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You may run your own private medical practice, private clinic or employ others to deliver medical care through a limited company. Your business plan may one day involve selling your business and you may have asked yourself how do i sell my medical practice?. It is difficult to continue to maintain the high levels of customer satisfaction, patient care, manage your business and engage in the sales and negotiation process all at the same time. Here are some FAQ's as to the medical practice sales process and how we might be able to assist you to take the next steps.
Why would I want to sell my medical private practice?
There are numerous reasons why you might want to sell your private practice or clinic. It may be that you are retiring or you simply want to realise the benefits of all your hard work after having managed, driven and grown your business to the heights that it is today. You may have had exceptionally good growth over the last few years and want to realise the potential value that this data reflects in your practice.
How do I keep the sale of my private practice discrete?
We fully understand the nature of buying and selling businesses. It’s what we do! No doubt you will not want your employees to hear about any potential sale or colleagues to find out about how successful your private practice has been. Our process is simple and this is to protect your business and sell it for the highest value on the open market. All our marketing information that we will make about your practice will not contain details that may indicate who you are. We will only pass on potential buyers to you once they have been fully screened with confidentiality agreement in place.
How do you value my private practice?
This is the million pound question. As with any other type of business there are many types of valuation methods and ultimately the value of your business will be the price that someone is willing to pay for it. During our visit one of our team will talk you through the valuation process, the different methods of valuing a private medical business and give you a final figure based on the financial data that you provide. Ultimately it will be you that tells us how much you would like to market your practice at, however your figure will need to be guided by our valuation estimate and be consistent with reasonable figures for similar businesses that we have sold in this field.
What is the private practice sales market like at the moment?
There are always plenty of investors who are ready to buy into a profitable business so that they can see a return on their investment. If your business has shown good growth, profitability and has good ongoing potential that is not solely reliant on your services then there will be a buyer for you. We are always selling businesses in this field all year round.
What happens in the normal sales process?
You decide to implement your exit strategy from your business and engage in the sales process
You decide on either a direct sales process driven by you or to use the services of a broker
If you decide on the use of an experienced medical practice broker then you are guided through the remaining steps
You sign a letter of engagement with a practice broker. This legally commissions the use of the broker to act on your behalf during the sales process
You are visited so that we can look at your practice, value the business and ascertain all the required information that the buyer will want in order to purchase your practice
The broker works with you to produce all the documents required to successfully market and sell your practice. This will involve the preparation of a sales brochure and information pack about the strengths of your business. A full set of financial accounting data is also prepared however this is only passed onto fully screened buyers who are still interested in purchasing your practice after reviewing the marketing material.
You will review, make suggested alterations and agree to the marketing material on your practice
We market your practice and distribute to our database of already registered buyers
All buyers are fully screened and have signed a confidentiality agreement with us. We deal with day to day enquiries for information about your practice and screen for serious buyers with whom we subsequently introduce to you
When a buyer after reviewing the marketing and financial data wishes to visit your practice to look around we will make an appointment for them to visit you at a convenient time. This is to maintain the confidential nature of the sales process and not to disrupt the normal day to day workings of your business.
Offers to purchase the practice are made through us
We pass on these offers to you and help with the negotiation process based on our appraisal of the interest to date from the market about your practice. On some occasions we will proceed to sealed bids if there is more than one acceptable offer from more than one party.
A letter of acceptance subject to contract is sent to the buyer
The buyer makes a deposit to us to secure the removal of your practice from the market
The buyers legal representatives submit a heads of terms agreement which is agreed upon by both parties
The due diligence process occurs. We co-ordinate between both sets of accountants and legal representatives to facilitate this process and help the deal to progress as smoothly as possible
On satisfactory conclusion of the due diligence process a sale and purchase agreement is produced by the buyers legal representative. Once you are happy with this agreement both parties sign. Contracts are exchanged and the deal is completed
The agreed transaction value from the sale of your practice is wired to your account or solicitors account
The sales process is completed and it is time for you to enjoy the rewards for your hard work and plan the next steps in your life/career
Can I choose not to use a broker for the sale of my medical practice or private clinic?
Yes. A significant percentage of medical practices are sold directly without the use of a broker.
As the sales and legal process is both time consuming and stressful a substantial percentage of those who complete the sale of their practice individually have some regrets about this decision.
Will I be expected to work in the practice after the sales process?
This depends on the type of deal that is negotiated. In all deals there is a tie in period which is normally between 1 and 3 months. During this hand over period you will need to work with the new owners to facilitate the hand over of the practice. You may decide that you want to stay on in some other capacity such as a partner or silent investor. This naturally is your choice and depends on the underlying reasons for the sale.
Are brokers worth the commission fee?
We only get a fee on the successful completion of a practice sale. It is in our interest to get the maximum value for your practice in the market. It is believed that by using a broker approximately 10% higher market values are achieved than through the direct sales route. We also don’t charge you any up front brokerage fee. We only get paid by the results of our work. Because our fees are linked to a percentage of the sale then we also strive to get you the full market value at all times.
How long does it take to sell?
This depends on the type of practice, practice location, number of clients and the market demand. On average the process takes between 4-6 months from the day of marketing to complete however some practices have sold before this time frame
How do you differ from other practice brokers?
We value our individual approach to each practice sale. Here are some other key fundamentals to the service that we provide:
Free seller registration
Free buyer registration
Great website marketing exposure using state of the art techniques to get your practice to the greatest number of possible buyers in order to find you the right buyer at the right price
No marketing costs or journal advertising costs to you when we market your practice
No payment/fees to us unless your practice is sold
No lengthy tie in period to use us as sole agents. If you are not happy with us we don’t prevent you from achieving your goal of selling your practice.
Full guidance during the sales process as outlined above. We offer a full brokerage service to you
When can I expect full payment for the sale of my medical practice?
Once again this depends on the demand for your practice and the negotiation process itself. It is not common to get a completely clean break and receive 100% of the sale price upfront however this does occur occasionally. More typically you will receive a large percentage of the sale price and the rest on the first anniversary of the sale
What are warranties?
During the negotiation of the sale and purchase agreement the buyer will ask for you to agree some warranties about the business. The number of warranties and what they are there to protect depends on the type of practice and what the due diligence process has unveiled. It is normal for the buyer to want to seek some protection over issues and events that they had no control over prior to the sale. This may be relating to you promising that you have correctly dealt with VAT,HMRC, PAYE and any outstanding claims or legal issues relating to events prior to the sale. If after the sale process there is a claim for outstanding fees/taxes then the buyer could pass this claim onto you. This would be referred to as a claw back. There is however some room for manoeuvre so if there are any outstanding issues you can disclose this to the buyer during the negotiation process. If they proceed with the deal having full knowledge of any issues then they proceed at their own risk and any mitigation from the disclosed item will stay with them.
I want you to sell my medical practice. What do I do next?
Please contact us so one of our members of staff can be allocated to deal with you and advise you on the above process.
Please note if you are a medical practitioner we will need to confirm your GMC number with the General Medical Council for due diligence purposes
