Selling a practice:
Are you thinking about selling your practice? You might be planning to retire, slow down your career, or be moving out of state. As with any type of practice change, it’s smart to think ahead and plan for a smooth transition. Here are four things to keep in mind before selling a practice:
1. Keep revenue constant
Buyers will need to look at your revenue, equipment upgrades, and overall upkeep of the practice. The most important aspect is revenue. As you near the later years of your career, you may have tendency to cut back on your hours and relax a little more. But this can be risky because as your revenue drops, so too will the value of your practice.
If you are able to you should keep your revenue constant—and if possible have them grow a little bit— then there’s a chance you’ll put a few extra dollars in your pocket.
In addition, find a balance between keeping your practice in shape. You’ll want to plan ahead to ensure you have no outstanding debt when you’re ready to sell. A buyer doesn’t want your debt plus interest on top of the loan he or she will need to buy your practice.
2. The Upkeep of The Practice
Just like selling a home you want to make sure that your practice is in tip top shape. Do you need a fresh coat of paint? Does your practice give off a warm and welcoming feel? This is very similar to staging a home to sell: Even if potential buyers plan to make the practice their own, you want them to feel invited and excited when they see your offices. Replace the worn-out carpet and outdated furniture.
3. Find a buyer
To find a buyer, put the word out to state optometric associations and optometry schools that you’re preparing to sell. But again, planning ahead is key. You want to sell when your practice is at its best. That might seem like a weird strategy but the value of your practice will be higher and you are likely to have more buyers. No one wants to buy a failing practice.
So even if you planned on retiring at 60, but are currently 54 and your practice is hitting peak performance, then you might consider selling earlier than you expected. Waiting those extra 6 years could be risky.
Once you have decided to sell you need to put feelers out there that you are wanting to sell. It could take longer then you expected or be a quick thing.
4. Determine an exit strategy.
Whether you plan to sell and continue to work or sell and retire, you need to plan ahead. Consider what you want and then do the math. You may want to continue to see patients, which could earn you about $500 a day. However, you need to make sure a potential buyer is on board with that—you’ll be taking away from that doctor’s income.
Also consider whether you need to keep working primarily for the health insurance or until you qualify for Medicare.
Unfortunately, not all practices find a buyer, and a doctor may be forced to shut down the office. To best prepare for an office shutdown, doctors must make plans for maintaining their patient records, and they must notify patients where to access their records. If doctors do not want the burden of holding onto the records themselves, they should find a custodian for their patient records. A colleague in your community may agree to become custodian in exchange for being able to take on all your patients and market to them.
As you build your optometry career, plan at least three to five years out. Continue to ask yourself: Where do I want to go in my career? And following in the wise words of Dr. Ellis’ dad: Are you planning now so you’ll thrive later?
Learn More about Selling Your Practice
Hiring important employees is just one step to opening a new optometry practice. Now that you have read some basic tips and things to consider you are ready to start a 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