How to Negotiate the Prices When Selling Your Medical Practice >> Selling a medical practice could be an overwhelming experience due to the mere complexity of the procedure involved. There can be any number of reasons for someone to sell up their practice. They could be selling it since they’re no longer interested in the work, they could be selling it since they want to take up another job, they could be selling it at a loss, or they could just be selling it as they are retiring.
Whatever the reason is, negotiation is a critical element that determines the price and future of your medical practice. You could choose to handle these processes independently or click here to book a free consultation with an experienced medical office broker who can represent you in negotiations and get you the best deal possible.
How to Negotiate the Prices When Selling Your Medical Practice
Determine Why You are Selling the Practice
Why do you want to sell your medical practice? This may seem like a simple question, but it’s essential to have an answer nonetheless. For example, are you selling a part of your practice to cut back on working hours? Or are you looking to sell your entire practice but have a stake in the new owner’s practice?
Answering these questions will aid you in setting minimum criteria to be fulfilled before a sale, like flexibility on price negotiations or prioritizing the buyer’s medical experience. You could use these factors to target potential buyers and screen other buyers who will not help you achieve your objective.
Get a Valuation Done
Knowing how much your medical practice is worth is one of the critical factors before you get into the negotiation process. In addition, you need to have all your financial documents like balance sheets, profit and loss statements, revenue reports, tax filing reports, loans, debts, and other such documents in hand.
Selling a practice could be an emotional decision for many. Because of your efforts in building up your business, it becomes challenging to come to a fair financial valuation. You could hire a broker to facilitate the process of successfully making a sale. They can help get you a fair and objective valuation of the practice.
Hire a Consultant
According to an interview published in Medical Economics, medical practitioners often overlook several financial and tax implications when selling their practice. One needs to consider the different payment models that come into play.
The interview stressed the importance of having an advisor present during negotiations to ensure that the buyer is offering the best deal, not the deal that suits them best. In addition, if you wish to retain equity in the buyer’s practice, the tax issues then tend to get complicated. By hiring consultants experienced in handling the selling and acquisition of medical practices, you will safeguard your interests.
Price is not the only aspect that goes into consideration when selling your medical practice. You first need to understand the reason for making the sale and draft your negotiations accordingly. Next, get a valuation from a third party to know your property’s worth, and gather your documents.
Remember to conduct due diligence to make sure the buying party is financially sound and can afford the transaction.