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GUIDE · MEDICAL PRACTICES

Thinking of selling your practice?
What to organise before it goes on the market.

A plain guide to the work that's best done before a buyer looks: your accounts, your lease and agreements, your tax and super, and your own plans. About a six-minute read.

Jump to the checklist

IN THIS GUIDE

  1. 01The short answer
  2. 02Who does what
  3. 03Decide what you want first
  4. 04Get your accounts ready
  5. 05Check the lease and agreements
  6. 06Your tax and super
  7. 07Staff, patients and timing
  8. 08A fictional example
  9. 09What it touches at home
  10. 10The checklist

General information, not advice. Your accountant, lawyer and adviser advise on your situation.

THE SHORT ANSWER

Six things to sort, in this order.

Buyers and their advisers look closely at a practice before they make an offer. Anything unclear becomes a reason to lower the price or slow the sale down.

Most of it is easier to sort before the practice goes on the market than in the middle of a sale.

THE USUAL ORDERBEFORE YOU SELL
  1. 1

    Decide when and how you want to leave

    You · Accountant
    YOU DECIDE
  2. 2

    Get your accounts ready

    Accountant
  3. 3

    Have the practice valued

    Valuer · Accountant
  4. 4

    Check the lease and your agreements

    Lawyer · Landlord
  5. 5

    Work out your tax and super

    Accountant · Adviser
  6. 6

    Then choose how to sell

    Broker · Lawyer

WHO DOES WHAT

Every part has an owner.

Your professionals give the advice. The hard part is getting their work done in the right order, before a buyer starts asking questions.

  • When and how you leaveYou
  • Your accountsYour accountant
  • What the practice is worthYour valuer
  • Finding a buyerYour broker
  • The sale contract and any restraintYour lawyer
  • Moving the lease to the buyerLandlord and lawyer
  • Super and retirementYour adviser
  • The price you acceptYou

STEP 1

Decide what you want first.

Before you talk to a broker or a buyer, decide a few things for yourself and write them down:

  • When you want to stop
  • Whether you'll keep working for the buyer, and for how long
  • What you need from the sale to retire or move on
  • Who you'd like to sell to: an outside buyer, a colleague or a group

Buyers will ask all of these. Clear answers make everything after this easier.

STEPS 2 AND 3

Get your accounts ready. Then value it.

Buyers look at what the practice really earns. That means your accounts with your own pay, one-off costs and any rent you pay yourself adjusted, so they show the practice as a new owner would run it.

Ask your accountant to prepare the last three years this way, and to list any tax debts or payment plans. Then have the practice valued on those numbers.

If most patients and referrals come to you personally, say so early. Your accountant can show what that means for the price, and you may need a handover period.

If the accounts don't show it, the buyer won't pay for it.

STEP 4

Check the lease and your agreements.

A buyer needs the lease to move across, and the landlord usually has to agree. Their bank may also want a certain amount of time left on it.

Ask your lawyer to read every agreement and check:

  • How long is left on the lease, and whether it can be transferred
  • Any personal guarantees you've given
  • Any restraint, and how it fits your plans after the sale
  • Contracts that change or end if the practice is sold

STEP 5

Work out your tax and super before you agree terms.

The date you sign can change your tax and how much you can put into super. Your accountant and adviser need to look at it before you agree terms, not just before settlement.

Ask them what the sale means for your retirement income, and when the money will actually arrive.

THEN

Plan when staff and patients hear.

Word gets out. Decide who tells staff, patients and referrers, when, and how. Nothing is said until it's signed.

Agree with the buyer how patients are introduced and how records move across. Then choose how to sell, with your broker and lawyer.

A FICTIONAL EXAMPLE

Same practice. Same doctor.
Two starts.

The same work gets done.
Only the timing changes.

Dr Lyn owns a solo GP practice and wants to retire in about eighteen months. She plans to sell to an outside buyer through a broker.

ON THE MARKET FIRST

Listed first, sorted later.

  1. MONTH 1

    The practice goes on the market on a rough estimate of its value.

  2. MONTH 3

    The buyer's accountant adjusts Lyn's figures. The offer comes in well below the asking price.

  3. MONTH 5

    The lease has two years left and needs the landlord's consent. The buyer's bank wants a longer lease first.

  4. MONTH 7

    Lyn's accountant finds the signing date affects her super. The terms are reopened.

Sold months later than she hoped, for less than she expected.

ORGANISED FIRST

Sorted first, then listed.

  1. MONTHS 1 TO 2

    Lyn decides her date and agrees to stay on for six months. Her accountant prepares three years of adjusted accounts.

  2. MONTH 3

    The practice is valued. The lawyer checks the lease and agreements. The landlord agrees to extend the lease.

  3. MONTH 4

    Her accountant and adviser work out her tax and super, and the best time to sign.

  4. MONTH 5

    The practice goes on the market with clear numbers and a lease the buyer's bank will accept.

  5. MONTH 9

    The contract is signed. Staff and patients are told as planned.

Fewer surprises for the buyer, so fewer reasons to lower the price.

A fictional example. Names and details are made up.

BEYOND THE PRACTICE

What it touches at home.

Selling changes more than the practice. Flag these early so your adviser, accountant and lawyer can sort them at the right time.

SELLING

Selling your practice
  • When the sale money arrives, and the tax on itAccountant
  • Super and retirement incomeAdviser
  • Guarantees released from the lease and loanLawyer · Bank
  • The insurance you still needAdviser
  • Your will and powers of attorneyLawyer

Flag it early. Decide when.

THE CHECKLIST

One page to share with
your accountant.

Print it, tick it, or send it to your accountant and lawyer before you talk to a broker, so everyone works from the same list.

Download the checklist (PDF)
  • Your target date and plans after the sale, in writing
  • Three years of accounts adjusted by your accountant
  • Tax debts and payment plans listed
  • The practice valued on those accounts
  • Lease checked: time left, transfer and landlord consent
  • Every agreement read by your lawyer
  • Personal guarantees listed
  • Tax and super worked out before you agree terms
  • Plan agreed for telling staff, patients and referrers
  • What it touches at home flagged to your adviser

WHEN YOU'RE READY

How we coordinate a sale.

Twelve weeks, one fixed fee, your professionals stay. See the steps, week by week.

Selling or stepping back

Not sure if you need us?

A short walkthrough will tell you.

You'll leave with a clear view of what needs to happen, and in what order. If your accountant can handle it, we'll say so.

Arrange a walkthrough

Clients across Australia. Most walkthroughs are by video.

WHAT HAPPENS IN A WALKTHROUGH

  1. 01

    We listen

    Your situation, in your words, and who's already involved.

  2. 02

    We map it

    What needs to happen, who does it, and in what order.

  3. 03

    You decide

    Whether to go further with us, or carry it on yourself.

FOR ACCOUNTANTS, ADVISERS AND BANKERS

You give the advice.
We run the sequence.

We don't replace you. We make sure your work connects to everything else happening around your client. Your client stays your client.

How we work with professionals