10/10/2017 Jack Ressler, DPM
Invest in Time, Not Money to Sell Your Practice
It has been a year since the sale of my podiatric
practice. I am semi-retired keeping a satellite
office I work one day a week along with two
retirement facilities. The reason I am writing
this query is based on a lecture I attended at
the last SAM convention in Orlando this past
January. The lecture was given by a person
representing a company who brokers the sale of
Simply put, they take your numbers and use a
formula to value your practice. I found it very
interesting looking around the room where the
lecture was given. There were about 50 attendees
and there was quite a change in mood at the end
of the lecture and Q & A session.
What started as an upbeat audience turned into a
lot of deflated podiatrists fueled by a very low
percent of gross of what they can expect to make
from the sale. I don't remember the averages but
numbers like 10 % of their yearly gross were
mentioned. Let’s face it, we all want and think
our practice is valuable but sometimes we put an
unrealistic price on the practice we worked so
hard to build. What makes it worse is many
practitioners contract with brokers and spend a
great deal of money paying commissions and
practice valuation fees making the net sale of
your practice that much less.
When I made the decision to put my practice on
the market, I did my research, made some calls,
and decided to use an approach that I had not
seen. I contacted my IT person to help me with
the idea. We created a website that included
many pictures of my office along with drop down
tabs of each picture with a detailed description.
We had several tabs describing demographics,
equipment, type of practice and more. When
finished, I inserted a classified ad in this PM
News website. The ad contained a link that would
direct prospective buyers to my website. There
was a section with information on contacting me
by going to an email address.
Due to confidentiality, I did not use my personal
email address. Yes, this project took work but it
did lead to the sale of my practice within one
year and I was not at the mercy of a broker that
would decide on the type of advertising along
with where and when ads would be placed. The
eventual buyer initially contacted me around
three months into my advertising. I did use a
lawyer specializing in medical office
transactions and it was rather expensive (around
$5,000) but at least that was money spent knowing
my office was going to sell. I did have a nice
physical office but not high tech.
My demographics were mostly Medicare and cash
paying patients. No managed care. I did general
podiatry and only very minor surgical procedures.
My office grossed higher than the national
average but by no means a mega-grossing office.
The bottom line is I was able to sell my office
for 70% of my gross collectibles. This was a
number that was fair to me and the buyer.
Jack Ressler, DPM, Delray Beach, FL
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