How far in advance should I begin planning for the sale of my practice?
It is a good idea to always keep your practice in a sale ready position regardless of where you are in your career lifecycle. Nobody has a guarantee as to the number of days they will have, so for emergency planning purposes you should have a practice appraisal on file with a trusted broker, sending the updated numbers every two years. This will make it possible for someone at any given time to quickly provide an appraisal of the practice which protects one of your most valuable investments. This could save your family at a time when they need it the most.
For optimal pre-retirement planning and positioning, my recommendation is to start three to five years before you actually want to begin transitioning your practice. This allows enough time to look constructively at the practice to determine the strengths and weaknesses. This will also give you the time you may need to improve the overhead expenses and work on the overall appeal of the practice. Compare your last year's expenses on your profit and loss statement with the normal averages for your area. If overhead is high look for areas to work on and enlist the help of your team in areas such as dental or office supplies. What is your new patient flow? How many active patients do you have? These are all questions that a potential buyer will ask. What is your practice "curb appeal?" This is not the time to do major renovations or purchase expensive new equipment but perhaps some fresh paint or new carpet? The idea here is to refresh the look and feel without breaking the bank.
It's important to exercise careful planning to set your practice on a course that will maximize appeal and value!
This article was written by Lynne Nelson co-founder of Practice Management Associates, LLC (206) 455-5388. For a no-charge consultation or questions regarding study club presentations, please call us! Copyright © 2018