SELLING YOUR MEDICAL PRACTICE
Making the decision to sell
Selling a medical practice can be a very significant moment in the life of a surgery, its staff and in particular its principal. Arriving at the decision requires plenty of research and professional advice. What price can you achieve? What will be the impact on patients and staff? Who will be the likely buyer? Can you walk away, or will you be required to remain for a handover period of a year or more?
Preparing your practice for sale
Preparing your practice for sale would ideally commence up to 12 months prior to eventual sale. It involves freshening up your premises, preparing your financial records, securing long term staff contracts, recruiting a full team of doctors, maximising patient numbers, establishing security of tenure over your premises and preparing your Practice Profile.
Finding a buyer
The most appropriate buyer for your practice will depend on the size of your surgery, it’s location respective to the buyer’s existing practices, your mix of clinical services, your scope for expansion and whether you generally fit into their business model.
Whilst searching for a buyer, and indeed throughout the entire sales process, maintaining confidentiality can be critical to the ongoing stability of your business and ensuring the loyalty of your staff and patients.
Marketing your practice for sale whilst maintaining that confidentiality is easier said than done. This can be achieved with the assistance of a broker who may have a list of registered buyers or through a specialised medical practice sales platform such as the one offered by Yeomans Medical. Our sales ads are carefully written to give prospective buyers the basic information they are looking for whilst preserving confidentiality.
Valuing your practice
Determining an asking price for your medical practice, or a high or low range within which you are prepared to negotiate, can be a very involved process and is best done with the assistance of your broker.
The factors influencing your price will be: your turnover & profitability; your location with respect to visibility, convenience, proximity to shopping centres, transport and parking; the stability and experience of your staff, particularly your doctors; your premises and overall presentation; fixtures and fittings; goodwill; the security of tenure over your premises; and the scope for business expansion; local competitors.
Negotiating the sale
When negotiating of the sale of your practice it is important to be clear about the valuation your broker has prepared for you and the tangible and intangible factors that make up this value. This will give you a good idea of the upper and lower limits of your price band. It should also be kept in mind that the better value for money you can offer, the quicker your sale is likely to be. Additional negotiating factors may very well involve a minimum handover period that requires the principal to remain with the practice for a year or two after the sale to ensure a smooth transition.
The contract process is where professional advice is critical to ensure you achieve the right outcome. This will involve appointing solicitors and advisors to assist with completing a Heads of Agreement, signing contracts, closing the sale and the final completion and takeover.
How we can help
Yeomans Medical specialise in the discrete marketing of your medical practice on our Sales Board and work in close conjunction with Babich Medicos, one of Australia’s leading experts in medical practice sales and valuations.
Principal Chris Babich has been involved in GP recruitment and medical practice brokerage for 37 years and is regularly called upon by the legal system for his expertise in medical practice valuations. He recently presented a talk on the subject at the 2018 annual Australian Association of Practice Managers.
If you are considering the sale of your practice don’t hesitate to give us a call for a free, no obligation chat.