How do I sell my chiropractic practice? It’s a question that most chiropractors eventually ask. And anyone who has done it before will certainly agree with me that there is a bit more to selling your chiropractic business than placing a “chiropractic practice for sale” ad and waiting for the right buyer to drop in your lap!
After all, you’ve seen the ads. Most usually say something like “Established Chiropractic Practice For Sale” or “Turnkey Chiropractic Practice For Sale” and go on to mention something about how well-established, solid or attractive the business may be. Many point out that the practice has a ton of potential. And, yet you will see a ton of those same ads again and again, for many months or even years on end. Clearly, the chiropractic practice has not sold yet…for some reason.
Here’s the good news:
You can dramatically increase the number of prospects that will look at your “chiropractic practice for sale” ad and decrease the time it takes to actually sell or transition your practice.
In fact, after years of helping chiropractors answer the question “How do I sell my chiropractic practice?” – we’ve boiled things down to 4 key ingredients that can improve the chances of your practice sale success. So, keep reading, that’s exactly what we are going to discuss in today’s post…
Step 1: Timing
There is one universally challenging item to overcome in order to maximize the value of your chiropractic practice for sale. It is simply this: the timing of when you make the decision to sell or transition your business makes a huge impact on your chances for success.
In fact, most Chiropractors Get the Timing of Their Sale or Transition dead wrong!
Of course, it’s very challenging to time things perfectly if you are attempting to answer the question “How do I sell my chiropractic practice?” by using external factors such as interest rates, market conditions and other outside areas that may influence the value of your practice.
Here many chiropractors are attempt to use external forces like people do in real estate or stocks. While the concept of “buy low, sell high” may work well for stocks, it is extremely challenging to reproduce in a chiropractic setting because there are multiple variables at play. Similarly, when you have a “hot” real estate market in your town, that may increase the interest of the general population living in your area, but your sale is not going to be to the “general market” – in 98% of the cases, you are selling to a chiropractor. So timing your practice sale along with the real estate trends can be tough too.
One of the biggest reasons that “timing the market” often fails is the fact that the average chiropractic practice takes a lot longer to sell than most chiropractors realize. In other words, if it takes you many months find a viable candidate for your practice sale, the “hot” market that you were attempting to capitalize on can be long over by then. Additionally, some chiropractors fail to understand the steps and proper sequence that are involved in successfully selling or transitioning their practice. They are not ready to sell, personally, or in their business. And therefore will miss the timing of the external factors happening around them.
Put simply, to get timing right, it’s best to focus on what is in your CONTROL and worry less about trying to ride the waves that come and go.
Step 2: Focus on Performance vs Practice Potential
The second item that will help you answer the question “How do I sell my chiropractic practice?” is also related to the timing issue as it is tied directly to the performance of your practice.
Chiropractic businesses whose performance is declining rapidly or have been stagnating for a long period of time may pose a challenge to the average buyer that they aren’t prepared to handle. Consequently, it can scare them away from your business because they don’t have the confidence to pull your practice out of the toilet or resurrect and restore it to its former glory.
For example, in many of my chiropractic practice transitions webinars, I teach a concept called the “Sell Curve.” In a nutshell, if you were to imagine a standard bell curve, you’d naturally want to sell at the top. We don’t have the space to discuss all the aspects of the Sell Curve here, but the message is clear: many chiropractors wait far too long to sell or transition their chiropractic practice.
Sure, I know your business has potential. But every business has potential, including a startup. When you are selling a practice, your buyer will likely be interested in the future profit potential but they absolutely are most interested in the current performance of your practice. And obviously a practice that is performing well is way more attractive than one that isn’t.
The remedy: here’s where the performance of your practice is tied to the timing of when you launch your sale or transition plans. And here’s where many chiropractors go wrong. If you wait until your performance drops too low, not only will you lose value in terms of what your business is worth, but you will also lose interest from potential buyers.
Step 3: Flexibility – The “Secret” Ingredient to Chiropractic Practice Sale Success
If ever there was a “silver bullet” to chiropractic business sale, it’s this: your flexibility as a Seller matters – a lot! In my business as a chiropractic practice broker and transitions consulting, not a day goes by where I don’t have a call scheduled with a chiropractor who has been trying to sell their practice (on their own) and out of frustration, calls me to ask the question “How Do I Sell My Chiropractic Practice?”
