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10 Ways to Exit your Practice Feet First |
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| Most chiropractors consider their practice an investment and at some point will think about selling it as a part of their retirement package. Most, but not all. Some chiropractors want to work up until the very end. While we are bombarded with advice related to growing a practice, very little information is available to support those who want to stay in practice until their last day on earth.
Here are ten simple rules to follow if you would like to work until you drop. It is very important that you follow them carefully. You wouldn’t want to inadvertently be able to sell your practice, become rich and find yourself idle in retirement. |
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Rule #1. Don’t write a business plan. Business plan! Who needs them anyway? You already know what to expect and what is going to happen next. If you are going to prioritize, you will need to develop some priorities. If you are going to organize your thoughts, you will actually have to organize your thoughts. It takes too much time. |
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Rule #2. In fact, avoid planning of any kind. Everyone knows how unpleasant it can be to meet with financial and estate planners. They ask too many questions and will make you think about your own mortality. This is very bad karma if you are planning to work forever. Besides, most of what you have is probably going into making ends meet anyway. |
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Rule #3. Now that your practice is successful, it’s time to take it easy. Your practice has reached a manageable size. If you decide to grow it further, you will have to work harder. A practice that has reached a plateau is much easier to run. That type of practice must surely be more valuable than a growing one that puts demands on your time. Just relax. You’re not going anywhere anyway. |
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Rule #4. When you’re going to sell your practice, don’t get a practice financial valuation by an accredited professional. This is a total waste of money. You’ve heard about someone who sold his practice for something. Call him up and ask him what you should do. Rely on his expertise and save your self a few bucks. Or you can use the “Rule of Thumb” method. Just multiply some number by something. Anything so simple and time honored has to be accurate. Maybe your realtor or attorney knows someone who sold a practice. Between all these sources, you’ll find someone who will agree with your expectations. | |||||||||||||||||||||||
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Rule #5. When you’re going to buy a practice, don’t get a practice financial valuation by an accredited professional See Rule #4. Change “sold” to “bought”. With the right advice, you could actually enter the practice feet first. |
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Rule #6. Time is not of the essence. You wouldn’t want to think about making life style changes too far in advance. Buyers of practices always seem like they are in a hurry. They always come to you with some sob story like “I am living off my life savings and am anxious to buy your practice”. This is just an act. They have plenty of time to wait until you get organized. Buyer’s representatives might call and try to give you the idea that deadlines are meaningful. Ignore such arbitrary demands. Be sure to surround yourself with like-minded advisors. |
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Rule #7. Don’t keep your financial information and practice stats up to date. One of the things you always have enough of is time. Rule #6 proved buyers don’t mind waiting. And after all you’re a doctor. You know there are always plenty of warning signals when something bad is going to happen. Besides, gathering and entering years of data takes just a little longer than entering current figures. Even in the case of an untimely event on your part, your family can easily figure out what you are doing and where to find all the information they are going to need. And they will enjoy the joke you played on them. |
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Rule #8. Don’t spend time or money training your staff. You’re the doctor. The patients come to see you. It’s all about you. And there is the added value of you doing the buyer a favor. A new doctor probably wouldn’t see the value in keeping a highly trained, well organized staff in place. Besides, since the staff already knows all the patients, they might interfere with the new doctor establishing himself. New buyers usually want to buy a practice and then dismantle it anyway. |
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Rule #9. When you go to sell your practice, some skeletons are best left in the closet. Disclosing negative information about your practice will only lower its value. If it surfaces before closing, you can always dance around the issue. And besides, you’re sure there wasn’t anything about indemnifying the buyer in that small print. |
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Rule #10. They’ll always see it your way. You might have let your guard down and signed a Letter of Intent. Don’t worry about it. All is not lost. There will be four to six weeks for you to renegotiate the deal on a daily basis. The hook is already in the buyer’s mouth. Now is the time to be creative. Demand payment for unreported revenues. Come up with new add-backs to improve your apparent cash flow. As a last resort, just say you want more money than any of the figures will support. After all, yours is a very special practice. |
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| By following these simple rules, no one will ever want to buy your practice. Your job will be secure as long as you remain physically able to perform. This is, of course, unless your practice goes belly up in the interim. |
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