If you’re in private practice, you have probably spent a great deal of time thinking about how you would build your business. But did you ever consider your exit strategy?
I’ve advised many medical professionals on managing and selling their practices, and these are the questions I urge people to ask themselves when they’re thinking about a sale.
Signs that point to an exit
At a certain point, you may be successful enough that you no longer want to keep building your practice. Perhaps you don’t want to keep growing in size and complexity, and you’re ready for a new challenge.
There also comes a point of diminishing returns: You only have so much time and energy as a physician and as a manager, and you want to reclaim some of it for other areas of your life.
While you may love what you do, it is never too early to do some contingency planning. Just as a financial planner would ask you to focus on your future and make contingency plans, the same goes for the way you think through the future of your practice.
What if your spouse finds a job in another place, and you need to move? A parent or relative needs care, you fall ill, or are feeling burned out? And while none of these situations may ever occur, putting some thought into your exit will go a long way to giving you peace of mind—even if your exit is a planned retirement at the end of a gratifying and lucrative career.
Ask yourself some basic questions
As a consultant, I’ve been through the emotional ups and downs with many physicians looking to buy or sell a practice. I recommend thinking through these questions before taking steps to divest.
• Are you ready to be done with your practice and completely turn over control to another physician?
• How does your family feel about it? Have you discussed your feelings and talked to them about an exit strategy?
• How does it feel to imagine that your practice has been sold to the perfect buyer and you are no longer involved? What are you doing in that scenario? Where are you doing it?
Beyond the personal questions, there are larger “what-ifs” to consider. Consider what you might do if:
• You can’t get as much money for the practice as you think it’s worth.
• You have installment payments going with a buyer and at some point they stop paying. Would you be willing to repossess the practice? What else could you do?
• You have less money coming in after leave your practice?
• You need to find another way to make a living?
Think these questions through carefully and discuss them with those closest to you. If you and your family are of two minds about the answers, we recommend you work though those issues before you try to sell your practice. More specifics about getting your practice ready to sell are available here.
Unfortunately, post-sale planning is an important step that many physicians skip. Keep in mind that it’s rarely too early time to start thinking about your next act. Even when your practice sells for an amount that makes you happy and you can move on with your life, you’ll sleep better knowing you have a solid idea of what’s next.