Urgent Care: How to sell it
It’s rarely easy to sell your business. Typically, this is an extremely emotional decision and process, as many business owners have built their businesses from the ground up and have poured their hearts and souls into them. The first and one of the most critical steps in this process is to get some quality advice. You should have a business advisor who’s experienced in negotiating these types of deals. It’s an incredibly time-consuming process, given the amount of material and the level of detail required of the urgent care facility before a sale is made.
Factors in a Sale
Another important criterion in your sale is the way that the urgent care center is positioned and promoted. The detail and the thoroughness of your disclosures will exhibit your abilities and will be reflected in the eventual purchase price. Be sure to use a business consultant who understands the urgent care industry, the players, and the process, like Andrew Rogerson in Sacramento. Make plans to speak to him early in the process—prior to signing the non-disclosure agreement (NDA).
Next, you should determine the type of entity that will be purchasing your business, such as private individuals, private corporations, private equity groups, and publicly-traded organizations. Each of these will have different reasons for buying your business, and your business advisor will understand each type of buyer, even if you have little or no experience with that type of entity. The type of entity that’s purchasing your urgent care center will also have a bearing on the type of purchase this will be—whether it’s a stock purchase or an asset purchase can impact you financially. The stock purchase will give you a better tax rate than the asset purchase.
Legal aspects of the urgent care sale
If the urgent care facility is owned by a professional medical corporation, that corporation may want to sell with a stock purchase agreement where all shares of stock are sold to the buyer, including assets and liabilities… or via an asset purchase agreement in which the urgent care facility’s liabilities remain with the seller.
And consider the amount of debt you may owe that will need to be paid off when the deal takes place.
An important legal aspect of the sale of an urgent care facility is the fact that despite it being operated as a hospital outpatient unit, a free-standing urgent care centers may be operated like medical groups or private medical practices. If so, there must be a distinct separation between the clinical operation of the practice of medicine by physicians—and administrative, management, and marketing functions by a management services organization or MSO.
No sale without a licence
The owner of the urgent care facility needs to be certain that the buyer is a licensed physician or professional medical corporation. California is very protective of the corporate practice of medicine. It prohibits undue intrusion by non-physicians such as investors or business managers in the clinical environment.
These are just some of the factors you must consider when you’re deciding to sell your urgent care facility. An experienced business advisor will help you with all the issues surrounding the sale. One more is the facility’s valuation. Medical practice valuation can vary considerably, so depend on your business broker to recommend an urgent care valuation expert with experience with both urgent care centers and valuation.
As soon as you’ve identified a potential buyer, and you’ve agreed to start discussions with them, the buyer will give you a Letter of Intent (LOI). Once the LOI is signed, the Due Diligence process will begin, where the buyer will ask for detailed documents to validate everything you’ve represented about the urgent care facility. This is when things can be discussed between the parties concerning the specifics of the transaction. After the seller has given satisfactory diligence to the buyer, a Purchase Agreement is drafted, and once the terms are ironed out, the closing takes place.
Many Steps to Sell a Medical Practice
There are many steps to successfully sell a medical practice like an urgent care facility. Click here if you would like a one page summary.