I spent a considerable amount of time both contemplating and working through the sale of my private practice. If you own your own hearing clinic(s), making the decision to sell will likely be one of the biggest decisions of your life, both financially and emotionally. After making the decision to go ahead with it, I was fortunate to have built a network of professionals on the buying side, and on the legal and finance side, but my consulting work in this area more recently has taught me that this is not the norm for most clinic owners. I have compiled a few tips below that may help you with your decision. I have both personal experience with and selling my practice, as well as some anecdotal experience from helping others sell their practice. The information below is offered as general education and not as financial advice or advice specific to your needs. If you would like to meet with me virtually, please schedule a time to meet if you would like to explore selling your hearing clinic!
How much is it worth?
Let’s cut to the chase. There are many considerations aside from the monetary ones but understanding the present value of the business you have built is paramount before entering into any discussions or negotiations. There are professionals you can hire independently, like business valuators. The drawback here is that they might not know our industry well. Hiring a consulting firm to negotiate the sale for you is another option. Much like using a realtor, there are some hefty fees to pay here. Speaking with those who have been through the process and learning about their experience is the ideal solution, provided they are able to share some of their experience without violating any non-disclosure agreements!
Sell it now or later?
The allure and prospect of a large payday is enough to entice any business owner to be constantly weighing the pros and cons of selling their practice. Other factors like cyclical burnout, family life, clinic legacy, and what you want to do after the sale are arguably more important considerations. From an economic perspective, you should be weighing your current and future net earnings vs. what you can do with the large lump sum when invested in other assets. This is the easiest part of your decision – they’re just numbers!
Who will buy it?
Potential buyers include large manufacturer-owned retail chains, partnership groups who may want to buy all or only a portion of the business, an independent chain nearby, or maybe even your staff. You should explore all your options and avoid settling for any one offer, and don’t be in a rush.
Tax planning and corporate structure
When I purchased my own private practice, I decided early on that I would hire the best tax accountant and a corporate lawyer that I could find. This proved to be one of the best decisions I could have made. Whether you are a sole operator or have a partner, early corporate planning and tax strategy to future-proof your business is vital. I have now consulted with several clients who did not ideally structure their businesses at start-up, and now are in a less advantageous position when it comes to selling. For example, in Canada, many small business owners will qualify for the Lifetime Capital Gains Exemption when they dispose of the shares of their business. But certain tests must be met for at least 24 months prior to the share sale, so to qualify, you need to have these details sorted well in advance (I would suggest at the time of incorporation!) prior to proceeding with the sale of your business.
Succession and legacy
What happens to your clients and your staff once you hand over the keys to the new owner? This question will surely weigh on your mind when deciding whether to sell and who to sell to. Ensuring your staff are taken care of can be part of your negotiation, but your clients are likely going to have a different experience when they return to the clinic and so the legacy and culture of your clinic should also be considered when choosing a buyer.
What am I supposed to do now?
If you are nearing “retirement age”, then the question of “what next?” may not seem as daunting as it was for me. Perhaps you can transition to a part-time basis, help mentor students or new clinical staff, or continue to do any of the work that you find most fulfilling. This can all be negotiated. If you are younger (I sold my practice at 39), then you need to have a vision of what you will do next. If you really like working in the business, but don’t enjoy the operations and management, then perhaps you want to simply stay on and continue with clinical work. But if the opposite is true, then selling your practice may not be very fulfilling since you will lose control of business operations, yet you will continue with the clinical work. The advantage of selling to a retail group is that there may be career opportunities that did not exist for you before – like managing or coaching others who could benefit from your experience.
Thanks for reading – and a reminder that this information was offered as general education and should not be considered as financial advice. If you would like to meet with me virtually, please schedule a time to meet if you would like to explore selling your business.
If you found this blog helpful, please share it on social media!
