buyer as someone who must be able to appreciate the value and benefits of acquiring your practice with confidence. It is up to you to lead the preparations that will clearly convey these attributes in a manner that addresses the emotional element of a major purchase, as well as with well-organized data that support a financial investment.

The Next Step

You should anticipate a substantial and detailed request for information about your practice from a prospective buyer. The initial request is usually limited in scope that addresses key financial reports. After review, there may be ongoing interest that is expressed along with requests for much more extensive information.

It is important to emphasize that the amount of data and the time it takes to prepare it is often underestimated. For this reason, it may take weeks or months to reply even to limited data requests. This is a common occurrence that prospective buyers encounter. 

Therein lies one opportunity to distinguish yourself and your practice. 

How to Rise Above the Rest

In addition to the condition and value of your practice, a very valuable and practical way to distinguish yourself is to prepare, as completely as possible, a set of data that a prudent buyer will need to undertake due diligence. It should be ready to present upon request after the execution of a mutual non-disclosure agreement.

Beyond that readiness, you can expect requests for certain information you may not have prepared, mostly because you could not have anticipated it. So, prepare for what you can expect and thereby be more ready to adjust to the unexpected.

By taking these steps you will present yourself and your practice much more favorably beyond the basics of clinical practice.

Plan. Prepare. Prosper. _TM

Updated: Friday, May 31, 2024

PS: Would you like to learn more about how to transition from your practice? I would like to assist you. I provide practice transaction services that are tailored to your specific needs. Click here to request an introductory conversation.

If you would like to learn about another way that I can guide you, check out this brief video that describes my unique online course: 

 The Practice Transition Course for Physicians. _TM   

Gleaming Path – 2022

Grand Teton National Park, WY