Preparing To Sell Your Business

When opening a business, you rarely think about what will happen when you’re done with your business. Most of us just think, “I’ll retire, sell and make a good amount of money”. Besides, you’ve put in a lot the hard work, building a reputation, have a great patient base, so why wouldn’t someone pay top dollar? 

Well, unless you’re extremely lucky, or have put the time into developing an exit strategy, you may be in for a surprise. 

eRealign your Expectations. 

When considering the process of selling your business, you need to able to answer a few questions. Your thoughtful consideration and having answers in advance will help in your PITCHto prospective buyers:

P - Profitability.Serious buyers will want to know the numbers of the business, not the color of the walls or carpet. You need to be able to provide the total billable services of your practice, and how much was collected and that which remains uncollected. Therefore, have your books in order to prove your claims of profitability.  

I - Inventory. What will be included in the purchase? Everything from supplements to syringes, computers to furniture. What is included and what is the value of the items after their depreciation. Include your debts, lease commitments, and other negative revenue inventory items.

T - Timing.Knowing when you want to sell, helps facilitate the sale. Urgent sales will undercut the price, while being patient may yield higher bids. Either way, it’s best to start thinking ahead of time when you’d like to sell and under what conditions that provide you with the most advantage. 

C - Clients. You'll need to be able to identify clients who are reoccurring visits, one-timers and those who are dormant within your database. Further, identity who are insurance and cash-pay users within each silo. And for clients with insurance, it will be important to know the breakdown of insurance types (e.g. BCBS, Medicare, TriCare, HMO, etc…). Be prepared to provide patient demographics, so buyers can evaluate the investment sustainability (i.e. an aging patient base shows a shorter life-cycle of the business if younger patients are not on the books).

H - Hand-Off. What will your involvement be during and after the sale? Some sellers want to sell and be done, others want to stay on as employees. know that some buyers may be interested in you staying around and helping smooth patient transition so their investment is more secure. What you're willing to do afterward is a question you need to consider before listing the practice.

Luckily, there are investment groups, and brokers, that specialize in the buying and selling of medical practices. This doesn’t mean you should pick the first one that pops up on Google, but there are resources in the marketplace. Do your homework, do the research and prepare in advance for this life transition. You'll be glad you did.