Apr 9, 2019

Expectations When Considering the Sale of Your OBGYN Practice

When you know, you know. If you have been a practice owner for a significant period of time, you may have felt that proverbial itch to sell the practice, retire and pursue other personal passions. That is, after all, the goal of most small business owners. But let’s say you haven’t felt that urge. You’re comfortable with your current professional situation, you enjoy owning your own practice, and you still have another 5-10 years before you’ll be willing to pass it on to the highest bidder.

Good. Because you need at least five years to prepare for the sale of your practice!  

Generally, the more successful your practice is, the easier it should be to find a willing buyer. However, there are more factors at play. There is a very specific sect of buyers who are interested in purchasing an OBGYN practice. Of the thousands of physicians in the United States, there is maybe a handful that would be interested in buying your business, in your town, for your price. And of those, an even smaller percentage would actually follow through and complete the sale. To convince that tiny population of potential buyers, you need to thoroughly prepare your business for its sale — and that takes time, strategy, and investment.  

Take Your Time

Selling your practice is a process measured in years, not months. To appropriately plan, assess, and sell your small business, you should be prepared to devote five or more years to the process.

Get an Appraisal

A third-party valuation of your business’ worth will give you confidence when it comes time to determine your asking price. A practice appraisal will provide a picture of what your practice is worth in the current market. Appraisals are also useful to ensure that your practice is properly valued should the unexpected happen, such as a debilitating injury or an unexpected associate buy-in.

Realistic Expectations

Your business also has a personal value, and it is very likely that that value will be higher than the actual asking price. It’s natural for a business owner to artificially inflate the value of his or her practice. After all, you have sacrificed a lot to ensure the success of your business, and it is easy to exaggerate its value given all the long hours and significant personal investment. Keep this in mind when you take receipt of your appraisal and begin the process of determining your asking price. A typical value could be in the range of three to five times earnings before interest, tax, depreciation and amortization (EBITDA). EBITDA is a common measure from financial analysts and should help you set realistic expectations for the sale of your practice.

Keep Your Equipment at its Best

Of significant value to your practice is the equipment inside. The inclusion of up-to-date technology and equipment is a positive selling point that may just incentivize a potential buyer to pull the trigger for your asking price. Just as a kitchen renovation or updated curb appeal can reap return-on-investment rewards in the home-buying market, keeping your professional equipment up to date is a good tactic for convincing a hesitant buyer to sign on the dotted line.

Ensure a Smooth Patient Transition

An inherent value of your practice is your patients. You’ve worked tirelessly for decades to provide friendly, professional services that have endeared you to the community you serve. You are the face of the practice — which is why it will be important to the buyer that you help transition patients to his or her care after the sale. Be prepared to address this factor in the sale. Your buyer certainly will.

News/Insights

How to Handle Negative Patient Reviews Practice Management

How to Handle Negative Patient Reviews

Oct 7, 2021

Bad reviews are a part of the landscape in a digitally connected world, but they can hurt your practice and your ability to attract employees. What do you do if you get a bad ...

OBGYN’s: Tips for Successful Mentoring Practice Management

OBGYN’s: Tips for Successful Mentoring

Jun 9, 2021

Being a mentor has many rewards, but like every other skill you have achieved in your career, it requires attention, the ability to adapt to a situation, and a willingness to ...

Breach of Contract: What Happens Next? Offers/Contracts/Compensation

Breach of Contract: What Happens Next?

Jul 1, 2020

Most practices have some type of contract with associates. For the most part, these agreements work well. But sooner or later, you are likely to have an employee seek to leave...

Rebooting Your Practice After the Virus Practice Management

Rebooting Your Practice After the Virus

Jun 11, 2020

The coronavirus pandemic has had an enormous impact on the OB/GYN industry. We saw one of the biggest unemployment rates of any industry with thousands of jobs lost, but now t...

Perks That Don’t Always Work Practice Management

Perks That Don’t Always Work

Mar 4, 2020

As a practice owner, you're probably already aware that you can save yourself a lot of headaches if you can retain good employees instead of retraining new ones. While employe...

Building an Employer Brand for Your Practice Practice Management

Building an Employer Brand for Your Practice

Feb 19, 2020

Unless your practice exists in a place where there is virtually no competition, you probably already understand the importance of branding in terms of attracting new patients....

Alternative Holiday Celebrations That Will Delight Your Team Practice Management

Alternative Holiday Celebrations That Will Delight Your Team

Nov 27, 2019

How times have changed. For some professional organizations, the big holiday party no longer has the same appeal as it did in years past. An open bar can present more legal an...

Does a Toxic Office Environment Impact Your Bottom Line? Practice Management

Does a Toxic Office Environment Impact Your Bottom Line?

Jun 11, 2019

Studies have demonstrated that office culture and the relationships developed between staff play a major role in job satisfaction and employee stability. In an interview with ...

Hiring ETS OBGYN vs. a Broker to Find a Buyer for Your Practice Hiring

Hiring ETS OBGYN vs. a Broker to Find a Buyer for Your Practice

May 21, 2019

We’ve told you how best to prepare for the sale of your practice and hope that the processes we’ve outlined have helped you prepare. Now it’s time to sell and ETS OBGYN ...

Infographic: How to Modernize Your Employee Review Practices Practice Management

Infographic: How to Modernize Your Employee Review Practices

Jan 29, 2019

In today’s lean, fast-changing world, traditional business practices are being shaken up. One business practice that many companies are revisiting is the annual review p...