Before you can maximize the value of your practice, you first have to weigh your options and create a plan that is sure to work. The best way to do this is by performing a strategic analysis of your practice early on, and then laying out your expectations for the next five years. Here's what you should be looking for:
Gather Your Records
The first thing you need to do is gather up all the records you have concerning your assets, inventory and performance. Before you even begin looking at the contents of your records, now is a good time to think about whether or not those records give you a complete picture of your practice. If not, you may need to update your record keeping practices to include more comprehensive information. When you are ready to sell, your buyers will want to see a complete set of records and this is your chance to paint a great picture.
Examine Your Equipment and Resources
Make a list of items that have become obsolete or outdated. Next, make a list of items that need repairs or upgrades to remain useful to the practice. Prioritize these items so that you can get them fixed as part of your long-term plan, and they should all be in good working order at the five year mark. If you happen to be keeping outdated drugs in your pharmacy, now is the time to clean them out as well. Don't give buyers the impression that you have neglected these things.
Begin Thinking About Your Finances
When it comes to selling a practice, you need to demonstrate positive cash flow otherwise buyers may feel like your practice is too much of a risk. However, your taxes are not the best way to look at your finances because there are many write-offs and tax adjustments that do not apply to your actual cash flow analysis. You may consult your CPA about these topics, but know that they are working to reduce your tax liability, not boost your cash flow.
Play out Your Options
Take some time considering which upgrades and changes need to be made in your practice. Compare them side by side to see which ones will give you the greatest boost in valuation and performance. Again, work these tasks into your five-year plan so that they can come to fruition in time to sell.
The strategic analysis is really designed to help you clean up the little things that you've gotten used to about your practice, and make a positive first impression on buyers. However, it is a five-year strategy, not an overnight fix, so you need to be thoughtful in your planning.