Lou Bermudez is the premiere broker of healthcare medical & dental practices in the State of California!
Having founded the practice sales industry in California over 37 years ago, he is quick to acknowledge that not enough physicians plan for the sale of their medical practice.
So, whether you are nearing retirement or in your prime working, here are some do’s and don’ts concerning your medical practice as a business, its value and selection of a medical practice broker when the time is right. Make note – your business decisions today, affect the value of your practice and even your ability to sell the practice as an on-going concern. Those decisions you are now making – whether to sign that long-term lease the landlord is pressing for; whether to invest in tenant improvements/ automation; whether to change billing service; whether to change staffers, etc., all these decisions factor in the value of your medical practice and ultimately the selling price for your practice. Too often physicians overlook their practice as a saleable and transferable business. So, if you’re considering buying or selling a medical practice, or simply wish to improve the worth of your medical practice, here are some critical points to keep in mind.
Yes, Medical Practices Do Sell
In his 37+ years of experience, Lou Bermudez (broker) doing business as Practice Sales & Appraisals, has successfully sold nearly every type of medical practice – from general medicine to pediatrics / urgent care to plastic surgery / oncology and even psychiatric practices. There is a market for each specialty/sub-specialty practice! Whether another physician, medical group or (hush) even large corporate conglomerates with ties to Hospitals.
In fact, Lou orchestrated one of the largest sales of medical practices (as a group) in the history of California just three years ago!
So whether, you are a single office small practitioner to a large corporation with multiple offices, shareholders and over a hundred physician owners in California, your business IS valuable and saleable.
Knowing What’s Being Sold
To begin, the preponderance of the value of your medical practice lies in its goodwill. Simply defined for our purposes as “the probability that patients will continue returning for treatment”; and with that continuity of patronage comes continuity of income stream. So, the good news is, your years of practice, your years of service to the community at large DOES represent value that IS quantifiable and will lend credence to the value of your medical practice!
Keep Your Business Records Up-to-Date & Easy to Digest
Potential buyers looking to purchase a medical practice all work with a team of advisors — accountants, practice management consultants, finance personnel and even their own medical practice brokers. There is no avoiding full disclosure and complete access to your books and records. Day sheets, ledger cards, and missing EOB have given way to practice management software, reports, digital record-keeping and careful due diligence on the part of the buyer of your medical practice. So, aside from all your patient records, be sure to be up-to-date on your tax returns, payments to the IRS, withholding taxes and office premises rental payments
Typically requested items include three years of tax returns, payroll tax returns, quarterly profit/loss statements, computer generated management reports, etc. Mr. Bermudez, as your medical practice broker representing YOUR interests not only acts as the liaison between you and the buyer’s request for financials, but also acts as the buffer and determines “when” the information is to be delivered, how much should be delivered and to whom… all with the intent to keep things moving and reach the ultimate goal of completing the sale of the medical practice.
The business of medicine is about recurring patients, referrals, office visits and continuity on some form or another. In similar fashion, the continuity of staff IS important to the overall value of your medical practice for sale in California. Keep staffers happy and working. If you find your practice volume and/or revenues can’t logically afford your prior staff hours and investment, then reduce some hours across the board and/or keep your most valuable employees and reduce costs elsewhere — your patience and investment here will mean higher valuation for your medical business, easier transition for the buyer, larger selling prices for your practice and an easier route to achieving your practice sale goal !
Keep in mind if you are thinking of buying/selling a medical practice but have questions about the process, wish to discuss timing or market conditions or are plain curious as to how it works, in California, there is only one medical practice broker to remember — Lou Bermudez, and you can reach him at 818-999-9595.