What Happens to Your Practice When You’re Ready to Step Away?
Most chiropractors spend years building their practices. You build relationships with patients, develop a reputation in your community, create systems that work for you and, hopefully, build a business with value beyond the income it provides today.
But at some point, every practice owner has to answer a question that is surprisingly easy to put off:
What happens to the practice when you’re no longer the one running it?
You may be years away from retirement. You may not even know when you want to retire. That doesn’t mean it’s too early to think about succession. In fact, the more time you give yourself, the more options you may have when you eventually decide to step away.
In This Article
- What Do You Want Your Transition to Look Like?
- Could Someone Else Step Into Your Practice?
- What About Bringing in an Associate?
- Where Do You Find a Potential Associate?
- Know What Your Practice Is Worth
- Don’t Build the Plan Alone
- Have a Plan B
- Succession Planning Resources
What Do You Want Your Transition to Look Like?
There is no single right way to leave practice.
You might want to sell to another chiropractor and walk away completely. You might prefer to bring in an associate who could eventually take over. Maybe you already have an associate or partner who is interested in ownership. Or perhaps your ideal transition involves gradually reducing your hours while another doctor takes on more responsibility.
Closing the practice is also a legitimate plan. Not every practice needs to be sold.
The important thing is to think about the outcome you want before you need it to happen.
Your preferred destination can influence decisions you make years beforehand. A doctor hoping to sell to an outside buyer may prepare differently from one hoping to develop an associate into a future owner. Someone who wants to remain involved for several years after a sale may have different priorities from someone who wants a clean break.
You don’t need to know exactly when you’ll retire to start asking yourself what you’d like that transition to look like.
Could Someone Else Step Into Your Practice?
A successful practice and a transferable practice aren’t necessarily the same thing. Try looking at your office through the eyes of someone considering taking it over.
Could another doctor understand how the business operates? Are your financial and business records organized? Are important processes documented? Does your staff understand their roles? Are key vendor, technology and operational relationships easy to identify? Is the practice built around systems that someone else could reasonably continue? And perhaps most importantly, how much of the practice depends entirely on you?
That doesn’t mean stripping away the personality or clinical approach that helped make your practice successful. But if selling or transferring the practice is part of your eventual plan, it is worth considering how easily another owner could step into what you have built.
It can also be helpful to understand how someone outside the practice might view its value and transferability. This is an area where an experienced practice valuation or transition professional can provide perspective well before an actual sale is on the table.
What About Bringing in an Associate?
For many practice owners, this seems like a natural succession plan:
I’ll bring in a younger chiropractor, they’ll work with me for a few years, and eventually they’ll buy the practice.
That can happen. But hiring an associate and developing a successor are not the same thing.
If future ownership is a possibility, both people need to understand what they are working toward.
Does the associate actually want to own a practice? Do you share a similar vision for its future? Are you prepared to eventually give someone else control over something you spent years building? Can the practice support both doctors during a transition? Do you have compatible expectations about timing and what the practice may eventually be worth?
And there is another question that deserves consideration:
What happens if one of you changes your mind?
An associate may become an excellent successor. They have an opportunity to learn the practice, get to know its patients and staff, and understand its day-to-day operations before taking on ownership. But plans change. The right associate for your practice today may not ultimately want to become an owner, or may not be the right person to take over years from now.
If succession is the long-term goal, be open about that possibility without treating the eventual sale as a foregone conclusion.
Where Do You Find a Potential Associate?
Finding a future successor may begin with building relationships, not placing a “practice for sale” ad.
If bringing another chiropractor into the practice could be part of your long-term plan, you don’t have to wait until retirement is around the corner to start meeting potential candidates.
- Start with profession-specific resources. NYSCA members can advertise associate and practice opportunities through the NYSCA Classifieds. Chiropractic colleges also commonly maintain career services, job boards or other programs connecting practices with students and graduates.
