Navigating the Sale of Your Private Practice: Challenges and Solutions for Sole Traders and Lifestyle Business Owners

29 Mar 2023

Introduction

The healthcare sector is full of passionate professionals dedicated to the well-being of their patients. For many private practice owners, like physiotherapists and osteopaths, their clinics are not just businesses, but extensions of their values and commitment to care. As a result, the process of valuing and selling their practice can be difficult and emotionally taxing. In this insight, we explore some of the hurdles sole traders and lifestyle business owners face when it comes to selling, and how to overcome them.

Valuing Your Practice

One of the first challenges of selling a private practice is determining its value. Unlike many other businesses, healthcare practices rely heavily on the expertise, reputation, and personal relationships of their practitioners. In the absence of a wider team, these may be solely linked to the owner. This makes it challenging to assess the business’s worth in monetary terms alone.

Solution: To accurately value your practice, consider working with a specialist business broker or valuation expert who understands the nuances of the healthcare industry. These professionals can help you identify and quantify your practice’s tangible and intangible assets, including your client base, reputation, and professional network. Additionally, they can offer guidance on industry-specific factors such as location, scope of services, and growth potential.

Emotional Attachment

Selling your practice can be an emotional process, as it often represents years of hard work, dedication, and personal investment. Many practice owners struggle with the idea of handing over their business to someone else, particularly if they’ve built strong relationships with their patients.

Solution: To ease the emotional impact of selling your practice, begin preparing for the transition early. Develop a clear succession plan and get professional guidance to ensure a smooth handover. You may also want to focus on finding a buyer who shares your values and commitment to patient care. This can help provide reassurance to your patients and ensure your legacy.

Finding the Right Buyer

Identifying the right buyer for your private healthcare practice can be a daunting task. You want someone who is competent, trustworthy, and shares your vision for the business. However, this can be especially challenging for sole traders and lifestyle business owners, who may have limited experience in marketing and selling a business.

To make matter worse, the pool of buyers for this type of business is often smaller. Unlike larger clinics for sale, you are typically targeting individual clinicians who want to take on a caseload and run their own practice or a local competitor looking for extra market share. Clinicians willing to buy a practice can be hard to find and reach and you may have reservations about approaching a local competitors.

Additionally, sale prices usually reflect the risks and size of a practice. Smaller practices often command a much lower sale price than larger businesses, making the use of traditional brokers cost-prohibitive for some practice owners. This can present a barrier to accessing the right expertise and reaching a wider audience.

Solution: In response to these challenges, business brokerages like Verilo have introduced a small business package specifically tailored to the needs of sole traders and lifestyle business owners. This package enables healthcare practitioners to benefit from industry expertise and reach a wider audience at a more affordable, fixed cost.

Business Continuity and Patient Retention

A common concern among practice owners is whether the sale will result in a loss of patients or a disruption to services. This can be particularly worrisome for healthcare practitioners, as patient trust and continuity of care are essential to the success of the practice.

Solution: Develop a comprehensive transition plan that outlines how you and the buyer will work together to ensure a seamless handover. This may involve a period of joint management, during which you will continue to see patients while gradually introducing the new owner. Keep your patients informed about the upcoming changes and reassure them that their care remains your top priority. Maintaining open lines of communication can help ease patient concerns and foster trust in the new owner.

Legal and Regulatory Compliance

The sale of a private healthcare practice involves a multitude of legal and regulatory requirements. Ensuring compliance can be complex, particularly for sole traders and lifestyle business owners who may lack the necessary expertise.

Solution: Engage a legal advisor or consultant with experience in healthcare transactions to guide you through the process. They can help you understand the specific requirements for your profession and region, as well as advise you on contracts, employee transfers, and other legal considerations.

Conclusion

Selling a private healthcare practice can be a challenging and emotional experience, particularly for sole traders and lifestyle business owners. By seeking professional advice, developing a clear transition plan, and focusing on finding a buyer who shares your values, you can overcome these hurdles and secure a successful sale. In doing so, you will not only maximize the value of your practice, but also ensure the continued well-being of your patients and the legacy of your hard work.

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