The COVID-19 pandemic saw an increase in demand for healthcare services, in addition to an aging population. As a result, the demand for ownership of healthcare businesses has risen, and now could be the ideal opportunity for you to sell. In order to help, we are going to look at the top five things to consider when selling your medical practice in Metro Vancouver.
Innovations in medical science and health technology have proven to be encouraging more and more people to see their doctor across a wide range of health issues. This trend means that demand for companies wanting to purchase medical practices has become a mainstream investment strategy across Canada, and indeed in Vancouver.
These investment companies have proven to be hungry to grow through clinic acquisitions, and they understand the value that each addition to their portfolio can have.
For those with medical practices looking to sell, this is great news and something that can be taken advantage of. Selling a medical practice is no straightforward commercial property sale, and due diligence needs to be carried out by all parties involved in the sale.
With the advancements and demand in services from medical practice, it is safe to say there will be interest in your medical practice, particularly if located in a prime area of Metro Vancouver.
The dominating factor in the sale of your medical practice will be based on your success. The more profitable your medical practice is, the higher the premium investors will be likely to pay.
To understand the value of your medical practice, there are a few factors to understand:
Much like a traditional residential or commercial property, you will need to have a valuation carried out on your medical practice. The valuation should consider not only the pricing of your practice in the current climate but also the potential of what the clinic can offer in the future.
It is the best method of helping you to evaluate the range of offers you could be pitched, particularly if any offers are made at the immediate outset.
Location plays an important role to investors when they look to acquire additional medical practices. What is the neighborhood around your practice like? Is there a high crime rate that could deter potential investors? How many local competitors are also in the nearby surrounding areas?
Your lease situation will also come under scrutiny from prospective investors. A longer-term lease is worth considerably more due to the risk of a rent hike, or the lesser need to relocate.
A successful medical practice would not be successful without a calibre of experienced team members running it.
Prospective investors will pay close attention to the skills and experience of the individuals running the business, in addition to whether or not it can operate with and without certain individuals.
Employment length within the practice, qualifications, and experience, in addition to any disciplinary actions taken will also be considerations that investors look at, so you should consider examining your practice’s team and how best to showcase this to interested buyers.
With the advancements already made in health technology and equipment, being at the cutting-edge of these advancements is hugely beneficial to you as a seller and prospective investors. A clinic with the latest technology will be significantly worth more to an investor than a clinic that requires an overhaul in equipment and practices.
Failing to upgrade technology throughout operating a medical practice can lead to a decline in the value, regardless of the location, or the experience of the team.
Many hands-on practice owners become the pillars on which the medical practice cannot fully stand without. Many medical practice sales fall down on the indispensability of its owner, particularly if the business is unable to function properly as other members of the team/new employees cannot undertake the role that you as an owner have.
Furthermore, if the clients of your practice have a certain commitment to you through their own pledges, and are likely to leave the practice to follow you on your journey, this will be seen as an immediate loss of custom. Investors want to see a loyal customer base to the clinic rather than individuals, so it is crucial to ascertain how capable the business is of being able to run without you when selling on, whilst retaining current clients.
The key to selling your practice is by being proactive. Arranging a valuation at the earliest circumstance, irrelevant of when you intend to sell, will allow you to plan around prospective offers. If there is work that can be carried out to bolster the value, you can weigh up the costs of carrying out the work in order to achieve the best value possible (such as upgrading any medical technology).
You should also pay close attention to policy changes implemented by the government. Changes to these policies impact what is and isn’t covered in the sale, and you may find service gaps that require filling. Filling them correctly could raise your value substantially.
It is important to ensure that you seek the best advice in selling your practice above all else. Partnering with an experienced commercial agent with demonstrable abilities at selling medical practices will place you in safe, capable hands throughout the entire process. This includes a genuine, practical valuation in the opening stages, through to advising you on offers and the legalities of selling a medical practice.