3 Questions Every Owner Should Ask Before Selling Their Practice
By Dan Espinal, Co-Founder and CEO
Be assured, you have an asset that is very desirable. You deserve to feel like a proud parent of your practice. You have raised something very special and I appreciate how hard it is to set sights on a new destination. But let’s take a moment to review the flight instruments— the key questions that have helped practice owners just like you embrace this important milestone in their lives.
Where am I going?
If you are thinking of selling your business, you need to understand what you are trying to accomplish. This is something only you can answer. What are you trying to achieve? Are you trying to optimize retirement? Are you trying to preserve your legacy? Are you on a one-year or five-year horizon for your exit plan? The most important thing with any deal is knowing what YOU want.
For example, if you are looking for more upside, then you might consider a more structured transaction with an element of variable compensation, or something in the future. If you want certainty and plan to leave the profession sooner, you may place a premium on full payout, though the total potential proceeds may be much lower.
What do I want?
Knowing what you want may seem like an obvious player in the selling process, but I will tell you it often gets lost in the shuffle. Brokers, accountants and tax advisers often miss this fundamental point when talking with practice owners. For example, a broker will steer you to maximize price. A lawyer will push you to minimize risk. An accountant will urge you to optimize taxes. But here’s the thing: It is not just about maximizing finances, minimizing risk or optimizing taxes. None of those things matter if you do not know what you actually want, because (you may hate to hear this), sometimes those factors are at odds with each other. Sometimes the best decision for your life comes with the most risk. In fact, most of the time, that is how it works. And that is okay! It is a good thing because it means you are achieving YOUR dreams.
Another example: A million dollars may or may not change your life, but three of four, could really move the needle for you and your family.
Who is flying the plane?
You are the pilot. You are flying the plane. One thing I can never tell you, nor should anyone force on you, is what you want. We welcome the opportunity to be your co-pilot and help guide you through air pockets to help optimize your dreams, aspirations and whatever you are trying to accomplish.