Thinking of selling your practice? Here's how

As seen in Medical Observer.

The landscape for valuing medical practices has changed. The combination of corporate transactions recognising the value of medical practices and strong banking policies assisting the financial of acquisitions means that practices are being sold for considerable goodwill value.

If you're a practice owner, here are six sales-ready tips to help you maximise your transaction and leverage this trend.

1. Know your target market

Knowing how your practice appeals to the market and who your prospective purchasers are will allow you to develop a strategy for the right audience.

2. Develop an action plan

Know your timeline for taking the practice to market and your approach. Don't wait until your retirement year to get advice - ideally, you need to start five years before your planned exit.

Documenting a plan with timelines and required steps will greatly assist your sale preparation.

Work with your business adviser to identify prospective purchasers and conduct a SWOT analysis (strengths, weaknesses, opportunities, threats).

This will identify areas requiring either improvement, maintenance or those needing to cease.

3. Reduce the reliance on you

Make the business worth more without you by reducing the dependence on your personal exertion and knowledge.

Some ways to achieve this include leveraging other professionals and team members, increasing the scale of your business, training key staff, investing in professional development to enhance care levels, implementing an effective team structure and introducing incentives and rewards to encourage performance improvements.

4. Analyse your revenue streams

Critically review your revenue streams and, if required, adapt or change to easily demonstrate a recurring and profitable revenue mix.

Its important to recognise that different employee categories contribute varying revenues.

You need to understand each category's contribution for effective revenue management.

5. Reduce revenue threats

Minimise the threat of revenue shrinkage by increasing your service lines, reviewing billing methods and investing in patient care initiatives.

Some actionable examples include offering holistic services and identifying collaborative care opportunities through patient reviews utilising data analysis and management tools.

From a customer experience perspective, technology greatly improves loyalty through enhanced interaction with online bookings and SMS appointment reminders.

6. Understand tax implications

Know the capital gains impact of any transaction to ensure it minimises tax.

By planning ahead, you can ensure you maximise the use of available small business capital gains exemptions.

Structuring a sale contract to favour your after-tax outcome and directing the proceeds of a sale to an appropriate structure (for example, a super fund or family trust) can significantly change your net return.

A tax-effective structure can ensure you minimise the amount lost in tax on the transaction.

Take charge now

We all recognise that by establishing regular health checks, we've got a greater chance of preventing problems throughout our lives.

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