Three real seller stories that may surprise you.
One of the top questions health care brokers hear is, “How long will it take for me to sell?”
The short answer is – selling your practice takes between six months and a year.
The long answer is it depends. How long it takes to sell your practice depends on
- what you want (walk away deal, equity options, etc)
- how clean do you keep your books?
- terms that matter to you (lease assignments, guarantees, and more)
It can be hard to envision how all of these factors play out, so below, we pulled together three real seller stories and plotted their timelines.
Dr. M And Dr. P – 88 Days
Practice Type: General Dentistry
Seller Type: Young entrepreneurs
Post-Sale Plan: Focus on other things
Deal Summary: Clean books, fabulous location
Dr. M and Dr. P both owned separate, successful practices and partnered to open a joint office in Houston’s gorgeous Galleria area. But not too long after opening, they found people management challenging while staying active in their other offices. They hired Practice Transitions Group to sell the practice so they could go back to building their original locations.
Lauren Wheeler, the lead dental practice broker on the deal, ran PTG’s underwriting process efficiently, which she was able to do because PTG has its underwriting team in-house. Through Practice Transitions Group’s online listings platform, a group of dental entrepreneurs discovered the opportunity and made a cash offer, one of several the sellers received. Dr. M and Dr. P sold their practice in less than three months and now practice full-time in their first locations, which are thriving.
Dr. C – 6 Months
Practice Type: Primary Care
Seller Type: Seasoned practitioner
Post-Sale Plan: Retire
Deal Summary: Sophisticated practice, high-performing practitioners, but a non-responsive CPA and a last-minute restructure
Dr. C loved practicing medicine but well into his seventies, he knew he needed to sell his practice. He completed PTG’s Valuation Calculator and reached out directly after seeing the results come back valuing it at millions over what the local hospital system had offered him a few years back.
Taylor Fyfe, a PTG partner, and Dr. C’s deal leader kicked off the process but struggled to connect with the doctor’s CPA. It took a month of calls, texts, and emails before the CPA finally connected PTG’s underwriting team with the CPA’s responsive assistant. Less than a month later, PTG listed the practices, and offers began rolling in. After the practice went under contract, negotiations took about two months.
At the tail end of the deal, the buyer requested extra reporting from the insurer who managed the Medicare portion of Dr. C’s business. Taylor arranged a holdback to close the deal, and that restructuring took time.
Selling your practice may only take six months – see Taylor’s take and Dr. C’s story here —
Dr. D – 1 Year
Practice Type: Dental specialist
Seller Type: Experienced practitioner looking to take advantage of the market
Post-Sale Plan: Post-partnership commitment of less than five years, then retire early
Deal Summary: Incredibly profitable practice, with a brilliant owner who couldn’t see past worst-case scenarios
Dr. D ran what’s known as a tight practice. She only had three employees, and working less than full time, produced millions each year. A competing practice brokerage brought her a good deal, but it included a five-year work commitment and she wanted to retire early. So, she called PTG.
In less than three months, Thomas Allen, PTG’s founder, and CEO, located an incredible partner. The group increased Dr. D’s original cash offer, and only required her to stay for two years. But what if she wanted to leave even earlier? What if a worst-case scenario happened and the new partner-buyer found her liable? Paralyzed by this kind of thinking, Dr. D let her multi-million dollar offer sit for four months before she signed the LOI. Then another clause about liability sent her into a spiral. She hired multiple lawyers who struggled to assure her the scenarios she was afraid of simply didn’t exist. With great skill, Thomas kept the buyers interested, and about one year after she called PTG, she signed a life-changing deal with a national corporate partner.
Summary
As you can see from the examples above, various interests, terms, and team members impact the speed of a practice sale or partnership.
Whether you’re a young entrepreneur, ready to retire, or perhaps a few years out but don’t want to gamble when the market is so favorable, plan on selling your practice or partnering with a group between six months and a year after signing with a broker.
