A key question that I’m asked by so many practice owners is “when is the best time to start thinking about selling my practice?”, and my answer is always “now!”
The truth is, you should really start thinking about when you want to sell your practice as soon as you start it, and if you haven’t already started thinking about when to sell your practice, the next best time is now!
It’s so important that you think about this early on because you need to consider how your practice fits into your retirement plan, and how reliant you’ll be on the practice to fund your retirement. Getting a clear idea of this will help to determine how the practice needs to be set up and how it needs to operate for you to be able to achieve your desired outcomes from selling it when the time comes.
There are several different setup options/plans you might wish to consider:
You could set the practice up so that you’re able to sell it as an entity that is completely independent of you. To be able to achieve this, you’ll need a really profitable practice which is not reliant on revenue brought in by you, but rather revenue brought in by the team as a whole.
Another option is that you work in the practice and take funds out of the business to contribute towards your pension fund along the way. Doing this will mean that you’re less reliant on selling the business on when it comes time for you to retire.
A third option is to have a succession plan in place, and plan for someone to take over from you when you decide it is time to retire. So, you might go into partnership with someone younger than you, and allow them to buy you out of the business along the way.
These are just a few of the options you have when it comes to your exit strategy, there are loads of other options you could explore – what’s important is that, if you haven’t already, you start exploring these options and think about putting a plan in place.
We’ve helped loads of clients with their exit strategies, if you feel like this is an area you need help with, get in touch.