Sale of Practice

[Crazyroadtodublin]

Hello all,

 

I have been offered a buy out of my practice.  Any thoughts on the sale of a solo practice to a large group for cash.  I have achieved fi and plan to practice for another 5 to 10 years but am slightly concerned about not being my own boss.

 

Thanks

[Zaphod]

Presuming you have to stay on?

[jfoxcpacfp]

Wow, so many considerations even beyond whether you will be your own boss. What will happen to your employees, how will your benefits be affected, how will your patients be treated, how fair is the price, and so forth. Definitely something to discuss with your CPA and run scenarios with your financial planner.

That said, if you really enjoy running your practice and had planned to do that for several years more and the loss of control is bothering you, money can't replace that feeling of satisfaction and accomplishment. You are obviously good at what you do if you are being offered a lucrative buy-out and should be able to sell after a few more years. Be sure your estate plan has clear instructions for your surviving spouse in the event of your untimely death, however. If you aren't grooming a successor, that might be a task to work on as your practice value would be greatly reduced should you be the only face on your business and pass away.

[jfoxcpacfp]

Another thought - should you take the deal, be sure to have your CPA calculate the tax for taking the money in a lump sum versus spreading out over a period of years. The difference in LTCG tax owed could be substantial. Also, the amount allocated to a non-compete versus goodwill will make a difference. This is a point of negotiation.

[Crazyroadtodublin]

Yes for at least three years.