PART 3 OF 4: Preparing the Practice

Building the value and readiness a successful transition requires.

Whatever path a succession takes, the practice must be prepared for it. A practice that's well-run, financially transparent, and not wholly dependent on the departing owner transitions far more successfully than one that is not. This part addresses how to prepare a practice for succession.

Building transferable value

Much of a practice's value can be tied to the owner personally, through their reputation and relationships. Succession is easier and more valuable when that value is made transferable, by building the practice's own brand, systems, and staff so it can thrive under new ownership. This work takes time and is a central reason to plan early.

Getting the financial house in order

A practice preparing for succession should have clean, organized financials that demonstrate its true performance. Whether you're transitioning to a partner or an outside buyer, transparent and reliable financial records will support value and build the successor's confidence.

Strengthening operations and staff

A practice that runs well without the owner constantly holding it together is more valuable and more transitionable. Preparing the practice includes:

• Documented systems and processes that do not depend on the owner's memory.
• A capable staff and, where relevant, providers who will remain.
• Stable key relationships, from referral sources to the premises lease.
• Current compliance, licensing, and records.

Addressing compliance in advance

Problems are cheaper to fix before a transition than to discover during one. Reviewing the practice's compliance posture, from billing and coding to HIPAA and licensing, ahead of a succession will prevent issues from completely derailing a sale or burdening the successor.

Grooming a successor

In instances of internal succession, preparing the practice includes developing the successor clinically, in the business of the practice, and in the relationships the practice depends on. A successor brought along thoughtfully over time is far more likely to carry the practice forward successfully.

How West Coast Health Law Can Help

We help owners prepare their practices for succession, building transferable value, strengthening operations, and resolving compliance issues before the transition.

West Coast Health Law offers a FREE consultation which you may schedule by clicking the button on our website.

This article is provided for general informational purposes only and does not constitute legal advice or create an attorney-client relationship. Laws change and every practice is different; consult a qualified attorney about your specific circumstances.