Sell Your Medical Practice

Physicians may be uncertain about how to accurately value their medical practice, leading to concerns about getting fair market value. 

The healthcare industry is subject to numerous regulations. Navigating these complexities during a sale can be overwhelming for a private practice. 

Understanding the financial and tax implications of selling a medical practice can be a pain point for a physican at a private practice, especially if they lack expertise in these areas. 

Maintaining confidentiality throughout the sales process, particularly regarding patient information, is key for a smooth transaction.

Negotiating the terms of the sale, including price, payment structure, and any contingencies, are tasks that require guidence from tax and brokerage experts.

Planning for a smooth transition, including the future of staff and patient care, is a concern that physicians often grapple with.

The creation and review of legal documents, such as contracts and agreements and the legal aspects of a practice sale.

Finding qualified and suitable buyers for the medical practice can be time-consuming

There are many reasons to sell medical practice. As a physician seller, you may want to retire, pursue other opportunities, free up cash flow, or diversify holdings. Additionally, personal circumstances such as going through a divorce, facing health issues or retiring from the practice might prompt the desire to sell. No matter the circumstances, as a physician you have invested a great deal of time and effort in building your healthcare practice and selling can be a difficult and emotional time. 

To determine the value of your medical practice, Reed Tinsley + Tinsley Medical Practice Brokers  employs various valuation methods. These include assessing tangible assets, patient records, location, and financial performance. The need for a valuation arises in situations such as selling the practice, acquisition by a hospital, retirement, partner changes, divorce, mergers, associate buy-ins, litigation, and tax or estate planning. The goal of a valuation is to assign a quantifiable value to your practice, with methodologies like the income approach, asset approach, and market approach applied based on the specific engagement.  Learn more about valuation here.

Preparing for the sale of your medical practice requires a lot of careful planning and working with experts. Below are the larger steps to prepare for a sale, but it’s important to understand each of those steps requires multiple smaller steps and working closely with experts such as Reed Tinsley + Tinsley Medical Practice Brokers at each juncture. 

1. Assess your practice 

1. Obtain a professional valuation 

1. Organize financial and operational records 

1. Develop a transition plan 

Understanding tax consequences, including capital gains. depreciation recapture, and personal goodwill is crucial for both buyers and sellers. I’ve written a blog on this subject, please go here for an overview of the tax implications of selling your medical practice.