Blog, Live Events May 2, 2021

Selling Your Practice…Now, Next Year, In Ten Years?????

Click here to download the transcript.

Disclaimer: The following is an actual transcript. We do our best to make sure the transcript is as accurate as possible, however, it may contain spelling or grammatical errors.

Well, hello everybody. Thank you so much for taking some time to spend with me today. I’m Dr. Randi Ross. I’m a premier practice consultants, and let’s give a little bit of a shout out to ChiroSecure for always hosting these events. It’s so important that everybody stays connected to things that are really valuable to building or business. So today, what I’m going to talk about is giving you a few things to think about as far as, um, you know, selling your practice. And, and a lot of people are saying, Oh, you know, I’m first in practice, or I’m only here five years or 10 years, not something that’s really important or valuable to me, but what I’m going to share with you really kind of changes that mindset. It gives you a little bit of a shift because whether you think you’re going to sell your practice now in a year or 10 years or 20 years, there’s things that you can be doing that you can really hopefully protect getting the most value out of the sale of your practice when the time is right.

So one of the things we find a lot of things that people do wrong, and I’m going to hopefully get you to correct some of those things. Um, and this is always coming from the, the, you know, the mindset of you’re a business owner, you’re a business entity, and there are certain things that you should always be doing to keep your busy, excuse me, business positioned properly. We call it always being market ready. Um, and unfortunately, sometimes what does happen is people are not thinking about selling. It’s not something that is really, you know, on your radar for the near future, but unfortunately, sometimes things happen and sometimes people get injured or hurt. You can get sick. And obviously the worst is unfortunately, sometimes people suddenly pass away. So always knowing what the value is of your business at any given time and being prepared.

And that’s where Michelle A. Little bit off today with you is really so important to take some notes here and hopefully you’ll get yourself in that better position by the time we’re finished here today. So one of the things that we notice often is people often don’t have their, what I call their business finances, really up to date and current at all times. And it goes beyond a tax return. Obviously all of you as business owners, you know, file a tax return and hopefully most or many of you have P and L’s are what we call profit and loss statements. Um, those are important to keep up to date, not only yearly, but even as each quarter evolves, you should really make sure that you’re going to your accountant and you’re keeping all those things up to date. And don’t skimp on that. Having a good accountant is invaluable and they can really help you keep a lot of these financial documents kind of current and available when, and if they’re ever needed.

Um, certain other pieces of, you know, I consider it under the umbrella of financial is, you know, your equipment and what is your equipment worth. And a lot of times people have trouble understanding that, uh, you know, what is the actual value of my equipment? You know, I have a, a table that’s two years old in one room and I have, you know, a high, low with drops. That’s 10 years old and another war room. What is the actual value in really understanding the, the real time value of your assets is something that you should really keep again up to date, take the time to update that every year and keep it current.

And don’t overvalue

Things, um, because that’s never going to serve you. Uh, typically this is another thing that your accountant can help you with because they’re doing all those taking depreciations and stuff, um, as time goes by. So that’s, that’s important to keep up to date as well. The other thing that, um, people often struggle with, that’s an important part of really keeping everything current for your practice, whether you’re, again, you’re selling this year five years, 10 years, whatever it might

Be is understanding

Your overhead. I have to tell you, I talked to many, many doctors every week, and one of the biggest challenges is really understanding, um, what it costs them to run their business, a big challenge for a lot of people. Uh, and I, I think probably one of the biggest, uh, pieces of that puzzle is often as small business owners, you are legally allowed to write off certain things that might actually fall under the umbrella of personal information or personal finances. But as a small business owner, you can write those offers a deduction. What happens is they make you look like you have less profit, which then you don’t pay as much taxes, but when you have to go to sell your practice, that has the flip effect one you’ve now lowered the profit that your business makes until you increase your overhead. So having a, what I call a real time expense of what it costs to run your business, you know, again, something just for you is so important, a to understand, and B to really have that as an accurate up-to-date real time list.

And it often changes it can be a moving target. So that’s something you should really explore from time to time. And that kind of, you know, encompasses when we talk about, Oh, you know, again, when I say having your practice market ready at any given time, uh, is in these are important pieces of financial information. And then of course, there’s all the stats that I don’t have to teach you guys, you know, the, the new patients and the office visits, and, you know, the, the breakdown, I don’t know if your different services and all those things are important to keep updated, and you should understand those as the business owner, this should not be pieces of information that, you know, only in office, his manager, as someone else understands, you should be reviewing it and be able to kind of reproduce that information if, and when it’s ever needed.

