In the past, selling your medical practice usually meant packing up, saying goodbye to your patients, and stepping away completely. But that’s not the only option anymore. Today, more physicians are choosing to stay involved in their practice even after handing over ownership. This growing trend is known as the “sell-and-work” deal.
If you’ve built your practice with dedication and long hours, it makes sense that you might not want to walk away cold turkey. Maybe you still enjoy seeing patients. Maybe you want to ease into retirement gradually. Or maybe you’re just not ready to be done yet. Whatever your reason, staying onboard after the sale could offer the flexibility you need.
Let’s see what these sell-and-work deals look like, why they are becoming more common, and how a transitional employment or workback agreement can help structure a smooth experience for both seller and buyer.
What Is a Sell-and-Work Deal?
A sell-and-work deal allows you to sell your medical practice to a buyer while continuing to work in the practice for a defined period of time. This arrangement benefits both sides. As the seller, you get to stay active in your profession and transition at your own pace. The buyer, on the other hand, benefits from your experience, patient loyalty, and operational continuity.
These deals typically involve a transitional employment or workback agreement that clearly outlines your role after the sale. It might include things like how many hours you’ll work, what your compensation will be, and how your responsibilities will change over time.
Think of it as a middle ground. You are not fully exiting, but you are also not bearing the full burden of running the business anymore.
Why These Deals Are Gaining Popularity
There are a few key reasons why sell-and-work deals are becoming more attractive in today’s healthcare environment:
- Aging Physician Workforce: Many physicians are nearing retirement age but are not ready to stop working altogether. Sell-and-work deals provide a flexible exit plan
- Work-Life Balance: Physicians are increasingly looking for ways to reduce stress and regain personal time while still practicing medicine.
- Buyer Confidence: Buyers, especially private equity groups or large health systems, feel more comfortable acquiring a practice if the former owner agrees to stay for a while. It helps ensure patient retention and smoother operations.
- Market Conditions: Competitive healthcare markets make it harder to recruit new physicians. Keeping the former owner onboard temporarily reduces the pressure to hire immediately.
- Gradual Transition: It allows time for the new leadership to learn the business while still having the original owner around for support.
How Does a Transitional Employment Agreement Work?
A transitional employment agreement is the legal framework that lays out what your role will be after the sale. It ensures everyone is on the same page and that there are no assumptions or confusion about what’s expected.
Here are some of the key things typically covered in this kind of agreement:
- Length of Employment: This could be six months, one year, or even longer, depending on the deal.
- Hours and Schedule: You might shift to part-time hours or only work on certain days of the week.
- Compensation: Your pay structure may change from a practice owner’s income to a salaried or productivity-based arrangement.
- Duties and Responsibilities: Will you still be making management decisions or focusing strictly on patient care?
- Termination Clauses: These outline how either party can end the agreement early if needed.
The transitional employment agreement gives both parties legal protection and clarity. It can help prevent misunderstandings and conflicts during what is often a delicate period of adjustment.
What Is a Workback Agreement?
A workback agreement is similar in concept but often more specific in scope. It may include goals and milestones to hit during your continued involvement. For example, you might agree to stay on until a new physician is hired or until patient retention reaches a certain benchmark.
In some cases, the workback agreement also includes performance incentives. If certain metrics are met, you could receive a bonus or other financial rewards in addition to your salary.
This type of agreement is especially helpful when the buyer is new to practice ownership and wants a strong partner during the early phase. It gives structure and accountability to the seller’s continued role.
Benefits of Selling While Staying Involved
There are several strong benefits for physicians who choose this route:
- Gradual Transition: You can phase out at your own pace without the pressure of a hard stop.
- Continued Income: You keep earning money while also receiving proceeds from the sale.
- Patient Continuity: Patients are more likely to stick with the practice when they still see a familiar face.
- Mentorship Opportunity: You can pass along your experience and knowledge to the next generation.
- Personal Fulfillment: For many doctors, staying engaged in medicine, even part-time, is emotionally rewarding.
From a financial perspective, this model can be very effective, especially if your business valuation is strong and the buyer values your post-sale participation.
Things to Watch Out For
As with any deal, there are potential challenges. Here are a few to keep in mind:
- Blurred Lines: It can be hard to let go of control when you are still working in the same space. Make sure roles are clearly defined.
- Cultural Differences: If the buyer’s management style is very different from yours, friction may arise. Communication is key.
- Legal Details: Work with a lawyer to make sure the agreement protects your interests.
- Compensation Expectations: Don’t assume your post-sale compensation will mirror your owner-level income. Be realistic and open to new terms.
The key is to go into the process with eyes wide open. Be clear about your goals and honest about how much involvement you truly want after the sale.
Final Thoughts
Selling your practice does not have to mean walking away entirely. With the right deal structure, you can stay involved, support your patients and staff, and make the transition more comfortable for everyone.
Sell-and-work deals give you the best of both worlds: the freedom to cash out and the satisfaction of continuing to make a difference. Whether you want to work a few more years or simply ensure a smooth handoff, these types of agreements give you the control and flexibility you deserve.
Make sure you get expert guidance throughout the process. The right team will help you evaluate the offer, protect your rights, and craft a plan that works for your lifestyle and goals.
Strategic Medical Brokers specializes in selling medical practices with flexible exit strategies tailored to your needs. Let us help you find the true value of your practice through expert healthcare business valuation services. We will guide you every step of the way. Start your future with confidence by reaching out today!
