To protect your practice’s reputation, operational continuity and professional legacy, it’s essential to have a well-crafted transition strategy in place before an unexpected crisis strikes.
To protect your practice’s reputation, operational continuity and professional legacy, it’s essential to have a well-crafted transition strategy in place before an unexpected crisis strikes.When a DC has a sudden need to exit practice ownership due to illness, injury or sudden changes in personal circumstances, it throws the doctor, their family and staff into a chaotic tailspin. The emotional burden, financial stress and time pressure involved in emergency sales are incredibly difficult to manage. However, if you—or your loved ones—ever find yourselves in this situation, understanding what steps to take is crucial to protect both your family and your legacy.
How does an emergency sale affect practice value?
Unfortunately, the impact on value in an emergency sale is often significant. Most of a chiropractic practice’s worth comes from goodwill—the intangible value from the clinic’s reputation that enables a new owner to generate a similar profit after a sale. When profit drops, goodwill fades fast. If a practice becomes doctorless and there’s no revenue coming in, buyers and lenders assume patients have moved on, severely damaging the perception and reality of the goodwill and stability for a new owner. Within 90 days, a doctorless clinic often loses all goodwill, leaving only the value of equipment and furnishings, which is typically pennies on the dollar compared to its prior value.
Having other doctors on staff can preserve value; however, uncertainty over the practice’s future can lead to staff departures or patient attrition. And in some states, a non-DC spouse or estate cannot legally operate the clinic for long, forcing a faster sale. When sale timing becomes critical, pricing flexibility is often necessary, further reducing the final sale value.
How will I be compensated in an emergency sale?
Because patient visits are often declining and the seller typically isn’t available to help with the transition, buyers and lenders typically see more risk in emergency sales. So lending is uncommon for these sales; instead, buyers often request owner financing or make offers in which the amount you’re paid depends on how many patients stay after the sale.
When do I need to act?
Immediately. The moment it becomes clear that you need to sell on a tight timeline, you’re in a race against time to protect the value of your practice. While bringing in a coverage doctor right away is crucial, it’s important to know that this usually slows the loss of value but does not stop it. Even the best coverage doctor will often have limited availability, unfamiliarity with patients and lower connection to the practice, which translates to a drop in visit volume and profit. Additionally, implement your sale plan immediately; in an emergency sale, every day that passes without moving the sale forward further reduces your practice’s value.
Where will I find a successor?
Speed is critical, which means relying on personal contacts or word-of-mouth won’t be enough. A chiropractic-specific broker could have the buyer pool and exposure to help, but only if there’s a doctor in place to keep the clinic open.
What professional help do I need?
In an emergency sale, you or your loved ones need a trusted, experienced team that can act fast. This could include professionals to handle buyer outreach, marketing, negotiations and coordination; a business attorney familiar with small business sales and Small Business Administration lending (if needed) and a CPA to provide current financials and answer financial questions.
Emergency sale proceeds are often lower, so families may try to manage the deal themselves to save money, but emergency sales come with intense time pressure, emotional strain and rapidly-declining value. Without expert guidance, even serious buyers can hesitate, get overwhelmed or walk away.
When is an emergency sale most viable?
While never ideal, some practices are better positioned to withstand the pressures of an emergency sale. For example, practices located in metro areas and supported by long-term staff willing to stay through the transition will attract more buyer attention. A cash cushion to cover overhead despite revenue fluctuations is crucial to buy time for a sale. Having at least one doctor already on staff or the ability to quickly bring in coverage helps preserve patient flow and goodwill. Flexibility on terms and pricing are often needed for a short timeline. Finally, practices in an established relationship with a chiropractic broker as part of their pre-retirement planning have a critical advantage: They know exactly who to call, eliminating the delay of figuring out who to hire, learning how to get started and making overwhelming decisions during an already difficult time.
What can I do now to protect my family and practice?
While no one wants to imagine needing an emergency exit, planning ahead can make all the difference.
- Keep clean records: Maintain updated financials with clear documentation of any personal expenses, so true profit is evident—even if you’re not able to explain it yourself.
- Identify patient care options: Consider hiring a second doctor, explore relief coverage options and timelines and build relationships with local DCs who could step in if needed. That way, your family will know exactly who to call if you’re unable to practice.
- Establish a power of attorney: Designate someone you trust to make legal and financial decisions on your behalf.
- Consider a strategic retirement plan: If you’re at or approaching retirement age, think carefully about timing so you can sell when it’s a want and not a need. If you’re not ready to stop practicing, consider other options, such as a sale where you continue patient care after closing.
Final thoughts
An emergency sale is one of the most stressful, high-stakes scenarios a DC can face. If you’re not in this situation yet, use this as your motivation: Putting plans in place now is one of the most valuable gifts you can give your loved ones.
Crystal Misenheimer, a leading expert in chiropractic practice sales, is the first and only chiropractic broker to earn the coveted Certified Business Intermediary (CBI) designation from the International Business Brokers Association (IBBA) and sets the gold standard in expertise, quality and service. A former clinic owner, she is uniquely qualified to provide comprehensive support on the complexities of clinic valuations and practice sales. Contact Misenheimer and her team at 888-508-9197, marketplace@progressivepracticesales.com or online at progressivepracticesales.com.