Since there are typically a number of reasons that practices do not sell, I routinely respond with a series of questions back to the Seller – most of which inquire about their own personal flexibility in the context of how it will affect their chiropractic practice sale or transition. Although there can be unlimited variations on the theme of better or worse answers, flexibility is often the “secret” ingredient to your sale or transition success!
Here’s what I mean:
If we discuss your business transition and you let me know that you need to sell within 4 months, for a million dollars (even though you’ve never collected that much) and to a one-eyed, one-armed woman from Wyoming who also happens to specialize in your very rare technique, I’m going to tell you that your chances to get hit by lightning are probably much greater than your chances to succeed. Obviously, that’s an extreme and you may think) ridiculous example. But if you were in my seat listening to the “plans” that some chiropractors lay out for their sale or transition, unfortunately, it’s not that far off the mark from what I frequently hear.
To break down where your plans break down, it’s not that you can’t sell your practice in four months. It’s been done, but you need to understand the nature of the typical time frame for chiropractic practice sales (and the fact that it usually takes longer than 4 months). Similarly, I’m sure there are female chiropractors in Wyoming looking to purchase (although maybe not with one arm or one eye) and I’m sure there are candidates who could match (or learn) your style – no matter how eclectic it may be. And certainly it’s possible to sell for a million dollars (but not very probable if you’ve never collected that much).
Despite all the above, the REAL challenge in these examples centers around your flexibility – or lack of it.
Specifically, why not accept a good candidate from one of the other 49 states? I’ve met many good people from Wyoming and not surprisingly, many from other states too.
And what about that timeframe? Can we be a little flexible here? Many docs have a date in their head and a goal that they want to retire. But is that really set in stone?
All things equal, you still can sell or transition if you are less flexible, it just either decreases the odds that you will do it on your terms and/or increases the amount of time it takes to produce your perfect fit. On the other hand, the flexible doc is the one who can make many situations work and will increase the amount of prospects that fit the profile which, in turn, tends to decrease the amount of time needed to get to the goal.
Step 4: Pricing
Sadly, you could be a serious seller and successfully answer all of the above steps in your quest to answer the question “How Do I Sell My Chiropractic Practice?” — and you can still get it wrong.
This is largely because the biggest reason many chiropractors fail to successfully sell or transition their practice is…price!
Put simply – an improperly priced practice will ALWAYS be more difficult (if not, impossible) to sell. Worse, many chiropractic practices on the market are priced improperly – especially if they are “for sale by owner.”
As chiropractors, 99.8% of us have no training whatsoever in terms of establishing a fair market value for a chiropractic practice. And those who have heard anything about the value of a chiropractic practice have likely gleaned what little insights they have through the “chiropractic rumor mill.” To make matters worse, the rumor that you’ve heard from your chiropractic friend who sold their practice in 1974, 1994 or even in 2004 is likely outdated and about as palatable as expired milk. To add more insult to injury, the chiropractic rumor mill value also does not typically spread its message outside our profession and therefore is not a subject that is known to most banks (who will be the ones lending the money to your buyer to purchase your practice).
Long story short, you need to price the practice correctly if you want to have the best chance for it to sell. A properly priced practice doesn’t guarantee a sale, but an improperly priced practice virtually guarantees your practice won’t sell (unless or until you price it correctly).
Lastly, there is no universal quick, rule of thumb, back of the napkin formula for how to accurately value a chiropractic practice. You can guestimate or possibly get in the ballpark, but to properly price a practice so that it will sell, you need a chiropractic practice valuation.
Your Next Steps (& A Quick Caution)
Before you place the ad for that “chiropractic practice for sale” I hope you carefully consider these items so that you can transition well. It’s not a complete list of all the things you need to do to sell or transition successfully, but it is one that you cannot afford to ignore.
In fact, if you are contemplating your business sale or transition and feel that there are many items to consider and necessary steps to navigate so that you can maximize the value of your practice, you are correct! For most chiropractors, selling a chiropractic practice is NOT a “do-it-yourself” project!
Of course, I’m admittedly biased because the bulk of our business is helping chiropractors to sell or transition their practice, but…
The process of ensuring that your life’s work, your patient’s well-being, your future income stream and a major piece of your retirement puzzle is handled successfully means that it is a very rare chiropractor who can sell or transition their practice for maximum value as a part-time do-it-yourself project. Put another way, there is too much to risk to do this all alone.
So if you need help in this area or want to discover additional strategies for setting yourself up for a great transition or sale, contact us today and we’d be glad to assist you!