For many professionals, selling a practice can be a transaction that signifies a lifetime of work and accomplishment. The attorneys at Azrael, Franz, Schwab & Lipowitz touch on several common questions that come with the selling of your professional practice.
There are many reasons why one might wish to sell their professional practice. Often, many questions arise while considering this significant decision.
- When is the right time to sell a professional practice? Each practice owner has unique and specific conditions that will influence the timing of a sale. Factors that contribute to this include the status of an owner’s financial plan; whether tax liabilities and estate planning documents have been arranged in a secure way; and how volatile the market is with respect to the specific field of practice.
- How long does it take to sell a professional practice? Each owner’s individual circumstances will uniquely affect the timeline of a transaction. Once key issues and personal objectives are clearly defined, it may be easier to estimate the time that a sale will take.
On average, the time it takes from sale initiation to completion can be anywhere from 4-8 months.
- How much can a professional practice be sold for? A business valuation and/or appraisal by an experienced professional can provide the practice owner with a better idea of how much the practice is worth. The actual sale however, will be the causal factor for its definitive worth.
- What kind of groundwork is required for the selling of a professional practice? Suitable preparation well before a sale can significantly increase the value of a professional practice. Consulting an experienced attorney, accountant and investment advisor will ensure that the practice owner is well-equipped for any possible transaction that might take place.
- How does the sales process work? There are multiple stages in which matters are handled during the sale of a professional practice. First, a practice owner must obtain a practice appraisal which can identify the strong and weak points of the business. Next, the practice owner or an official representative can advertise the practice for sale and solicit interested buyers through promotion and negotiation as needed. Finally, the purchaser’s due diligence will be overseen by an attorney and the terms of sales will be finalized, at which point the transaction will reach completion.
- What does a practice owner need to communicate to a practice buyer? Both too much information and not enough information can have adverse consequences. Divulging the proper amount of information includes disclosing issues that are necessary for a purchaser to make a decision concerning what amount to bid. An experienced attorney can significantly help in determining what to relay to a purchaser.
There are many factors that contribute to the process of selling a professional practice. Preliminary planning and preparation can be the key to achieving favorable results. Consulting with an attorney who is well versed in business transactions and the sales of professional practices can help to ensure that the right steps are being taken to elicit a favorable outcome for a practice owner. For more information regarding the selling of a professional practice, contact the attorneys at Azrael, Franz, Schwab & Lipowitz today.