Selling a practice takes a few steps. See what you need to do now to show off what your practice has and attract the best buyer.
A: As a seller, the gravest mistake you can make is to believe that you can obtain top dollar for your medical practice simply by supplying potential buyers a few financial statements and a tour of your office. Remember that buyers are purchasing the future value of your practice, so sell its future potential whenever possible. Consider recasting your financial statements to show the buyer what the business will look like after the sale. You don't need to include many of the costs that appear on your usual statements, such as insurance, travel, continuing education, or cell phones. Just be sure to include a full disclosure of how and why you made the adjustments.
Next, simply describe your practice. Tell potential buyers about your history, practice philosophy, subspecialty interest, number and type of patients, and what sorts of services you perform for them. Review your marketing and promotional efforts, and explain the competitive environment. Include an analysis of how other similar practices and larger groups compete with yours. The buyer will need to understand how he or she (or they) will benefit from assuming your practice in your market. For example, another practice in your area may want to add an associate for better call coverage, but may not have the business to keep him or her busy. Your practice, however, may fill that need without introducing another competitor of the same specialty.
Answers to readers' questions were provided by Judy Bee, Practice Performance Group, La Jolla, California. She is an editorial consultant for Medical Economics. Send your practice management questions to firstname.lastname@example.orgAlso engage at http://www.twitter.com/MedEconomics and http://www.facebook.com/MedicalEconomics.