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Things To Consider When Selling Your Practice

THINGS TO CONSIDER WHEN SELLING YOUR PRACTICE

BY: GRASSI HEALTHCARE CONSULTING

If you are considering selling your practice in the near future, consider the following:

  1. Think about what you want as a seller. Make sure this is what you want and it is for the right reasons. 

  2. Do not jump at the first buyer. Consider all offers. It is not necessarily about the highest offer.

  3. Do not tell your employees too soon; wait until the end of negotiations. The merging group should be asking about keeping new employees. They may become angry, creating a hostile environment while jeopardizing patient volume.

  4. Obtain a fair market value from a qualified medical appraiser. Your accountants and/or healthcare attorney can recommend an appraiser. Appraisers can use various methods to value your practice. You may want more than one appraisal using different techniques-you should thoroughly understand the techniques.

  5. Keep the office up to date. The look and feel of an office goes a long way; updates do not have to be costly. 

  6. Have your trusted advisors, such as your accountant and attorney, help you with the process. 

  7. Utilize your accountant to discuss tax advantages/disadvantages.

  8. Your attorney should draft the sales transaction.

  9. Be specific with payments. Think about the consequences if the new buyer defaults: do you want the practice back?

  10. If you want items in your office, flag them prior to the appraisal. Make sure you document this well. 

  11. Does your sales agreement require a restrictive covenant?

  12. Sell while your practice is still financially sound-do not wait until the patient volume is depleted.

  13. Communicate your thoughts with the buyer and be flexible to finalize the sale efficiently. 

  14. Ensure you have met all of the state and local requirements regarding charts, IRS requirements for paperwork, etc. You might consider hiring a healthcare consultant. 

Over the past few years we have seen increasing activity in mergers and sales of physician practices as a result of the changing business environment. 

When approached with an opportunity, consider these items and utilize them to make the best decision for you, your family and your practice. 

For more information, please feel free to contact John Pellitteri, Partner & Healthcare Niche Practice Leader at (516) 336-2470 or via e-mail at jpellitteri@grassicpas.com.