The Private Practice eZine Spring 2013 Page 53

The Private Practice

Spring 2013

linda Sirol is a Practice
Succession Specialist at
Corporateyes Pty ltd.

SUCCESSION

PlANNING

Many doctors miss the opportunity to sell their practice at the price it deserves.
As

linda Sirol writes, the secret is in the transferable assets.

Reaping

Your Reward

So, you have a successful practice with
strong patient loads, an excellent
network of referrers, a loyal team and
wonderful goodwill. When you come
to retire, therefore, you should be able
to sell it for a great price, right?

Not necessarily. For too many

doctors the reality is that a buyer will
offer very little for what looks like a
thriving practice, and sometimes the
vendor's only option is to walk away
with little or nothing at all.

It's an extremely disappointing,

not to mention financially painful,
outcome for doctors who have put in
the hard yards building up a practice
they assumed would be a significant
contribution to their retirement fund.

EXIT STRATEGY

Why does this happen? As Tom
McKaskill, author of Ultimate Exits,
says: "Selling a business is not about
valuation, it is all about creating a
compelling opportunity for the buyer."

When a doctor is looking to buy

into a practice, their first consideration
is whether buying in will be a better
option than establishing, or expanding,
their own practice. They will ask
themselves: Will this practice continue
to thrive after the vendor has left?

If it becomes clear that the

majority of the value rests in the
goodwill generated by the retiring
doctor, then it starts to look like
a risky investment one that will
collapse the moment the vendor exits.

Put simply, a practice that rests

heavily on the personal goodwill of an
individual doctor is not a compelling
opportunity.

How can a medical practice become

compelling to a buyer? The best way is
to maximise the value embedded in the
assets of the practice itself; value that
will remain in place when you retire.

SALE ABILITY

The good news is that if you have
three or more years to go before you're
thinking of selling, you have plenty of
time to take a look at your practice from
a buyer's perspective, and adjust the
balance between personal goodwill and
practice goodwill in favour of the latter.

Here are 10 practice assets that

typically add value:
1. Areliableandsufficient

patient load.

2. Patient relationships with the

practice, rather than the
individual doctor.

3. Experienced and efficient

administrative and clinical
support staff.

4. Clear and robust contracts with

staff and suppliers.

5. An established documented

systems and procedures.

6. An established network of

multiple referrers.

7. Referrer relationships with

the practice rather than
individual doctors.

8. Well-presented rooms.
9. Appropriate and modern equipment.
10. Growth opportunities for

the practice.

Getting a great price for your

practice is not just about increasing
your retirement fund, however. It's
also about ensuring that your patients,
staff, referrers and suppliers can
continue the relationship they have
enjoyed with your practice long after
your departure. It's about reaping
rewards all round.