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Owner Exit Strategies
Even though you may just be starting your practice or believe that exiting ownership is many years into the future, you need to think about your options now. None of us knows what the future holds, but evaluating your choices, and keeping as many options open for as long as you can, will lead you to a successful exit. Throughout your ownership years, take time to view your practice as an outsider might. Is it profitable? Is it attractive? Are you offering the services that your clients want or need? Are your facility and equipment up-to-date? Are there changes you could make now in how the practice operates to increase both its profitability and its appeal to buyers? Do you know what those changes are?
The five years prior to an ownership transition are critical in maximizing your practice’s value and planning for a seamless transition. Profits during this period not only provide current cash flow to the practice and its owners, but also translate to increased practice value over time. Between now and when you exit ownership, good recordkeeping will help you demonstrate your practice’s value to a potential buyer, both in terms of financial results but also in the quality of medicine evidenced in your medical records.
As you get closer to leaving ownership, you need to explore the tax and legal implications of selling your practice. Smooth transitions depend on buyers and sellers who do their homework and approach a sale realistically, but with the goal of maximizing the seller’s after-tax proceeds while setting up the buyer to succeed.
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