What’s the Chiropractic Marketplace for Selling a Practice? It’s a common question we’ve received over the years from would-be Sellers. But now it has a new twist and extension added to it.
The MOST common question we’re hearing these days is this variation:
What’s the Chiropractic Marketplace for Selling a Practice…amidst COVID crisis and an Election Year?
Since we get asked the question so frequently, I thought it would be helpful to give you the answer here.
In many ways, the answer is the same as in any market: great practices are still selling well and weaker practices will take much longer, sell for less and/or not sell at all. Those statements are still true. But in the wake of COVID and with election uncertainty thrown into the mix, there are a few distinctions that are making themselves apparently in the current chiropractic marketplace for selling a practice.
The Microclimate Marketplace
Today’s climate has produced three “microclimates.” Much like meterology, the weather patterns can impact each other in neighboring spaces of the market and even produce different weather patterns within the same general practice stage. Here’s what I mean:
Strong businesses are still very attractive to buyers and in an economic time where so many practices were (and some still are) impacted by COVID, great practices truly stand apart from the crowd. In years past, truly great practices and those who are in the top tier of profitability for chiropractic may have even commanded a premium price. This is still the case for some, but largely these great practices are sailing through the process of their sale much easier than lesser practices.
The interesting microclimate dynamic here is that some of these great practices are so outstanding that they tip the scales towards a “Seller’s Market” where as others are still very good – but the marketplace is more Neutral. So, in other words, they are a great practice, but the COVID concerns and/or election concerns still have buyers…well, concerned.
Salvation for Smaller Practices
Historically, some may have viewed smaller practices with lower price tags as “weaker” than their larger, more profitable contemporaries. Interestingly enough, a microclimate has been produced here thanks to COVID and the election year.
For some Buyers, the lack of large profits cause them to steer away from these practices or if they do venture an offer, it’s largely a Buyer’s market.
But what has surprisingly emerged in the 2020 Chiropractic Marketplace for Selling a Practice is that there are a significant portion of buyers who are actively LOOKING for a smaller practice. In times of economic uncertainty, the lower price tag is appealing and they don’t mind purchasing a practice that may require a little “elbow grease” to get it going in a more profitable direction.
This puts smaller practices, which typically fell into the Buyer’s Market category into a more Neutral Market. There’s still attractiveness there – for some.
The Middle Market Microclimate in Chiropractic
Of course, the vast majority of chiropractic practices will fall into the middle of this spectrum.
Here, the marketplace is still surprisingly strong and retaining a Neutral stance despite the COVID concerns and economic fears of an election year.
There are a few tangible reasons why:
- Downpayment rates are still historically low – this gives Buyers more purchasing power. And if they have the choice of Buying something bigger or more profitable than they could have a few years ago, many Buyers will take advantage of this opportunity.
- Interest rates are still super low – this further strengthens the previous statement, but makes it attractive in the long run as well, over the course of the life of the Buyer’s loan, they will save thousands with a lower interest rate.
- Marketplace Activity is High – there are BOTH many Buyers looking to purchase a practice right now AND many Sellers looking to head towards retirement. The Baby Boomers contribute to the Seller’s side and everyone knows there are a lot of them. On the Buyer’s side, COVID has caused many buyers to lose their Associate job, take a huge hit to their income and/or give them the final propellant they needed to launch out towards owning their own practice. And in uncertain times, Buying a practice makes much more sense than attempting to start their own business from scratch during a pandemic.
Now is a Great Time to Get Moving!
If you are sitting on the fence about Selling your practice, now is a great time to get moving!
Thankfully, we’ve had multiple businesses sell during lockdown, we’ve had practices sell as the states are emerging out from the full shutdown and we have several more practices that are all looking to close by the end of the year.
So if you ask “What’s the Chiropractic Marketplace for Selling a Practice” – even with the COVID crisis and even with election year uncertainty present…
There’s no “perfect” time to sell and there never has been. Those that wait for a buyer to fall out of the sky and into their lap will be disappointed.
Even in the rare event “that buyer” appears out of nowhere with an interest in purchasing your practice, you will likely find that you may not be ready because you never really made the decision to sell. That or they really weren’t interested in buying at fair market value, but instead were hoping to find a desperate doc willing to give their practice away.
But the answer that I can make with 100% confidence is this:
You have an exponentially greater opportunity to sell your chiropractic practice IF…it’s on the market! If that’s you, contact us, we’d be happy to help!!
If you’d like to learn what it takes to successfully sell your chiropractic practice, check out our FREE Exit Essentials webinar – where we will discuss the 10 Factors that affect the value of your chiropractic practice sale!