When Should You Sell Your Medical Practice?
When you are deciding on when to sell your practice, you are typically driven by a variety of factors: retirement, career change, lifestyle changes, or financial concerns. The timing of your decision should be in line with your financial considerations especially when you’re trying to obtain the full value for the practice. Obviously, the ideal time to sell a practice is during a period of solid earnings. Keep in mind that the value of your medical practice is largely driven by its recent performance. Buyers and financing sources will look for consistency over the prior two to three year periods with additional emphasis placed on the last 6 months to 1 year. Planning your exit strategy from the practice is therefore crucial, and requires growing and maintaining the practice with the anticipation of an exit is important to maximizing potential value.
How Much is Your Medical Practice Worth?
When it comes to determining the value of your practice there are several factors to consider. First you will want to obtain a professional appraisal of your business, conducted by an expert in healthcare practice valuation. This type of assessment will take into account some very specific market factors needed for an accurate appraisal. When you are choosing an appraiser it is important to consider whether the they use sound principles and has a strong foundation in the realities of practice transactions occurring in the current market. An appraisal is only as good as its ability to realistically reflect the value of the entity.
How Long Is The Process To Sell Your Medical Practice?
Selling your medical practice is dependent on various factors. Some of the most common aspects are: practice earnings, practice valuation, specialty, buyer demand, geographic area, and seller motivation. Even though everyone’s timeline will be different the general time is typically six months to 1 year. This is a fair timeframe to consider when it comes to the complete lifecycle of the transaction. If you decide to hire a knowledgeable consultant, it can be a major determinant when it comes to the success of the process. The consultant you hire might have the ability to anticipate any potential challenges and be able to diligently prepare an approach prior to marketing.
Why Hire a Medical Broker or Consultant To Sell Your Medical Practice And, Why Not Sell The Practice Yourself?
The amount of time and expenses that come with selling your practice yourself does not usually result in savings or a successful outcome. Making the decision to sell your practice is just one of many steps in a complicated and emotional experience. This process is coupled with an intricate transaction process that you may have a limited amount of experience handling. Even the well-seasoned practice owner can find that the process of supervising the sell themselves eventually draws focus away from the day to day management of the practice. This can risk a decline in the very asset they are trying to obtain optimal value for. Working with a qualified medical broker and consulting firm can yield a much higher probability of obtaining maximum value for the practice. Medical brokers and consulting firms can expose the opportunity to a larger pool of potential buyers and can rigorously qualify candidates both professionally and financially. In addition, the expert guidance and assistance provided by a medical consultant can make for more effective negotiations and a streamlined and successful transaction. Sellers can also address the need for confidentiality more effectively when an intermediary is in place.
How To Choose A Medical Practice Consultant?
It is vital to select a transition advisor who is knowledgeable about the nuances of selling healthcare practices. They should be able to gauge market realities when devising a selling strategy. A good medical consulting firm is able to provide an honest analysis upfront and provide reasonable expectations for selling the practice, making actual results more attainable within your given timeframe. It is important to work with someone who is committed to providing full service guidance from start to finish.