10 Key Questions to Ask When Selling Your Medical Practice

Selling a medical practice marks a major life transition. This guide outlines 10 key questions to consider to ensure the best possible outcome:

 

 

1. Why Are You Selling Your Practice?

 

Understand your core motivations. Is it retirement, burnout, or wanting to start a new venture? This self-reflection will provide important context that will shape the process ahead.

 

2. How Long of a Transition Are You Willing to Offer?

 

Plan for a transition period spanning 4-12 months to ensure continuity of care. This also ensures a smooth handoff of staff and operations to the buyer. Communicating a thoughtful transition plan upfront reassures buyers and minimizes disruption.

 

3. What is Your Practice’s Revenue Mix and Payor Breakdown?

 

Buyers will closely assess your practice’s financial health and growth potential. It will be based on details like:

 

    • Percentage of revenue from insured patients vs. self-pay
    • Mix of Medicare, Medicaid and commercial payers
    • Profitability of different service lines

 

 

Having these available will allow buyers to fully evaluate your practice’s potential.

 

4. How Many Active Patients Have You Seen Recently?

 

Knowing the number of patients seen in the past 24 months helps value your current patient base. Focus on active patients only, excluding any inactive or lapsed patients from metrics.

 

5. What Are Your Practice’s Financials Over the Past 3 Years?

 

Buyers will want to scrutinize your revenues, expenses, and other key financial metrics. This is so they can gauge stability and performance over time. Prepare to share your practice’s detailed financial statements.

 

6. Are You Willing to Share Risk With the Buyer Post-Sale?

 

Offering contingencies based on patient retention keeps you invested in the transition. This encourages your cooperation during the transition and commitment post-sale.

 

7. What Assets Are Included in the Sale?

 

Outline equipment, intellectual property and other assets that will be a part of the deal. This avoids disputes down the line and enables an accurate valuation.

 

8. Is Your Practice Optimized to Sell?

 

Consider these steps to maximize your practice’s value:

 

    • Fix online reputation.
    • Add providers.
    • Achieve EMR adoption.
    • Streamline operations.
    • Update aesthetics.

 

 

Taking these steps will help boost its appeal and valuation for potential buyers.

 

9. Who Are Your Most Valuable Payors?

 

Identify the specific payors who are driving revenue. Sharing this segmentation highlights the value depth within your business.

 

10. Will Your Staff Stay On Post-Sale?

 

Retaining staff is crucial to ensure continuity of operations and patient care. Major staff departures can raise red flags related to stability and patient retention. Be proactive in addressing any staff concerns.

 

Asking these questions upfront ensures the optimal outcome when selling your medical practice. Being thorough in your preparations will position you as a knowledgeable, qualified seller. This will maximize your chances of a successful and profitable transition.

Additional Resources

  1. Learn more about whether now is the optimal time to sell your practice in our blog, “Is Now the Right Time to Sell Your Medical Practice?
  2. Avoid common mistakes by downloading our free guide, “9 Biggest Mistakes Owners Make When Selling a Medical Practice.” [PDF landing page]
  3. Get a free instant valuation for your practice using our Medical Practice Valuation Calculator.
  4. If you need any help thinking through these questions or preparing your practice for sale, please don’t hesitate to drop us a line below. We’re always happy to help guide you through this process.

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