With a crowded marketplace and a limited pool of buyers, many practice owners are asking: “Can my practice be sold, and what will that exit actually look like?” While everyone hopes for a conventional transition, many sales ultimately manifest as a “chart sale” (patient records only) due to geography, overhead, or equipment age. Understanding which path you are on, and preparing accordingly, can mean a difference of hundreds of thousands of dollars in your pocket.
Path One: The Standard Sale
Usually occurs in urban or high-growth suburban areas with modern facilities. You are selling a “turnkey” business.
Path Two: Chart Sale
More common in rural areas or for practices with aging infrastructure. You are selling “patient loyalty” and records to a nearby competitor.
If you aren’t sure, look at your neighbors. If nearby practices are closing their doors rather than transitioning, you may need to prepare for a Chart Sale strategy to avoid being trapped by a long-term lease. For either of these paths there are certain steps you should take to appropriately prepare for the sale.
Preparation for Path One: The Standard Sale
Targeting a buyer who wants to step in and work Monday morning:
- Clinical Re-investment: Update aging sensors or CAD/CAM now. Younger buyers fear “Day 1 Capital Expenditures.” Buying now provides a tax write-off and boosts valuation.
- Systems & Digital SOPs: Move from “it’s all in my head” to documented Standard Operating Procedures. A buyer needs to see digital workflows that ensure the practice runs without your constant intervention.
- Real Estate Position: Stay the course. There is rarely a need to sign a new long-term lease prematurely; a buyer will likely need to negotiate their own terms to satisfy their lender.
- Financial Hygiene: Clean up your P&L. Remove personal expenses (vehicles, non-business travel) to show the highest possible “bankable” profit.
Preparation for Path Two: Chart Sale
Targeting a competitor who wants your patients, but not your facility:
- Zero Capital Expenditure: Do not buy new tech. In a chart sale, equipment often goes to auction for pennies on the dollar. Patch and repair only.
- Lease Maneuvering: This is critical. Do not sign a long-term lease extension. Align your expiration with your retirement date to avoid paying rent on an empty building.
- In-Sourcing: Keep more specialty work (Endo/Perio) in-house if you are competent. “Active patient” value is often calculated based on trailing production.
If you aren’t sure which path you’re on, let us help you ascertain your value. If you are currently in the middle ground, the best move you can make is to get an expert assessment of your specific market and facility.
The key to any successful transition is to start early. We recommend contacting us five years before you plan to retire so that you have plenty of time to plan accordingly and pivot your strategy based on your unique situation.
Contact us today to begin mapping out your path.