It’s a good idea to keep all of this somewhere. As I said, unfortunately, we get calls frequently more frequently than I would like about from a family member or, um, you know, a CA that someone suddenly passed away and they have no idea where anything is, you know, and just like you’re prepared when you have a will or anything attached to an estate that people know what to do. If something happens, your business should have the same type of respect that people know what to do. If something happens to you and we’re not Keno floundering and have to become investigators to figure out exactly what your business was doing and where that information is that a potential buyer would need to do their due diligence on to see if this is something that they want to do. And it really has a huge impact on the families when this is all organized.

And in order your staff, when you’re selling your practice, one of the variables is a staff that’s well-trained and tenured in place. Yes, there are some times where people want to bring their own staff and team members, but more often than not, I’ll say probably 90% of the time. They actually want your staff to stay on board, to be excited about a new buyer. And the potential that goes with that can, you know, new energy that comes in, um, and the buyer wants them to stay on board. They know the way the practice has been running. They’re, you know, they’re skilled and proficient in that they know the patients. Um, and we actually, when we do a transition in a, in an acquisition, we have a specific training just for how to, um, introduce the staff to an income doctor and what they should, and shouldn’t be saying, so Stanford are really valuable.

So keep your staff well trained, um, and understanding the, the different parts of your business, um, and, and making sure that there is a way for them to, I’m trying to think of the right way to say this almost kind of, um, uh, seamlessly, you know, continue to do their services with someone else that might be the owner or take over the practice. Um, so keeping staff up to date, keeping them trained, keeping them motivated. These are all things that really are so valuable. Um, when we’re continually positioning or business, obviously it helps you when you are there as well. One of the other things that is really important that seems to be lost on a lot of people is what I call the aesthetics of your office. Um, and these really need to be updated today. I would say anywhere between every five to seven years, um, it doesn’t have to be a huge expense, but aesthetics change just like if you own a home and if you were going to sell your home and it hadn’t been updated in 10 years, chances are, you’re going to put a coat of paint on there.

You might even upgrade, you know, the countertops in your kitchen and your bathrooms. You might do a whole refurbish. Well, your practice has the same type of element in there. And too often, we see practices that have not been updated in not only five to seven years, but some of them decades, uh, and you have, you know, uh, green walls and Brown chairs and, you know, a dark gray carpet. And does it function for you? Does it impact your business? Probably not. Maybe there are some people that are a little turned off by that, but I can tell you when it comes time to sell your practice, it’s statics today, more than ever, or really important. And, um, buyers are often looking for what I call the new model of healthcare offices. And they’re a little bit, um, spa-like or more of your waiting area, be more of a living room feeling.

Um, they’re, they’re, they’re, we’re getting away from that very sterile type of systematic chairs in a row, a coffee table with some, you know, magazines thrown on it. Uh, we really have gotten away from that, and there’s some great designers in our industry that really do amazing things. And if you don’t have a budget for that, any of your local decorating stores will often be there to help you out as what are the colors that are being used now, you know, what types of furniture are, you know, more systemically, pleasing, and comfortable to people. And, and I can tell you, this is probably one of the biggest, um, kind of pushbacks we get when someone goes to actually visit a practice that we’re selling is they often come back and say, that practice needs a facelift really bad practices in bed. You know, it’s, it’s doing, it’s making money.

And sometimes that someone’s positioned, well, why should I, you know, five, 10, $15,000 in updating or face lifting my office, I’m making money? Well, because in today’s environment, it’s something that has become an important piece to the puzzle of when you’re going to sell your practice. So, and, and also minimize the personal touch in your office. Sometimes we see, we see practices that are so personal and so individual, um, and again, I’ll kind of relate that back to real estate. You know, often when a realtor comes in, they’ll have you minimize how much, you know, personal things are on the walls, or, you know, displayed out, uh, you know, in the area, obviously if there’s, you know, something that you’re attached to in the community and you received awards or things like that, that’s fine. But sometimes people go too far. And if there is something that they have a passion for, they kind of flood their office with that.

