You know that one day you’ll retire and leave that medical practice you started in Northern California. You’ll have more time for fishing. Or traveling. Or playing with the grandkids.
It’s great that you’re thinking about a fun future. But have you thought about your succession plan? It’s never too early to do that, and with the demographics of today’s medical community, it should become a priority.
Physicians Practice reports that among all licensed physicians, 54 percent of them are over age 50. Another 31 percent are older than 60. That’s according to the Federation of State Medical Boards.
So, what should doctors be doing to plan for retirement?
- Create realistic expectations about how much their practice is worth. Many physicians think their practice has a value far greater than it really does. Working with an attorney or valuation expert in advance can help them to get an accurate value well in advance of retirement, so they can plan accordingly.
- Bring in a younger partner or have the new owner join the practice well in advance of a sale. That will give patients a chance to get to know the new doctor and aid in patient retention. That will help to retain the value of the practice.
- Determine how the transaction will be structured. Will it be a stock purchase or an asset purchase? Again, an attorney or trusted adviser can assist with that.
- Be prepared to comply with medical records laws. A succession plan needs to create a legal chain of custody.
A well-prepared succession plan will help to protect the practice and get the most from its assets for both the seller and the buyer. What’s better than a profitable and smooth transition into retirement?