When considering a chiropractic office sale or even a transition in your practice, it’s easy to procrastinate the planning of such a significant event in your life and chiropractic career. While it is important to thoroughly analyze the road you are about to embark upon, there are some serious dangers with procrastination or even attempting to hatch the “perfect” plan for your chiropractic office sale or transition.
In fact, there are three you can’t delay if you want your sale or transition to be a success:
Choosing Your Transition Timeframe Target
The first big decision to make is with respect to timing your transition or sale. In this, you don’t need a plan down to the specific date or the hour, but you do need an overall target for the year you plan to sell or transition and (preferably) a month.
Certainly your target date doesn’t have to be set in stone to the degree that you have to exit by January 1, 2025 or you will just shut the whole thing down on January 2. But many chiropractors seem to err on the other side of the fence and when I ask them about the timeframe in which they would like to transition or start their chiropractic office sale, they give me a range instead. Commonly, the DC will state that they would “like to be out in 3-5 years” or “by the time I’m Social Security age (despite the fact that there are different ages you can begin to collect Social Security)” or even “somewhere in the next few years, but I could go earlier if the situation was right.”
These timeframe targets are way too fuzzy to set a meaningful mark for your transition. And, again, while flexibility is helpful, the lack of a clear target can easily turn into a moving target – which is bad for both buyer and seller. By delaying a target for your timeframe, you will not only frustrate any potential prospects, you will delay any work that needs to be done to get you there primarily because “the date” doesn’t really exist and allows for endless procrastination.
Your Route or Transition Options
Unfortunately, the timeframe target is not a decision that acts in isolation but it tends to have a cumulative impact on other important decisions you need to make with respect to your chiropractic office sale or transition.
In other words, if you don’t set a target for your timeframe, it then becomes difficult to decide which transition routes to prioritize or eliminate.
In a quick conversation, I can often eliminate potential routes for a business owner just based on their timeframe. For example, if a chiropractor wants to exit in the next year, hiring an associate for a “sweat equity” earn-in will not get them to their goals. Here’s why: The Associate Earn-In route (also called a Buy-In) is for associates who have the desire to own but lack the financial resources to buy. A plan is put in place whereby they can work with the chiropractor for a defined time period while earning “sweat equity” towards the purchase of the owner’s practice. And so, while this can be a viable exit route and plan for some, it is not a plan that will happen quickly because the associate is not likely to earn enough sweat equity in a short amount of time to qualify for a purchase.
Similarly, if you want to be out in a couple years time, entering into a Partnership probably doesn’t make sense. In a Partnership or merger scenario, the key to success is that the combined efforts of each doctor (and the shared overhead) will be greater than what either of the doctors could have achieved solo. And the increased production and decreased overhead leads to greater profits and a return on the investment of the partnership. An important realization here is again the timing.
Business partners need to realize that the profits and growth of combining forces will not be instant. But over time, the bottom line will get better. And so again, a person looking to exit quickly will not allow the partnership to mature enough to be a profitable return on investment for both parties.
Consequently, you can now see why timing your transition will also affect your transition route. But even docs who set a clear target for a timeframe of their transition can easily make the mistake of not having clarity on which route is best for their situation. (For a more detailed analysis of a dozen different options, see my Ultimate Chiropractic Exit Strategy program).
This is where the third big decision comes into play and a potential delay can harm the plans for your chiropractic office sale and transition.
The Goals of Your Chiropractic Office Sale or Transition
To some, having a goal for your chiropractic office sale or transition sounds too obvious. After all, the goal is to sell or perhaps to get out of practice, right? For many chiropractors that is one of the goals. But likely, their actual exit or transition is much more than a departure date.
Here, you need to consider a few additional, yet important, details. For example, is there a financial target tied to the sale? In other words, do you need a certain amount of income from your sale in order to exit? What if you were able to get your desired sale amount sooner (as in now!), would you leave sooner?
Similarly, chiropractors may need to consider other contingency plans to ensure a successful transition as well. What if the amount of money generated from your chiropractic office sale is less than what you anticipated? Will you still sell? Do you have a plan to create additional income to fill in the gap? Is there an absolute bottom number that you must get or else you walk away from the deal?
In addition to all these financial questions, your chiropractic office sale or transition may involve other goals, such as a provision to stay on after the sale and continue patient care at a slower pace. Or perhaps you’d like the ability to do vacation work from time to time. Or maybe you want to consider selling part of the practice now and part later – so your “goal” is really a two-phased plan, with milestones in between.
Finally, for some chiropractors, a major piece of the transition puzzle is the person they will transition to. While financial goals and time targets may be desirable, a factor of great importance is that they find the “right fit” successor to lead their business and continue their legacy into the next generation. For these chiropractors, finding someone who employs a similar style, technique, and philosophy is of utmost important to feel that they have transitioned or sold the practice successfully.
How Will YOU Succeed With Your Chiropractic Office Sale or Transition?
Here’s some good news in respect to all successful chiropractic office sales and transitions: the “rules” have some flexibility. In other words, you don’t have to transition in the exact manner as your chiropractic colleague did, or utilize the same strategies as did others who sold or transitioned decades ago. To a degree, you can and should customize a plan that works for you and your prospect. (The only reason I have to say “to a degree” is that your exit plan needs to realistic and feasible. For example, selling a practice that has collected $200k per year for $1,000,000 in 30 days time is neither realistic, nor feasible.)
But here’s the challenge: While I can’t answer which of these three big pieces of the puzzle is most important to you, I can confidently say this. After more than a decade of helping chiropractors sell or transition their practice, you will need all three elements to sell or transition successfully.
Consequently, the chiropractors who achieve this have one common denominator that they use to work in their favor: time. As I stated at the start of this article, delaying any or all of these elements generally leads to problems. But the reverse is also true. Planning ahead will proportionately increase your chances to transition or sell smoothly.
This is certainly simple sounding advice. But I can tell you from countless conversations with chiropractors who have waited too long to plan their sale or transition, it is not an easy accomplishment. There are many contributing factors that cause chiropractors to procrastinate their plans – hopefully, one of them is that you love your practice and your patients!
But the reality for all of us is that we do not get to dictate the number of days we have here on this planet, the reality for most is that we will eventually get tired and want to slow down or sell our practice and the reality for some is that they will fail to plan to account for either of these realities and they (or their family) will be faced with some very tough choices.
On the other hand, the proactive chiropractor who is able to plan for these events and their eventual sale or transition will likely find themselves with some very attractive options and opportunities to exit well, continue their chiropractic legacy and create an opportunity for an abundant life “after” chiropractic!
If you are contemplating any of the “big three” items discussed above in respect to your chiropractic office sale or transition and want to avoid mistakes many chiropractors make, consider our FREE Sell, Switch or Slow Down Webinar where I will be discussing how to maximize the value of your chiropractic practice sale or transition and minimize costly mistakes. Over 6000 chiropractors have taken this webinar to help clarify or start their transition plans – and you could benefit from doing the same!