A private practice is a big investment. Selling a practice is common. A practice is a business, and building up and then selling a business is common practice. While running a private practice can be costly, a successful sale can repay the investment made many times over.

Physicians spend thousands of dollars to set up, operate and maintain their private practices, and a few mistakes made when selling can lead to them losing a great deal of their investment. While the process is not easy, these mistakes are generally quite easy to avoid.

A proper sale can mean thousands of dollars in profit. Here are 4 tips to avoid making big mistakes that can lead to you losing out on that money.

1. A lack of forward planning

The first mistake to avoid when selling your practice is not planning ahead far enough. Doing so can lead to you waiting too long to make the sale, missing the point where your practice was at its highest value. Properly preparing to sell a medical practice also takes a significant amount of time, and forward planning is essential to giving yourself the time you will need. You want to avoid a situation where you are desperate to sell in the short term, as it can put you in a situation where you might not be able to receive the best price. Having a plan in place is always beneficial, as you can’t predict when the perfect buyer will knock on your door.

Another important aspect is succession planning, especially for solo physician private practices. Waiting until the last minute will, once again, put you in a very difficult situation as you plan your exit. If the physician that is succeeding you feels reassured that they will be set up to succeed in your practice, you can receive a much higher price. You do not want to give them the impression that the sale is being made out of desperation or a desire to quickly exit the practice.

2. Not hiring professional help

Selling a medical practice is a major business endeavor and going into it without the proper professional help will only hinder your ability to make the best deal. The right transactional consultant can make succession planning and conducting the sale far easier. It is important to take the time and find the consultant that is best for you, rather than hiring the first person you meet just to get it over with. Doing so will, in the long run, lose you both time and money. Finding the right professional help might be time consuming, but it is the best way to guarantee that the sale proceeds as smoothly as possible.

3. Setting the wrong price

This goes both ways. A very high price tag can be unrealistic and might scare off potential buyers. Especially if your practice is not especially profitable, setting an overly optimistic price will just be a waste of time for all involved. The state of the economy, your specialty, similar practices and the marketplace in general are a few of the most important factors in deciding the right price. Do not take it personally if the right price for your practice is lower than what you wanted. It’s just business.

On the other hand setting the price too low can cause you to miss out on thousands of dollars in profit. Undervaluing your practice to get the sale done quickly, for whatever reason, is a bad idea. Take the advice you get from your transactional consultant, and wait for someone to meet the right price.

4. Picking the wrong buyer

Patience is the most important aspect of making a medical practice sale. Accepting the first offer might be tempting, especially if it’s a good one, but it is rarely the right decision. Do your research on the buyer to make sure they can actually follow through on the deal, especially if the offer seems too good to be true. A large offer with little to no money paid up front will be worthless if the buyer is unable to keep the business running successfully. If the new owner runs the practice poorly, they could very quickly find themselves in the red and unable to follow through on the payments they owe you. Try and get as much of the money upfront as possible.