With Private Equity groups scooping up practices left and right (it seems that way at least), it stands to reason that most owners have at least thought about whether they would say yes to the right offer. I tell most owners that they should own their practices for as long as possible.
But that doesn’t mean you shouldn’t keep the end in mind. Here are three reasons you ought to keep your practice’s final sale in mind.
To protect yourself
I recently learned that half of business owners will be forced to exit their businesses because of one of the ‘5 Ds’: death, disability, divorce, disagreement or distress. I’ve seen all of these trigger fire-sales of practices. So, while many of you should anticipate owning your practice for decades, you should also have a business that’s ready to sell on short notice.
Practices that aren’t ready to sell can lose tons of their value if they’re forced to sell – and some will simply be unsellable. Given that most business owners have most of their wealth stored in the business, you owe it to yourself and your family to steward and protect the value of your practice. And to make it easy for your family if something prevents you from executing the sale of your practice.
To make selling easy.
Here’s the key idea when it comes to your practice’s sell-ability: how easily can a third party see the benefits of owning your practice (cash flow, free time, low-stress staff) and how easily do those benefits transfer to another owner?
A business that is ready to sell is going to be worth more, because it takes the risk off the buyer. What are some things that make your practice easier to sell?
- Hire good people, train them well and create a culture that promotes and rewards tenure.
- Have a good practice management system and EHR and use them well.
- Keep accurate financials.
- Grow enough to have another OD, so patients aren’t just there for you.
- Have a clear practice brand, differentiated from your competition.
To make your business better now
Take another look at the list above. Regardless of whether you’re planning to sell in 12 months or 12 years, that’s good business advice. And that’s just the thing. The most sellable businesses are the best businesses. The good exit strategy is good business strategy.
Focus on making your practice the best it can be TODAY. The best practices are low-stress businesses which provide a premium income to their owners and give their owners reasonable control of their time. What are you waiting for? It’s good for you now; it’s good for you when you sell; and it protects you and your family should unpredicted events force you to sell before you planned to.