Every therapist that I know wants to create and leave a legacy of change behind her.
Author and organizational consultant Pamela Dennis, Ph.D. can help you do just that – thoughtfully and strategically.
When I read about her upcoming book, Exit Signs: A Boomer’s Roadmap to Selling and Leaving Your Business with Pride, Profit, and a Legacy, I knew that her voice would be welcome here because what I know is that planning for closing your practice needs to begin at the same time that you begin to plan for the opening of your private practice.
Pamela was kind enough to accept my invitation to share with each of you her own considerations when closing your private practice.
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A Guest Post by Pamela Dennis, Ph.D.
“Many a man has fallen in love with a girl
in a light so dim he would not have chosen a suit by it.” ~ Maurice Chevalier
Choices When Closing Your Private Practice
My grandson recently got his driving license. He is madly in love with vintage Ford Mustangs. At a car show you can see his knees go weak as he nears one. His mother, of course, wants him to drive a practical SUV. Such is the heartache of love and reality.
As a mental health professional—or owner of a similar practice—it’s predictable that you’ll face a fork in the road about your business’s future. For some it’s a forced change due to circumstances like economic downturns, changes in demographics that impact your service, disruptions in your field such as consolidations, new delivery methods or technology; and of course, changes in personal health. For some, it’s taking an unexpected detour to an encore career. Occasionally, life throws up roadblocks that demand a sudden transition such as closing your practice. For many others, though, after you’ve made a long journey through a very satisfying career, you realize you’re ready to exit—whether to take another path or to slow down and enjoy different scenery.
For those at this stage of life, as for a car-shopping teenager and Chevalier’s man in love, fantasy and hopes can cloud your decision process about the right buyer for your business. In evaluating the best person to take over your practice, you can lose touch with reality. You see the checkbook of a potential buyer and not the strategic fit with your practice, your values, and your goals.
How to Determine What’s Important
I have a dear friend in a successful medical practice who struggled with this question. He cared deeply about his patients and that they have the right new doctor buying his practice. He also wanted the practice to be affordable to a young practitioner; and he wanted to perhaps explore a new line of service within the practice; and he wanted to escape the day to day; and . . . .
Each time we talked, his hopes and priorities grew and shifted. My head was spinning as I listened. No wonder he was in a quandary as to “the right buyer.” There were so many factors to consider.
I thought I might be able to help him sort through the muddle with a simple ranking exercise. I wrote down all the criteria I had heard him mention and asked him to assign 100 points across the factors. I suggested his wife do the same exercise. They were quite surprised by what they learned.
He said his priorities became clear and were easy to sort. She struggled a bit. When they compared their ratings, they were different. She learned she was working from old assumptions about what he felt was important. He learned where they held the same values and where they needed to explore their differences.
Questions to Ask about Your Exit Priorities
The statements below are just examples of the values and priorities you might have. Other factors on your list might be:
- My people are well-led by an owner they respect and perceive as competent.
- My family believes their shareholder value has been left in competent hands that will enable the business to endure.
- I have an ongoing income stream from the business over the next X years.
Feel free to add your own criteria—anything that comes to mind as important to you.
Once you have your list, allocate 100 points to the factors.
Avoid an even distribution; make at least one factor 25%.
(Download a fillable version of this exercise here.)
Other Considerations When Closing Your Private Practice
Finally, like my MD friend, ask yourself, what other perspectives are important?
- Who are key stakeholders in your practice and your life’s choices: partners, significant others/spouses, clients?
- What advisors could help you define the implications of your priorities, e.g., financial advisors, legal counsel, brokers?
3 Benefits to Ranking Your Priorities
The time you take now to write out your exit priorities has three benefits.
1. It reduces the stress and anxiety that comes from ongoing indecision and lack of clarity.
2. It grounds you in what is important to you as you discuss the sales process with advisors.
3. And it prepares you for that unexpected sales inquiry when you feel the excitement of the opportunity, the recognition of all you have accomplished, and perhaps the panic of “having to decide.”
In other words, it sheds a bit more light on that Mustang that drives up or that suit(or) you are looking for.
For additional help in planning your exit please visit my website. My forthcoming book, Exit Signs, is written for owners like you. It is both practical and strategic; it is about the tactics of selling and the transitions of leaving; and it focuses on three exit goals: leaving your business with pride, profit, and a legacy that you made a difference.
What are the most important factors in selling your practice? Please post a comment to help others sort their priorities.
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About the Author: Pamela Dennis, PhD is a management / organization consultant and author of Exit Signs (forthcoming), who successfully sold her firm using her book’s principles. She blogs about business transition, or find her on Facebook or LinkedIn.
Pamela – Thanks for this great post; I love the focus on prioritizing. So many business owners, therapists or not, don’t usually think about this. Yet it’s so important (as we like to say in out business) to “start with the end in mind.” Maybe I stole that from Michael Gerber, but it can be a compass for developing processes – including the exit. Looking forward to your book release.
Thank you Marsha. I am very intense on this subject of acting NOW to plan your ownership transition. And yes, motivation comes with having the end in mind. (It was Covey’s phrase btw.) You might want to read my other blogs on the Exit Signs roadmap.
Pamela- Your post is full of useful information. About 2 years ago I had a health issue that took me out of practice. At the time, I did not know if or when I would ever go back into practice so I had deal with selling it. Needless to say, this was an unexpected event and I was unprepared. How helpful it would have been if I had you to consult with BEFORE the event.
All business owners need an exit strategy. Thanks for addressing this very important issue.
Thanks Jack for sharing your experience. It’s so much harder and more stressful to be planning an exit in an emergency situation. That’s why I am so intense about owners starting before they think they need to or even feel ready. So much more freedom in your choices then. Good luck going forward with your practice.