in Michigan, Indiana and Ohio
Advice from someone with 40+ years Chiropractic Practice experience and a Real Estate license:
When selling, it’s a good idea NOT to use a local realtor who insists on putting a sign on the front lawn of your practice. Confidentiality is important during your sale process to help maintain your current patient base and good will. If news of a sale gets out, patients will often seek an alternative doctor.
Out-of-state realtors or sales professionals who are not licensed in the state of Michigan can also lead to complications during the sale. At the very least a resident, licensed professional will be able to work within your needs and desires, be more available for in-person visits, and convey the qualities of your community and practice to a prospective buyer.
Keep the sale of your practice to yourself until the sale is final. Neither staff nor patients should be aware of the transition until the time is right. The period when the new doctor comes in to become familiar with staff and patients and the current doctor transitions out is when staff and patients can become comfortable and accepting of the change.
Regarding your associate in the sale, consider a professional who has unique skills and experience that can be more effective and useful to your specific needs. I deal with buyers, sellers, and CPA lawyers. I do it all, and can provide financing options for practice and building sales through a bank in Grand Rapids. Most banks will not finance a practice. My preferred bank DOES.
Buyers tend to shop for location, cost and chiropractic technique.
Pricing on your practice should include tangible items such as the X-ray machine and tables, and intangible aspects such as the good will of the practice, a trained work force, practice protocols and practice reputation.
The value of a practice may range from 40% of the last year’s gross, plus equipment and other variables, to 100%. Gross is the money taken in overall; prior to paying staff, utility and supply bills, your own income, etc. Net income is the money paid to yourself or profited and is usually reported as low as possible for tax purposes.
For sales/purchases requiring a land contract, there are options available to complete a successful sale.
Some terms/services to understand:
- Value: You are buying or selling an income.
- Good Will: The propensity of patients to return to the practice for years to come for various reason such as treatment results, location, staff, convenience, parking, etc. Longevity of the practice, signage and office procedures can all affect Good Will and the end value of your practice.
- Recurring Expenses: Expenses you have the next doctor may not have.
- Listing Period: This is the period of time you’ll contract with the sale agent. My standard listing period is 9 months. There will be no mutual listings and Professional Practice Sales handles all the ads and internet marketing.
- Commission: Professional Practice Sales works hard to sell your practice for a 7% commission fee (practice only) or a decreased 6% commission fee (building and practice).
- Valuation: This is a report of the value of the practice. Accounting firms will charge up to $9,500 for this calculation that Professional Practice Sales handles for only $995.00. This valuation is the property of the person purchasing/requesting the valuation. This is usually an individual selling on their own but it may also be a child of the doctor or perhaps a spouse in the process of a divorce where one spouse is required to provide the other with a percentage of personal wealth. Estate planning to show your net worth is also a valid reason for requesting a valuation. And, a valuation may be used to take to the bank for financing. Banks will require an expert opinion on value.