When is the best time to sell?
Even with the benefit of hindsight it might not be possible to known exactly when the best time to sell would have been – and certainly none of us has a crystal ball to know the perfect future time to sell. However, we can offer some general suggestions about timing that may help practice owners.
In general, the best time to sell is when:
- The business is doing well. Potential buyers want to purchase a clinic that is profitable, that is growing, and that has the potential for continued future growth.
- The economy is healthy. A healthy economy makes buyers more confident about the future and makes it easier for them to obtain financing.
Practice owners may own a clinic 20, 30, 40 years or longer. Businesses rarely have consistent growth and profitability over these long periods of time – they experience ups and downs just like the economy overall.
Since you want to sell your practice when it is doing well, and since the health of your business may fluctuate over time due to many factors, plan ahead to allow flexibility on when to sell.
If you have a firm date when you want to retire or will need money, waiting to sell your practice until you reach that point does not leave flexibility to adapt to business cycles or unexpected events. A better approach is to plan ahead and give yourself a window of opportunity to time a sale. For instance, if you would like to retire in five years, now is the time to start positioning your clinic for sale and start making any necessary changes and improvements. At the two- to three-year mark, if things are going well and you are able to obtain a good price for your business, you can sell a little early; however, if the business or economy has turned unfavorable, you still have several more years until your original target date to ride out the business cycle or make additional changes to the clinic.
Some owners want to sell their practice but continue working; others want to sell and retire. Openly discuss your goals and be flexible to provide potential buyers with an adequate period for a smooth transition.