Get more than one bidder:
If you are considering selling your practice then you should consider the following tactic: Contact your most likely prospects to let them know that you are considering the sale of your practice, and wanted them to know about it before you sell. These are the 2 places/ people you want to reach out to first:
•Hospital(s): Let your key hospital administrator(s) know of your plans. They may be forming a group or may want to provide this practice to someone interested in practicing in the community. They may or may not be interested in your staying on as a salaried physician.
• Your competitors: Contact each group or solo practice in your specialty. Let them know of your plans. A likely buyer could be one of these practices that wishes to expand by bringing in a new physician to take over your practice.
If you own the practice facility, prepare for two sales:
Do you own your practice building or have ownership of your office space? If so, then you will now have two sales to make: the facility and the practice.
Here are your options:
- Sell the practice and sell the space. If the practice buyer is not interested in ownership of the facility, consider finding a buyer. This makes sense if you are not planning to remain in the community.
- Sell the practice and lease the space, with an option to buy at some future date (say five years). If the physician does not exercise the option, you can continue as a landlord or consider finding a buyer interested in investing in rentable space.
- Sell the practice and lease the space. This overcomes resistance to ownership at this time. This means that you are now the landlord. Following the sale, you could have your property in the hands of a property management company, who would collect rents and maintain the facility.
Remain as an employed physician:
Part of an agreement to purchase your practice may be the preference of the buyer (particularly in sales to hospitals) to have you remain at the practice as an employed physician.
There are now two negotiations to consider:
• The sale of the practice
• The employment agreement.
When the hospital becomes the owner of your practice, there is no guarantee that the future performance of the practice will provide you with the same rewards as when you were the owner. We have witnessed hospitals doing a weak job of billing and collections, resulting in reduced collections and weakened net revenues. We suggest negotiating for a compensation plan based on your performance not the performance of the new owners. The model for a fair compensation plan is one based on relative value units (RVUs).
CONTACT PRACTICE ADVISORS
Now that you have read some basic tips and things to consider you are ready to start your practice. After you have found a place that meets your needs you will still need to make on offer, secure financing, sign the practice sale agreement and lease, and complete the purchase. As you can see a lot of important factors go into this decision. Make sure you are being properly advised. Practice Advisors 360 is the nation’s leading dental advisory company. Contact us today at (844) 360-8360 or visit us online at practiceadvisors360.com