Every physician and practice owner will sell their practice during their career. There are a variety of reasons which will lead to the sale of your business, some of which include:
- Choosing to sell your practice to a hospital|health system and becoming an employed physician
- Merging your practice with a larger practice
- Death or disability
What are some considerations that you should take into account?
- Cost of Tail policies if you carry any claims made insurance policies. Medical Professional Liability (medical malpractice) are commonly written on this type of insurance policy form.
- Employees – What will happen to your staff? Most employers are close to their employees and want to be sure that their staff will be taken care of in the future.
- What is your company worth or otherwise stated what is the stock that you own worth? If your operating agreement indicates the stock is worth $1, it may make negotiating the sale of that stock more challenging.
- How will you be paid? This sounds like a simple question, but can be complex in practice. Everyone wants to make sure that the value of their company is maximized and you get as much $$$ up front, without hamstringing the future capital of the practice.
The best tip I can provide, is to do your homework. This is true whether you are a medical practice or any other type of business. If you have proper planning on the front end by drafting an operating agreement, buy/sell, stock repurchase, etc… you have an opportunity to exit your business on your own terms and the business you built will be able to survive and thrive into the future.