How to Sell Your Private Practice�������

BEVERLY PRICE

CEDRD-S, MA, E-200 RYT, C-IAYT

GUEST AUTHOR

In my career, I have started and grown several businesses – two of which I have sold� One was a private nutrition practice, the other a comprehensive eating disorders treatment center� Consider how you can nurture, grow, shape and mold your business so you can sell it for a profit� Planning for the sale of your practice starts from inception� It is important to establish and run your business as an asset� y Establish a legal entity for your business (Corp�, PC, LLC, LLP, etc�)� y Choose a transferable name vs� Sally Jones, RD, PC� y Have excellent computerized financial and operational records� y Make your contracts for service assignable� y Have non-compete contracts with your employees so the buyer is assured they won’t leave and take your clients� y Have assignable office leases� y Maintain detailed corporate records of all tangible assets including date of purchase, price and description� y Maintain presentable and functional offices�

The sale of a practice can provide an excellent exit strategy for retirement or a mid-career change of direction�

VALUE OF YOUR BUSINESS

There are no “rules of thumb” for determining the worth of your business� In various industries, a multiple of EBITA (earnings before interest and taxes) is used� A professional valuation of your business is needed to establish a price that is supported by interested buyers� The valuation should answer the questions a potential buyer has about what he/she is buying and why the asking price is appropriate� The valuation consists of:

Tangible Value:

y Real estate y Leasehold value and improvements y Furniture, fixtures, equipment, supplies y Receivables y Cash

Intangible Value

y Goodwill (ongoing business value) y Value of intellectual property assets (patent, trademarks, copyrights, client lists, contracts for service, startup convenience, trained staff in place)� y Brand selection, registration, development, usage, and history of establishment of recognition in community In the sale of both of my businesses, I had a professional valuation completed, and hired a consultant to negotiate the sale� This was well worth the cost as it resulted in a payment in full, for both of my businesses, versus payment or earn-out over a period�

DURING THE SALE OF YOUR BUSINESS

y Maintain complete confidentiality of your plans to sell� Premature disclosure to staff or others can cause competitive damage� If your clients learn you are about to sell, they may feel more secure with a known competitor� y Require a confidentiality agreement from potential purchasers that requires them not to discuss their interest and due diligence knowledge� y Continue building your business�

Present to potential buyers as a successful, growing business to get optimal results� y Be patient – a sale may take some time�

MARKETING

Marketing the availability of your practice to the appropriate audience is important, and negotiation is involved in the sale process� Identify potentials in your industry� In selling my private nutrition practice, a new dietitian opened a practice down the street� She was struggling to get clients� The timing for my sale and her purchase were perfect� When selling my eating disorders treatment center, I caught the wave of larger facilities purchasing smaller ones�

THE SALE

Know that purchasers will require you to sign a non-compete clause� They may retain you for a specific time during the transition process, negotiate a remaining business interest to ensure further growth, or keep you on as a consultant� Rebecca Bitzer, MS, RDN, LDN, CEDRD, was ready to retire and had two employees who were interested and ready to take her private practice to the next level� Rebecca was retained in an advisory role as needed and earned profits on certain aspects of the business� An experienced attorney should draw up the sale contract, which involves additional negotiation� From a tax standpoint, an asset purchase is taxed at a higher rate compared to a covenant not to compete� These particulars are best discussed with your CPA (certified public accountant)� The sale of a practice, if done properly, can provide an excellent exit strategy for retirement or a mid-career change of direction, along with the financial rewards from the sale�

Beverly S� Price, CEDRD-S, MA, E-200 RYT, C-IAYT, is a certified eating disorders, registered dietitian and IAEDP supervisor, experienced registered yoga teacher and IAYT Certified Yoga therapist� She is an entrepreneur and pioneer in offering products, national workshops and consulting services to registered dietitians�

Product Reviews

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