As with any business, the decision to sell is a significant one. Whether you are selling your ophthalmic practice outright or merging it with a larger practice, there are numerous factors involved with ensuring a successful sale and a smooth transition. Building an exit strategy may seem challenging at first, but with a little preparation you can be sure you sell your practice at the right time, to the right buyer, and for the right price. Below are a few simple tips to help you get started.
Resist the urge to slow down.
It may make sense to begin slowing down your practice if you plan on selling, especially if your sell date is a few years off and you are reaching the end of your career. However, buyers are far more likely to purchase a thriving business than one with a dwindling patient base. If you personally want to step back and work a bit less before your sell date, consider hiring another optician or ophthalmologist to take on some of your patients so that the overall amount of business coming in through your doors remains the same or even increases. Prospective buyers will be looking for a practice with a healthy revenue, and that means that your practice should be busier than ever when buyers come knocking.
Get your finances in order.
A clear financial picture is a critical component of the sale of any business. Potential buyers want to know they are making a good investment, and during the due diligence stage they will be looking for fastidious financial record keeping. Here are some things you can do to facilitate the process.
- Declutter your expenses. If you use your business account for any personal expenses, begin by removing those expenses from your books and keeping your finances separate. The cleaner and clearer your bottom line, the better.
- Make sure all contracts are current and countersigned. You should have on hand a copy of all contracts from your vendors and service providers. Review each one to make sure that transferring your business does not warrant a breach of contract. Know the cost of each service or product, when the contract was initiated, and when it expires.
- Clearly outline what you bill versus what you collect. Many practitioners write off a good portion of their charges, and this is an important item to list out to potential buyers. Without this delineation, buyers cannot distinguish the true worth of your practice from the actual amount of money collected.
- Consider upgrading or selling your equipment. Advancements in ophthalmic technology happen quickly, and equipment manufacturers keep pace by continually developing new and better instruments. Potential buyers are more likely to purchase a practice with newer digital and automated equipment as opposed to older manual equipment. If you plan on selling, you may want to consider first upgrading your equipment to present your practice as a good investment.
Outline your timeline and goals.
Before you decide to put your practice on the market, it is important to clearly define what you are trying to get out of the sale and when you want to transfer your business to another party.
- By when do you want/need to sell?
- How much do you want/need to sell your practice for?
- Do you have a contingency plan in case your practice does not sell for your ideal price?
- Do you want to continue practicing after you sell?
- If you own your building, do you want to sell it or rent it to the buyer?
- Do you plan to hire a professional practice broker to help you sell?
Selling your ophthalmic practice is a significant financial endeavor. A professional broker may help position your business in the most favorable light, especially if you begin working with them well in advance of your desired sell date. Brokerage firms can help provide a clear and accurate valuation of your practice and build the equity you need to garner the sale price you desire.
Overall, it is important to have your timeline in place and a clear understanding of your ideal exit strategy well before you get the ball rolling. Ideally, ophthalmic professionals should begin planning their exit strategy up to five years in advance of the sale to ensure their contracts are transferable, their bottom line is clean and clear, and any personal charges are separated from the business budget.