And that’s really a turnoff to a buyer, um, and can sometimes even be a bit of a turnoff to new patients as they walk in. It’s kind of like, Whoa, you know, it’s almost like, you know, an overwhelming amount of neurological information coming in. So we say, if it’s a fresh coat of paint, um, and, and carpeting, if that’s the bare minimum you do or flooring, most places aren’t even using carpeting anymore. They’re using various kinds of flooring, whether they’re, um, kind of a vinyl or tile or, you know, different types of materials, depending upon where you are, might be the different types of materials that you use. So when I was in practice, we carpeted our offices. You know, today that’s not the style, that’s not the aesthetic. And it’s definitely something not very important for you to be on top of, you know, I don’t care if you’re in practice two years or 40 years, you should always be putting your best foot forward of how your practice looks, and it does have an impact on patients.

And they do talk about that. And when you are ready to sell, whether by choice or not, I want someone to walk into your office and be like, wow, this is a nice practice before they’ve looked at anything else, just looking at again, the overall aesthetic of w you know, when they walk in, what does it look like? Uh, so that’s a really important thing to stay on top of, we have a lot of, a lot of people that we have a challenging conversation with about that, but if you’re doing it on a regular basis, then it’s not a challenge to you. It’s just a part of anything else that you do. You upgrade computers, you, you know, you might, um, change, you know, to a better software program. This is, should be part of that same mindset. You know, it’s time for me to update my practice.

And what are the last things that, you know, I want to talk about, and it kind of pulls of this together is, you know, always being prepared. You heard me talk about that, um, a few moments ago, and I, and I think often, you know, most of us think nothing’s ever going to happen to us, or, you know, I’m definitely not going to sell for another decade and I don’t have to worry about these things, but, you know, that’s not a good way to run a business. And any successful business has different plans in place. One of the plans they have in place, even if they’re young in that business is some type of exit strategy. And that’s a little bit about what I’m talking about today is you should always have a plan because, you know, again, sometimes life happens and our exit strategy is forced upon us.

One of the best ways to really have a feel for, for, okay, what is my practice worth today? And then staying on top of that. And, and it works in a couple ways. One, it gives you that, uh, what we call evaluation report to really understand, you know, what my practices were because, you know, some of us are often a little surprised upon presenting evaluation that maybe the practice isn’t worth as much as they would thought. Sometimes it worked with, as they thought, sometimes it works the other way, but what that also does, it’s another tool to give you a guide as to where do I need to go? You know what I mean, here? I want to be here. You know, what are some of the things that I need to do to get there? And often people think, well, I do stats that gives me all the information I need.

And I’m here to tell you, it’s, it’s a, it’s a different model of evaluating your business. So one of the things that we’re going to offer here, um, I know our website is up there. The easier one is just And if you want to go to, when you land on the home page, there’s a little blue button that says, intake asks you a couple of questions, and then, um, and there’s a code that you can put in on the bottom. And if you just put may 20, 21 in the code, we’re going to actually give you 25% off for being here on the ChiroSecure call today. And it’s, again, it’s a great tool, um, for you to understand the current market value of your practice, as well as a good look at what do I need to do, or what would I like to do?

What profit centers can I add to increase this value in the next five years when I’m going to most likely be looking at retiring. So it, it really is a valuable tool. We have our clients update them every year so that you really always know what’s going on. Well, that’s it for me for today. I hope that I got you thinking a little bit differently about, um, the ultimate sale. Well, and your practice. You know, whether it’s now five years from now, 10 years from now, at some point you’re going to take, you know, this, this thing that you birthed over many years and gave your blood, sweat, and tears to, and want to recoup that value, whether it’s to invest in another business or practice, or ultimately retire for your family. And there’s a lot of great tools, some of which we’ve shared here today, that can be useful to you as far as staying on track and hoping that you get the most that you can for your practice when that time comes to sell well. I’m Dr. Randi Ross. You could always reach out to me if you have any questions about what we talked about here today, um, go to our website, put in that code May, 2021. And, uh, we’ll give you a 25% off evaluation report. And again, give you that good picture of what’s going on in your practice today.

Join us each week as we bring you the best in business growth, practice management, social media, marketing, networking, leadership, and moms more. If it’s about women in practice and business, you’ll hear it here. We hope you enjoy this week’s Facebook live event. Please like us on Facebook comment and share. We look forward to seeing all of you next week for another episode of empowering women in chiropractic. Now, go ahead and hit the share button and tell your friends and colleagues about the show. Thank you for watching. Have a beautiful day. This has been a ChiroSecure production. [inaudible].