If you have reached the pivotal decision to sell your healthcare practice — be it for retirement, strategic business expansion, or any other purpose — there are detailed steps you can take to ensure a seamless and successful sale.
At Fenton Law Group, we offer top-tier legal advice as you sell your practice and complete the transaction successfully. That said, you can find an outline of the basics below in our Selling Your Healthcare Practice 101 guide. The more familiar you become with the process, the easier it will be to carry out the sale smoothly.
Here is a list of initial steps to take when selling your healthcare practice.
Before selling your healthcare practice, gather and arrange financial and legal records to expedite the sale process. These documents will help buyers weigh the pros and cons and determine if they are interested in purchasing the practice based on financial and legal competence.
You will want to collect financial records such as profit and loss statements, balance sheets, tax returns, accounts receivable and payable, and more. You should also gather legal papers that demonstrate that the practice follows healthcare industry rules and regulations and has the proper licenses and certifications.
Let’s say the practice is failing to operate within legal parameters and abide by healthcare industry standards. Potential buyers will be less inclined to take over the practice because they will not want to deal with the accompanying legal issues and liabilities.
First thing first: If you want to be able to sell something, it needs to be of value. A valuation expert who specializes in healthcare can help you determine the fair market value of your practice. Some factors to consider when obtaining a valuation of the practice in the healthcare marketplace include, but are not limited to:
Pro tip: Once you determine the valuation of the practice, you will want to sell it when it hits its peak value.
You do not want to sell your practice to someone who lacks relevant experience and the proper financial resources. The buyer should be someone to whom you can confidently hand over your practice.
A buyer needs healthcare industry experience that includes managing healthcare entities. They also need to have enough money to help the practice succeed. At the end of the day, you want your practice to continue to thrive while maintaining the foundational values and reputation.
Reach out to interested buyers to get down to the nitty-gritty details of the sale. The more transparent you are with buyers, the more seamless the transaction will be. Negotiating the terms and conditions might include in-depth discussions surrounding:
Allow the buyer to conduct due diligence – the process of conducting an investigation, review, or audit to verify facts and information – before acquiring a company. In order for them to do so, they will need access to financial and legal records to thoroughly assess the practice’s operations, finances, and legal compliance.
Due diligence is a thorough assessment that helps buyers decide if they want to acquire the practice. If you followed the initial step, you should already have an organized file containing all of the necessary documents.
Our healthcare lawyers can assist you in creating a comprehensive sales agreement, which outlines the agreed-upon terms and conditions. You want to ensure that both parties are crystal clear on the exact rules and responsibilities of the transaction.
Once both parties sign the deal and the sale is completed — congratulations! — you have officially sold your healthcare practice. Transfer ownership, assets, patient records, billing systems, and necessary documents to the new buyer for a successful continuation of the practice. Stay in touch with the buyer to answer any questions they may have during the beginning stages of ownership.
Fenton Law Group has a team of seasoned healthcare law lawyers who can walk you through the transaction process step by step. They can assist with valuing your healthcare practice, updating the sale agreement, and finalizing the deal. Fill out our contact form on our website today to connect with a healthcare practice attorney.