Business owners who regularly read this column and other business resources know that succession planning is a critical component of business ownership. For many physicians, it’s one of the most important decisions they will face, determining precisely how and when to retire from their medical practice.
Unfortunately, many physicians in California fail to plan their exit from their practice. Just like estate planning and going to the dentist, we tend to put off the difficult and the unpleasant. While it may be unpleasant to sit down and complete your tax return, selling your medical practice and setting off on your next adventure or phase of life can be exhilarating.
However, physicians often make the mistake of thinking they can wait and sell their medical practice immediately upon retirement, especially if they don’t enlist the help of a qualified and experienced business consultant.
However, these doctors often fail to realize that their practices must be well-positioned and ready to transition far in advance. Adequate planning and preparation can make the difference between a successful sale and a disappointing result, as well as failure.
California business consultant Andrew Rogerson explains that physician partners can embrace many strategies to facilitate the smooth transition of ownership. That said, it’s important to consider several variables so the right decisions are made for each specific scenario. Keep reading to learn about some of these critical factors.
Looking for a Mirror Image
Many physicians ready to sell their medical practices are under the wrong impression that their successors must be exact copies of themselves for them to take over the practice successfully. It’s easy for a doctor to think this way since it’s their way of operating that has resulted in a successful business. However, this thinking is limiting: the most critical aspect of a successful transition is to align values and leverage the unique styles of the individuals to attain these values. That opens the door to many more potential buyers.
When physician owners become frustrated because their junior partners don’t emulate them, they should take the time to converse with them, understand their perspectives, and even learn from them. Those physicians stuck in an unworkable model may also be inadvertently contributing to the stagnation of their practices.
Personality and Style
The personalities and styles of physicians who start private practices are typically those of independent individuals who took risks to achieve success. As a result, they may want the next generation of ownership to fit that precise mold. Instead, a physician looking to sell their medical practice should determine the roles and responsibilities that give their probable successors the best chance to showcase their skills and allow them to flourish with their style.
It can surprise many physicians when they see that the incoming partner’s style, although different from theirs, is warmly accepted by the patients and staff. While it may be a welcome change from an emotional and upbeat physician to one who’s calm, thoughtful, and never panics, the aspects of style that have made the practice successful, like responsiveness and patient care, shouldn’t be forgotten.
Plan Ahead
Like doing your taxes, succession planning can be a frenzied rush or a calm and orderly process. The difference is contingent on everyone involved prioritizing the medical practice and working toward the common goal of long-term sustainability.
Savvy physician owners will try to uncover the unique talents and attributes that the other partners bring to the mix, even if these are different than the status quo. In Andrew’s years of experience with transitioning medical practices, he’s found that when the values are in sync, and owners soften from the notion that there’s just one way to do things, the transition is smoother and the outlook much more positive. A well-thought-out succession plan gives the physician owner the time to train a successor and be confident that they truly understand the medical practice.
Transitioning from a practice takes time and preparation, and there are many issues to address. That’s why it requires professional assistance with the planning process so that the handover of your practice is seamless and stress-free.
But you’re on your own with the dentist.
There are Many Steps to Selling a Medical Practice
There are many steps to successfully selling a medical practice. Andrew Rogerson specializes in helping healthcare business owners sell their business, including a medical practice and its many steps. This includes a practice valuation, creating a marketing strategy to find qualified buyers, and handling all transaction phases, including third-party finance for the Buyer, due diligence, and escrow.
He’s the author of “Successfully Sell Your Business,” which is available for immediate download.
