Abstract: A series of editorials detailing the obstacles and strategies available to medical professionals who wish to monetize the value of their practice prior to retirement.
Lesson 1: The first rule of owning a business is always be prepared to sell.
In an environment of evaporating Medicare reimbursements, changing insurance market places, and an aging baby boomer population of medical professionals many doctors are searching for the light at the end of the tunnel. However, at the same time, many practices have established customer bases of baby boomers close in proximity to their age preparing for the eventuality of failing health and in search of a provider that will suffice the care for their escalating maladies through assisted living, palliative, and hospice care. In other words, while you are planning for retirement your patients are preparing for a higher level of care; therein lies a business opportunity if you can monetize the value of your practice.
Most medical practitioners are familiar with the common sense approaches for succession planning. You can partner with a younger practitioner three to five years prior to retirement. You can join a group and participate in a multiple party buy out. You could potentially shop the practice in its entirety to a third party, although this approach may negate your most valuable asset; goodwill.
But when it comes to the mechanics and financial tools available to facilitate a smooth transition doctors, like the majority of the population, and financially illiterate.
The route you take to transition into retirement and monetize the value of your practice is dependent on personal, geographic, and time constraints. However, the first step to a successful succession is knowing the value of your practice.
Click Here to read Lesson 2: How Do I Determine, and Convince Someone, of What My Practice is Worth?
Click Here to Read Lesson 3: Well, I’m in the Market…and That’s Scary
Samuel P. Boyd is a CFP® and registered investment advisor based out of Capital Asset Management Group's Bethesda, MD headquarters specializing in retirement planning, risk management, and succession planning for closely held business owners. He can be reached via email at firstname.lastname@example.org
Securities licensed associates of Capital Asset Management Group Inc. are Registered Representatives offering securities through Cambridge Investment Research, Inc. A Broker/Dealer. Member FINRA/SIPC. Licensed administrative associates do not offer securities. Investment advisory licensed associates of Capital Asset Management Group Inc. are Investment Advisor Representatives offering advisory services through Capital Investment Advisors, Inc. A registered investment advisor. Capital Asset Management Group and Capital Investment Advisors are separate and unrelated companies from Cambridge.