Today on the Podcast: Plan Your Exit Now: Prepping Your Physical Therapy Business to Sell w / Jamey Schrier, PT
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About This Episode
Today we’re talking to Jamey Schrier from Practice Freedom U.
Jamey has helped hundreds of growth-minded practice owners achieve uncommon success without the burden of working excessively in the clinic.
Today, we’re talking about something we don’t think about often: how are you going to exit your business? And how can you make your business attractive to future buyers – whether you plan to sell 1 year, 5, or 10 years from now.
Listen Above or Read The Summary Here:
Neil and Jamey discuss the critical topic of preparing your physical therapy practice for sale, emphasizing the importance of planning in advance. Jamey asserts that practice owners should start thinking about their exit strategy as soon as they can, ideally at least two years before they intend to sell. He argues that “the idea around selling is creating what I refer to as a sale-ready practice. It’s a business that has all of the components that would be attractive for someone else to buy.”
The Importance of Timing and Preparation
Jamey advises against reactive decision-making when it comes to selling a practice. “Selling on emotion… puts you at a place of very low power,” he notes. Practice owners must cultivate a well-prepared business environment, positioning themselves to sell at a time when the practice is thriving. The key is to avoid distress-driven selling and instead aim for a strategic sale that leverages the true value of the business.
- Runway for Preparation: Jamey recommends giving yourself at least 18 to 24 months before selling to ensure the business can be presented in its best light. This allows time to address any weaknesses and improve profitability.
- Value Creation: He explains that the business should not only be in good health in terms of profits but also structured well enough that it can thrive without the owner’s daily involvement.
Avoiding Common Mistakes
Jamey identifies some frequent pitfalls practice owners face when considering a sale. One major mistake is overestimating the impact of emotional decisions on the sale process. “Too many times, practice owners get caught up in emotions, leading to impulsive decisions,” he cautions. Additionally, seeking advice from online groups and basing decisions on market trends can result in poor judgment. “You want to sell when things are going well, not when you’re in a pinch,” he advises.
As owners examine the sale of their practice, they need to consider several critical factors:
- Understand Your EBITDA: Jamey emphasizes the significance of EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) in determining the value of their practice. A higher EBITDA translates to a more appealing sale price.
- Solid Leadership and Systems: Owners must ensure that their practice is not overly reliant on them and should establish strong systems and a competent leadership team to manage operations smoothly during and after the sale.
Crafting a Future Vision
Going beyond preparing for the sale, Jamey encourages practice owners to take a long-term view of their business. He suggests asking oneself, “If anything was possible, what do I want this business to be?” This visionary approach helps align day-to-day decisions with long-term objectives, allowing practice owners to build a business that not only serves them today but is also attractive to potential buyers in the future.
- Creating a Legacy: Jamey discusses the benefits of establishing a long-term vision, enabling owners to grow their practice into a valuable asset and potentially transition it to family members, partners, or employees.
- Importance of Clarity: Clarity around goals leads to actionable steps that can transform the management of a business from reactive to proactive, ultimately enhancing its marketability.
In his closing reflections, Jamey reminds owners to “embrace the idea of a sale-ready practice” and highlights the value of having mentorship or coaching to guide them through this journey. Overall, the transition from practice owner to having a thriving, sale-ready asset requires thoughtful planning, preparation, and a clear vision for the future.
Common Questions Practice Owners Ask About This Topic:
- What are the best strategies for selling a physical therapy practice?
- How do I prepare my chiropractic clinic for an exit strategy?
- What factors make a physical therapy business attractive to buyers?
- How long should I plan my exit strategy for my practice?
- What financial considerations are important when selling a healthcare business?
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See how the right marketing ideas can help you grow your Physical Therapy or Chiropractic clinic