5 common deal breakers for healthcare professionals

Selling your business can be quite time consuming and can distract business owners from focusing on their practice. Business owners who become distracted by a sale process spend less time focused on production and generating revenue. A decline in financial performance during a sale process can significantly impact your ability to successfully set yourself up for selling. This makes it imperative to have an advisor helping you with the sale process so you can keep your business running smoothly at the same time.

The effect of the COVID-19 pandemic on the sale of healthcare practices remains to be seen, but it's likely that values for most practices continue to be consistent with pre-COVID levels.

While some healthcare professionals work on their own, a number of them work together in a group setting. This can be a problem if you want to sell and the other practitioners plan to stay. In an ideal situation, it's important to have a succession plan in place with all stakeholders aligned before exploring a sale.

People are creatures of habit. When it comes to their health, they value having the same doctor, dentist, therapist, etc. Given this is a people and relationship-driven business, a common deal breaker is not having the appropriate succession or transition plan in place; buyers view practices without a proper transition plan to be quite risky. It's best to ensure you have a transitionary plan in place. Key personnel will stay on once you leave, which will help reassure a buyer that the same team will continue to serve patients. The right time to sell is when you still have the bandwidth to do so. Leaving quickly with no succession plan can lead to value deterioration. Having an associate practitioner in place to work by your side years in advance of a sale will give a buyer peace of mind.

The Canadian healthcare market is largely publicly funded. As government regulations change, so will a practitioner's revenue model. The impact can be significant—either negative or positive, depending on what changes. For doctors, this is a larger risk than it is for other healthcare professions who get paid by patients directly or through their private insurance.