Effective exit plan can help maximize practice's value

As a medical practitioner, you have more than enough daily crises competing for your attention. That's one reason why so many of your peers fail to plan adequately for that inevitable day when they will part company with their practice.

While there is no way for you to know for sure when that day will come, you can be certain that it will come.

That leaves only the question of how you will take your leave.

Chances are that one of these paths is best for your situation. But which one? And which one would be disastrous for you or your heirs? Whether your retirement is just around the corner or years away, you owe it to yourself to begin considering these questions right now.

"A well-designed exit plan has many advantages," said Richard H. Marsh, business intermediary, Jenkintown, PA. "Among other things, a good plan will help the owner to maximize the value of the practice. It will also, make it possible for the owner to leave the practice under his own terms at the time of his own choosing."

"The number one mistake in exit planning is waiting too late to begin," said Greg Austin, CPA, exit planning professional and a principal in Clayton Capital Partners, St. Louis. He said that waiting until it's too late to do a thorough job in exit planning often forces owners to sell at a disadvantage.

In some ways, it's understandable why a physician will neglect planning for the future. With so much time spent dealing with patient issues, personnel problems, ensuring that there is enough cash to pay the bills, and still trying to eke out some semblance of a family life, most practitioners neglect planning for their eventual exit. That's unfortunate, because one thing is certain: eventually every physician must exit the practice.

"Without an exit plan prepared in advance, owners who reach the point where they are emotionally ready to leave their businesses often do not know what to do or where to begin," Marsh said.

What is an exit plan?

According to Austin, most business owners have one or more of the following:

"While these items are key ingredients in a formal exit plan, no single item is a plan in itself," Austin said. "A well-prepared plan will use a team of professional advisors-attorney, CPA, financial planner/insurance professional-all focused on meeting the practice owner's exit goals."