You’re looking to sell your practice. Maybe you’re retiring. Maybe the hospital has given you an offer you can’t refuse. No matter why you want to sell your practice, there are certain aspects of the sale you should be aware of before buyers are sending offers your way. Selling your practice is a big commitment, and we want to make sure you have each aspect of the sale covered. Here are 6 tips on how to sell your practice.
1. Have an Online Presence
Before you consider selling, make sure your website and social media accounts are updated regularly. On your website, have educational tools and online forms for your patients to fill out before they enter your practice. For the younger generations, keep Facebook and Twitter updated with deals, contests, or funny posts at least once a week, if not more. For yourself, stay connected on LinkedIn with other medical professionals; some might have been through the selling process you are going through now.
By focusing on the online presence now, you can increase the value of your practice later. Buyers want to see some sort of marketing through social media and the Internet. Other marketing opportunities, like billboards and radio/TV ads, can also improve your value to the buyer. If you can’t find someone in-house, hire a professional to help you with your marketing needs.
2. Update Your Office
Even though you’re thinking about selling your practice, update the office before the buyers come in. Make all the necessary changes to your practice, like putting up art on the walls, or creating a safe place for kids. By updating your physical space, your potential buyers will appreciate your efforts in creating an inviting space for patients and employees.
3. Accumulate All Financial Records
Buyers will want proof that your practice is making money. They want to see if your practice is worth the investment. Provide the buyers with all of your financial statements for the past three years. These include your tax returns, balance sheets, and a “LTM,” which is a profit-and-loss statement from the last twelve months. If your statements are detailed, buyers will be more confident; they will have all the information available to make a decision.
4. Read Everything
In the selling process, there will be many contracts and agreements to read. Before you put the pen to the paper, read the entire document. Don’t miss out on important details because you didn’t want to read the 20-page document. For instance, in most cases, there might be non-compete clauses written in the contract, where the hospital (or buyer) won’t let you go back to being a private practice — and take your patients with you.
To make sure you have read everything, hire a lawyer. Good lawyers will help represent your side of the contract. Even though lawyers will cost you a little now, the good lawyers will help increase your value later.
5. Ask Questions
During the process, ask questions to your potential buyers. Will you manage more employees or less than you were before? How much responsibility are you willing to take, once the sale takes place? What will happen to your existing staff? How much money will you make?
Remember: there are two sides to every sale. Write your needs down first, then take your buyer’s needs into consideration. Again, a good lawyer or mediator can help negotiate a fair contract for both parties.
6. Keep Doing Awesome Business
There are three ways buyers value a certain practice: tangible assets, like office equipment and furniture; accounts receivable, or all revenue owed to the practice at the time of sale; and goodwill, like the practice’s reputation and their revenue potential. Most sellers forget about the value of goodwill and focus on assets and revenue. Goodwill is important, especially for buyers who have multiple options.
Keep smiling, let your patients know you care, and keep your employees motivated and energized. By improving your likability and fostering goodwill for everyone, you can create more value for your practice.
These are the 6 tips on how to sell your practice. If you need help with updating your practice for potential buyers, contact us at Antham Construction. We specialize in renovating dental offices, medical practices, optometry offices, and more.