by Veatch Ophthalmic Instruments
| Tuesday, October 27, 2015 |
The choice to sell an optometrist or ophthalmologist practice is one of the largest decisions a practitioner makes. Deciding on a price, when to sell, who to sell to, and how to induce a smooth and expedient transition are all top-of-mind when making preparations to hand over the reins. Building an exit strategy can be challenging, but some up-front preparation can make the entire process run much more smoothly.
Don’t Slow Down
It may make sense to begin slowing down your practice as it comes time to sell, especially if your sell date is a few years off and you’re reaching the end of your career. But from a buyer’s perspective, buyers are much more likely to purchase a booming business than one whose clients are lazily trickling in. If you want to slow down 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 healthy revenue, and that means that your practice should be busier than ever when buyers come knocking.
Get Your Financials in Order
Throughout the buyer’s process of due diligence, they’ll undoubtedly be looking for fastidious financial record-keeping. A clear financial picture is a critical piece of the sale.
- Clean up ancillary expenses. If you use your business account for anything personal, begin by removing those expenses from your books. The cleaner and clearer your practice’s bottom line is the better.
- Make sure all contracts are current, countersigned, and up-to-date. You should have on-hand a copy of all contracts from your vendors and service providers. Check your contracts or reach out to contacts 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.
- If you plan on selling your practice, you should also consider upgrading your equipment. A practice equipped with equipment that is up to date will highlight your practice as a good investment.
Outline Your Timeline and Goals
Before you put your practice on the market, clearly define what you’re trying to get out of the sale, and when you ultimately want to transfer your business to another party.
- 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?
- How much do you want to sell your practice for? How much do you need to sell your practice for? Do you have a contingency plan in case your practice can’t sell for the price you want?
- When do you want to sell? When do you need to sell?
- Do you plan to hire a professional practice broker to help you sell?
Selling your practice is a big decision, and a weighty endeavor. Professional brokers can help, especially if you invite them in well ahead of time. They can help you set yourself up most profitably and build the equity you need to garner the sale price you desire.
It’s important to have your timeline in place, your financials in order, and a clear understanding of your ideal exit strategy well in advance of your desired sell date. Ideally, optometrists and ophthalmologists should be planning their exit up to five years in advance of the sale in order to ensure contracts are transferable, the practice’s bottom line is clean and clear, and any personal charges are ferreted out of the practice budget.