5 Questions to Ask Before You Sell a Medical Practice

With more emphasis on health and wellness than ever before, the healthcare industry has been booming in recent years. In fact, from 2014 to 2019, the medical practice industry grew a whopping 2.5 percent. With so much growth and profitability in the industry, now may be a great time to sell a medical practice. If you own a physician practice and are preparing to wind down your career, ask yourself the following five questions to prepare your practice for sale.

Prepare to Sell a Medical Practice With These Questions

Whether you specialize in family medicine, primary care, pediatrics, gynecology, or another field, the steps to sell a medical practice are more or less the same. Ask yourself these five questions as you begin preparing your medical practice for sale.

1. How Will I Exit the Medical Practice?

First and foremost, you must plan an exit strategy. A solid exit strategy will allow you to seamlessly sell the practice with minimal impact on the office’s day-to-day operations, patients, and other healthcare providers. Be sure to set specific timelines and goals, as well as answer questions like:

• When will I officially retire from the practice?
• How much do I need from the sale of the practice in order to retire comfortably?
• Will my fellow physicians and practice management staff on after the sale?
• What will I do after selling? Am I willing to stay on as a doctor or practice consultant for a set amount of time post-sale?

Once you’ve answered all of these questions, you’re ready to move on to the next step.

2. Who Will Buy my Medical Practice?

Next, consider who will buy your medical practice. Most commonly, physicians sell their private practices to:

• Other physicians in the practice,
• Competing medical groups,
• A family member.

Because the sale of your practice should be confidential until a deal is closed, it is best to work with a business broker or legal advisor to find qualified buyers and negotiate terms.

3. How Does my Medical Practice Compare to Competing Offices?

Before listing your medical practice for sale, analyze other independent practices in the area, and consider how they compare to your own practice. A potential buyer is going to be looking for a practice that has an extensive patient list, as well as specialty services that set it apart from competitors.

Opportunities to explore may include:

• Offering e-visits, weekend appointments, or same-day appointments for patient convenience
• Sprucing up your online presence to attract tech-savvy patients online
• Integrating a patient portal like MyChart into your practice
• Incorporating specialty services or specialty technology into your practice
• Renovating your office
• Transforming your waiting room with comfortable seating, complimentary coffee, TVs, and magazines
• Hosting monthly seminars to educate patients and network with people in your community

Anything you can do to attract and retain patients will certainly be a prospective buyer.

4. What Will I Include in the Sale of my Practice?

Next, you’ll need to determine what you’re willing to include in the sale of your practice. Inclusions in a deal will vary significantly from practice to practice and will be heavily dependent on the amount of equipment and supplies needed to run your practice. If you own the real estate that you run your office out of, consider whether or not you’re willing to include that in the practice sale.

5. What is my Medical Practice Worth?

To accurately determine the value of your practice, it is best to enlist the help of a third-party appraiser to perform a business valuation. A medical practice valuation will help you determine the fair market value of your practice, and select a reasonable asking price that you can defend to potential buyers.

You’ll undoubtedly have more questions about selling a medical practice as you begin your journey through the sales process. To get all of your questions answered, reach out to the professional medical practice brokers at a Sunbelt Business Brokers office near you. Our network of brokers has years of experience helping physicians sell their practices. Trust us to help you land a deal, too!