There has been a significant increase in interest from hospitals and large groups in acquiring medical practices in and around California. Increasingly, physicians planning to sell their practices are conducting valuations to determine the value of their practice, which serves as a benchmark for negotiating. This process enables physicians to enhance their bargaining power and, consequently, secure a more favorable price for the sale.
Keep these thoughts in mind as you consider a sale of your practice:
1. Develop a list of several potential buyers
If you’re saying: Sell My Medical Practice In California, consider asking your business valuation consultant to get in touch with the most likely prospects to let them know that you may be selling your practice and that you wanted them to know about it.
This can include contacting local hospital administrators. You never know; they may have plans to start a practice group or want to offer your specific practice to someone interested in practicing in the community.
Additionally, your business valuation consultant should consult with each local group or specialist and inform them of your plans. One of these practices may be planning to expand, and they might want to hire a new physician to take over your practice.
2. If you own the practice facility, start your preparation for two sales
If you are the owner of your practice building or own your office space, you have some additional options, as there are essentially two sales. Consider the following:
- Sell the practice and lease the space. This allows you to become a landlord and collect rental income.
- Sell the practice and lease the space, with an option to buy. This gives you the chance to continue as a landlord or find a buyer to invest in rentable space; or
- Sell both the practice and the space. If a purchaser of the practice isn’t interested in owning the facility, you can look for a buyer.
3. Stay on as an employee physician
You may want to negotiate a position for yourself in the purchase agreement for the practice. In fact, the buyer, especially a hospital, may want to retain you at the practice as an experienced employed physician. You will now have two negotiations to think about:
(i) the sale of the practice; and
(ii) the employment agreement.
When the hospital becomes the owner of your practice, you should try to separate the future performance of the practice from your own as an employee. Try to negotiate a compensation plan that’s based on your performance rather than that of the new owners.
These three ideas should help you and your business valuation consultant prepare for an effective sale of your practice.
For more immediate assistance, please contact Andrew Rogerson, a certified business broker based in Sacramento, California. Call Toll-Free at (844) 414-9700. If you prefer, email him at support@rogersonbusinessservices.com. Andrew serves the whole state of California.
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