Thinking about selling your practice on your own? You may want to think twice about this type of endeavor. Successfully selling a practice requires an entirely different type of skill set than practicing medicine. You may have achieved great success building your practice, mentoring associates and cementing patient relationships, but actually selling a practice is entirely different.
During the negotiation and execution of transfer of ownership, there are quite a few issues that can arise that are different from the issues that confront doctors on a day-to-day basis. That's where an experienced practice sales professional comes in. When it's time to sell, a practice broker who specializes in working with doctors can help you prep your practice so you can get the maximum price for it.
Your practice may just be your most valuable asset. A knowledgeable practice broker, like 1st Med Transitions, can help you get the most value for it. Most practicing doctors just have not gone through enough transitions themselves to fully understand the arduous courtships and rituals occurring between buyers and sellers.
STEP #1 Creating Competition
The main benefit of working with an established practice broker like 1st Med Transitions is that we can do what few sellers can do for themselves. We have a continually growing buyers list which we use to generate immediate interest in your practice before we ever offer it on the open market. We can line up buyers ahead of your "open house" if we choose to have one. Think about it... What if you can have 25, 50 potential buyers, in some cases more - in the space of a few days visit the practice? Well, this compresses the timeline and forces the buyers to bid against each other to buy the practice. We create the competition! This controlled auction scenario leads to visible competition forcing the buyer to act quick.
There are however a few steps that we must take before reaching out to any buyers. We must prepare the practice for due diligence, pre-qualify the practice for third party financing and create our confidential Practice Offering Memo. This will educate potential buyers on the history, production, procedures and historical financial's. If you do not have all of these pieces together, than buyers can not act quickly and your listing may go stale.
STEP #2 Due Diligence
Sourcing potential buyers is just the beginning. You also want to make sure any buyers you are taking time to visit with are legitimately qualified to buy your practice. The last thing you want to be doing is dealing with buyer's who can't afford the asking price and who can not qualify for financing.
With our team having closed over $100 Million in financed practice transactions, we know how to qualify a potential buyer and perhaps more importantly, what type of financing they can qualify for. Are they creditworthy? Will the doctor qualify for 100% financing? Will a down payment be required? Or will a seller hold-back note be required? These are invaluable resources to consider during the negotiation process.
Do you have the time to conduct this type of due diligence on each and every potential buyer? Or a better question... Do you have the know-how or desire to do so? A practice broker like 1st Med Transitions will take care of the necessary due diligence process, saving you a ton of time and headache. Also, most of the time a buyer will balk at a request from a seller to release this type of personal information before he knows if he is ready to make an offer. As a practice broker, we control who can visit the practice or not. Buyers think of a request like this as part of the process.
STEP #3 Qualifying Buyers & Maintaining Confidentiality
Practice brokers understand that time is valuable and sellers do not want to waste it with unqualified buyers. Neither do we. Experienced practice brokers, like 1st Med Transitions, have a system for committing the buyer to a confidentiality agreement, and ensuring that the buyer is financially capable of closing on the practice before a site visit is set.
Confidentiality can be the most important item of concern when selling a practice. Most sellers do not want to alert employees, patients, vendors or competitors that their practice is for sale. A strongly worded Confidentiality Agreement stresses the importance of this requirement.
A good practice broker will force prospective buyers to execute a confidentiality agreement right from the get go. They must also provide asset and pre-qualified financing information before the discussion can continue.
The result of a good Confidentiality Agreement and Pre-Screen process is a lot of time and money saved for the seller.
STEP #4 Controlling Bids & Negotiations
During negotiations, tensions can run high for both buyer and seller. The role of the practice broker is to ease the stress of heated communications between buyer and seller. The benefit of a calm intermediary can alone save a transaction from falling apart. This is the last thing either party will want and now, will have to start their searches over again.
STEP #5 Using a Industry Specialist
Selling a medical practice is a lot different from selling a restaurant or daycare. Most general business brokers get lost when they try to broker medical practices. Their reach is just not sufficient enough to generate the amount of interest needed to obtain the best offer for your practice. A Medical Industry Specialist, like 1st Med Transitions, has been in the business of talking specifically to doctors and companies that acquire them, for decades. Our direct industry contact list offers great value to our sellers.
There are also industry specific regulations, goodwill, representation and warranties, non-compete and valuation considerations that are very difficult for brokers who do not have the industry knowledge to understand.
STEP #6 To Broker Or Not To Broker
In summary, a doctor can definitely sell a practice by himself or herself, but will they get the most value for it? Do they have the time and effort available to focus on continuing to run their practice and sell their practice? This is a question any doctor seriously looking to sell their practice has to weigh for themselves.
A good practice broker like 1st Med Transitions can take the weight of the sale off your shoulders and add value to the process. Most time, they will earn their commission back to their clients by bringing a faster, efficient and secure sales process and a higher sales price for their practice. Just as your clients benefit from the value that a qualified, experienced and knowledgeable doctor brings to the table, you can benefit from the services of a qualified and experienced practice broker with specific expertise in your industry.
Michael S. Furlong - Senior Transition Advisor
Mike has been assisting Doctors with their practice transition needs for over 10 Years has personally been involved in $150+ Million in closed practice transactions.
Mike can be reached at
(800) 815-0590 or email@example.com.