10 ways to kill your clinic
A tongue-in-cheek look at selling your practice
By Terry Flanagan, DC

Most chiropractors consider their practice an investment and at some point think about selling it as a part of their retirement package. Most — but not all. Some chiropractors want to work up until the very end.

Although we are bombarded with advice related to growing a practice, very little information is available to support those who want to stay in practice until their last day on earth.

Here are 10 simple tongue-in-cheek rules to follow if you would like to work until you drop. It is very important for you to follow them carefully. Failure to do so might cause you to be able to sell your practice, become rich, and find yourself idle in retirement.

Have fun with the rules!

Rule 1: Don’t write a business plan. Business plan? Who needs one? You already know what to expect and what is going to happen next.

Planning means setting priorities, organizing your thoughts, and aligning your resources. All of that takes too much time.

Rule 2: Avoid planning of any kind. Everyone knows how unpleasant it can be to meet with financial and estate planners. They ask too many questions and make you think about your own mortality.

This is very bad karma if you are planning to work forever. Besides, most of what you have is probably going into making ends meet anyway.

Rule 3: Now that your practice is successful, take it easy. Your practice has reached a manageable size. If you grow it further, you will have to work harder.

A practice that has reached a plateau is much easier to run. That type of practice must surely be more valuable than one that is growing and puts demands on your time.

Just relax. You’re not going anywhere anyway

Rule 4: When you sell your practice, don’t get a practice financial valuation. And never get one from an accredited professional.

This is a total waste of money. You’ve heard about a doctor who sold his practice for a good price. Or, maybe your realtor or attorney knows someone who sold a practice. Call him up and ask him what you should do. Rely on his expertise and save yourself a few bucks.

Or, use the “rule of thumb” method. Just multiply some number by something. Anything so simple and time-honored has to be accurate. Among all of these sources, you’ll find someone who will agree with your expectations.

Rule 5: When you buy a practice, don’t get a financial valuation. See Rule 4. Change “sell” to “buy.”

With the right advice, you could actually enter the practice feet first.

Rule 6: Time is not of the essence. You wouldn’t want to think about making lifestyle changes too far in advance. Buyers of practices always seem like they are in a hurry. They always come to you with some sob story, such as, “I am living off my life savings and am anxious to buy your practice.”

This is just an act. They have plenty of time to wait until you get organized. Buyers’ representatives might call and try to give you the idea that deadlines are meaningful. Ignore such arbitrary demands. Be sure to surround yourself with like-minded advisors.

Rule 7: Don’t keep your financial information and stats up to date. One of the things you always have enough of is time. Rule 6 proved buyers don’t mind waiting. And, after all, you’re a doctor. You know there are always plenty of warning signals when something bad is going to happen.

Besides, gathering and entering years of data takes just a little longer than entering current figures. Even in the case of an untimely event on your part, your family can easily figure out what you are doing and where to find all the information they are going to need.

And they will enjoy the joke you played on them.

Rule 8: Don’t spend time or money training your staff. You’re the doctor. The patients come to see you. It’s all about you.

And there is the added value of you doing the buyer a favor. A new doctor probably wouldn’t see the value in keeping a highly trained, well organized staff in place.

Besides, since the staff already knows all the patients, they might interfere with the new doctor establishing herself. New buyers usually want to buy a practice and then dismantle it anyway.

Rule 9: When you sell your practice, keep some skeletons in the closet. Disclosing negative information about your practice will only lower its value. If it surfaces before closing, you can always dance around the issue.

And besides, you’re sure there wasn’t anything about indemnifying the buyer in that small print.

Rule 10: They’ll always see it your way. You might have let your guard down and signed a Letter of Intent. Don’t worry about it. All is not lost. There will be four to six weeks for you to renegotiate the deal on a daily basis.

The hook is already in the buyer’s mouth. Now is the time to be creative. Demand payment for unreported revenues. Come up with new add-backs to improve your apparent cash flow. As a last resort, just say you want more money than any of the figures will support. After all, yours is a very special practice.

If you follow these simple rules, your job will be secure as long as you remain physically able to perform. No one will ever want to buy your practice. This is, of course, unless your practice goes belly up in the interim.

Terry Flanagan, DC, DABCO, MAppSc, MPH, MBA, has been in chiropractic practice for 24 years. He also owns Circumference, a company designed to perform practice valuations and practice brokerage. He is certified to perform practice valuations through the National Association of Certified Valuation Analysts (NACVA). He can be reached at TerryF@aol.com.