All chiropractors should be aware of the unanticipated risks of waiting to sell a chiropractic practice, but unfortunately few seem to recognize them. In fact, one of the biggest myths that gets in the way of a successful chiropractic practice sale or transition is the thought that “I can sell anytime.”
Most chiropractors are aware of their own mortality enough to realize that one big risk of waiting to sell your chiropractic practice (or transition to your associate) is that none of us can cheat death. The other obvious inescapable reality of life (and business) is taxes. While that’s another topic for another day, it’s easy to understand that the more tax planning you can do before your sale the better off you will be.
Beyond those two glaringly apparent realities, there are several other risks lurking around the corners of your chiropractic practice sale or transition that you might want to be on the lookout for. These risks can best be classified as “unanticipated.” Literally, one moment everything is sailing along fine in practice, the next and you are the guy falling down the flight of stairs you’ve walked a thousand times. What happened? Something changed – and the risks of waiting to sell a chiropractic practice suddenly appear right before your eyes.
And when that change occurs, the fall is often a drop in your practice value or an altogether sabotage of your sale. Here are several big changes that few chiropractors anticipate but we all should be aware of — we unaffectionately call them the “Big D’s”:
1) Disability: while some may fear the final end, there are disability is a bigger adversary that many have to face. It’s one thing to check out permanently and hopefully leave your spouse and family with a life-insurance plan that will support them independently of your practice sale. It’s another to crunch the numbers and realize that partial or full disability could potentially handicap your practice WORSE than dying. I hate to say it, but I’d guestimate that nearly 1/3 of the chiropractors we speak to who are interested in transitioning their chiropractic practice (through a sale, associate opportunity or other option) are eager to do so because of a disability. They got injured or have an illness that makes their practice “not what it used to be” and makes the prospect of production turning around nearly impossible.
2) Divorce – whether it’s a surprise or a long-time coming, divorce generally has a negative impact on the practice value and ability to sell. It is distracting for the owne and staff, depressing and in the case where the spouse works in the practice, can lead the departure of a staff member.
3) Disagreement – many DCs hitch their star to their associate, partner or future buyer only to find out that well…it doesn’t work out. A disagreement now can end your future planned sale, which is why it’s best to get started early.
4) The Directionless Associate – this is the associate who seems content, doesn’t seem to be going anywhere anytime soon and suddenly…does. What’s most surprising about this associate is that you might have even casually mentioned your practice sale or transition in the past but (typically) their response was positive but not assertive. You probably assumed (and so did they) that things eventually may work out; but in the meantime, life went on. And so did they — leaving you with no associate and no transition plans. There’s no actual Disagreement here – but no actual forward movement either. Until eventually, you decide you need to move on.
5) Decline in Your Practice — any or all of the above can contribute to the numbers going down. If and when that happens, the value declines with it. And if it’s significant, it can reduce both the price of your practice and its potential appeal. This is when the “I can sell anytime” attitude crumbles and disintegrates into “I would love to be able to sell in time.”
WHAT TO DO TO DECREASE RISK
Behind all these scenarios above, there is essentially a huge risk in hanging on for too long. Anyone of these risk factors could cause you to pass the peak of your practice value or miss your opportunity entirely.
There’s really only one solution to decreasing the risks of waiting to sell a chiropractic practice and that’s increasing your planning.
After all, we all face risks every day with every breath we take. Some are more calculated risks than others. So it’s not a question of finding the “perfect” time to begin your transition plans or your chiropractic practice sale. The perfect time may never happen and even without “perfect” timing, you may still navigate a successful transition.
Perfection aside, planning (and early planning especially) does provide you with options, informed decision making and perhaps the best chances to make the most of your opportunities at hand — while simultaneously reducing risks.
In years of walking, coaching or perhaps even coercing chiropractors into taking better care of their transition plans and their future, I’ve found that the single biggest intimidating factor is simply starting the process. The risks of waiting to sell a chiropractic practice apparently are not apparent enough for some chiropractors to get started. Interestingly enough, we’ve had many clients report to us that starting is also the one of the greatest sources of stress relief in regards to transitioning to life after chiropractic.
If you are a Baby Boomer Chiropractor, please take these words to heart and start planning. If you’re looking to sell your chiropractic practice or transition in the next few years (regardless of your age), you’d do well to heed the same advice.
Hopefully, you can clearly see the risks of waiting to sell a chiropractic practice — it’s now your choice and chance to avoid the devastation they can cause and steer your practice towards a successful end (and probably sooner than you think).