Exit Planning is Good Business Strategy.
Interested in selling your practice or not, “exit planning is good business strategy” is a golden nugget of wisdom for practice owners.
Think about it: when you improve your practice’s value and profitability so that it’s more attractive to a potential buyer, it becomes more valuable to you. Value such as the ultimate sale price AND interim perks along the way, like increased cash flow.
Last week, I earned my Certified Exit Planning Advisor designation (CEPA). This may sound like a strange designation for an advisor who focuses on financial planning and investment management. But my client’s practices are a large portion of their accumulated net worth, if not the biggest portion. My feeling is that exit planning is a mission critical component of their overall wealth building process.
There are many practice management consultants out there who can help with fine tuning your practice, and I love working with them to make sure your personal and business goals align, but true exit planning starts with personal financial planning. In the many calls I’ve had with ODs about the potential sale of their practice, there are 4 main exit planning questions I ask:
- Have you accumulated enough wealth between investments and practice value to retire with your desired lifestyle?
- What are you going to do with your free time if you retire?
- What would happen to your practice if something happened to you today? Would it still be able to sell at the same price as you running it?
- If you do have to continue to work, do you want to do that for yourself or for someone else?
Do you know the answers to those questions? If you said no, you’re not alone. Many doctors don’t.
Personal planning should be a starting point, not an afterthought. The value your practice produces for you and your family is probably the main reason you own it. And planning is not a one-time event: life changes, and your plan should change with it. Remember, you will exit your practice someday, one way or another. Start working on it now!
FOR EDUCATIONAL AND INFORMATIONAL PURPOSES ONLY.
The views expressed here are as of the date of publication and are subject to change. This information should not be construed as investment advice. It is presented for information purposes only and is not intended to be either a specific offer (or recommendation) Hayes Wealth Advisors to sell or provide, or a specific invitation for any investor. Information herein may have been obtained from sources believed to be reliable, Hayes Wealth Advisors is unable to warrant its accuracy.
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