- Build relationships with students. Consider making your practice available to chiropractic students looking for opportunities to shadow practicing doctors. Depending on the college and your practice circumstances, clinical rotations, career fairs, and other college programs may provide additional opportunities to meet students preparing to enter practice. A student who spends time in your office today may or may not eventually become an associate. That isn’t the purpose of the experience. But staying connected to students and early-career chiropractors expands your professional network and gives you opportunities to meet people who may someday be a good fit.
- Look within your own professional community. District meetings, continuing education programs, professional events and conversations with colleagues can all help you connect with doctors at different stages of their careers. Letting trusted colleagues know that you are thinking about bringing another doctor into the practice can open doors that a classified ad alone may not.
- And sometimes the future chiropractor may already be in your office. A chiropractic assistant or other staff member who develops a strong interest in patient care and the profession may decide to explore chiropractic as a career. Encouraging an interested employee to learn more about chiropractic education can be another way to support the next generation of the profession. Completing chiropractic school is a significant personal, academic and financial commitment, of course, and should never carry an expectation that the individual will eventually return to the practice.
The goal isn’t necessarily to identify your successor today. It’s to create opportunities to meet and build relationships with people who could become part of the practice’s future.
Know What Your Practice Is Worth
After spending 20, 30 or 40 years building a practice, it can be difficult to separate what the practice means to you from what someone else may be willing and able to pay for it. They aren’t necessarily the same number.
A potential buyer, lender or valuation professional will look at the business differently than the person who built it. Revenue is part of the picture, but so are profitability, financial history, assets, market conditions, transferability and other characteristics of the business.
That is one reason it can be useful to understand the financial health and potential value of your practice before you are ready to sell. Discovering an issue several years ahead may give you time to address it. Discovering it after you have chosen a retirement date gives you far fewer options.
You don’t have to become an expert in business valuation yourself. You do need to recognize when it is time to involve someone who is.
Don’t Build the Plan Alone
At some point, succession planning moves beyond deciding what you want.
A practice transition can raise questions involving valuation, taxes, contracts, financing, insurance, real estate, employment arrangements and other business and professional considerations. Those questions don’t all belong to the same adviser, and they don’t all belong to NYSCA.
Depending on your circumstances, your planning team may include an attorney, accountant or tax professional, financial adviser, practice valuation or brokerage professional, and insurance or risk-management adviser. You may not need all of those people today. But knowing when a decision has moved beyond your own expertise is part of planning well.
The earlier you identify questions that require specialized advice, the less likely you are to build an entire succession plan around an assumption that turns out not to work.
Have a Plan B
Even a carefully considered succession plan can change.
An associate who once seemed like the natural successor may decide ownership isn’t for them. A prospective buyer may not be able to obtain financing. Your retirement timeline may change. Health or family circumstances could force you to leave practice sooner than expected.
That makes one question particularly important:
What would happen to my practice if I had to stop practicing sooner than planned?
Your preferred succession plan and your contingency plan do not have to be the same.
Thinking through both can help protect the continuity of the practice and help you prepare for your responsibilities to patients, staff and others if circumstances change unexpectedly.
You Don’t Have to Figure It All Out Today
Succession planning can sound like something you do when retirement is right around the corner. It doesn’t have to be.
- If you’re ten years away, your first step might simply be deciding whether you hope to sell the practice someday.
- If you’re five years away, it may be time to understand what your practice is worth and whether there are things you can do now to make an eventual transition easier.
- If you’re considering bringing in an associate, think about whether you are hiring someone to work in your practice or potentially looking for someone who could someday own it.
- And if retirement is getting closer, it may be time to turn those ideas into a more concrete plan and begin assembling the professionals who can help you carry it out.
The goal isn’t to have every answer years in advance. It’s to avoid waiting until you need all the answers at once.
Succession Planning Resources
Succession planning can eventually involve specialized questions about practice valuation, financing, taxation, contracts and the structure of a potential sale. Those decisions should be made with professionals qualified to advise you based on your individual circumstances.
You don’t need to become an expert in all of those areas yourself. Understanding the issues, knowing what questions to ask and knowing when to bring in additional expertise are important parts of planning well.
These resources from trusted chiropractic organizations can help you explore some of those topics in greater depth.
- NCMIC: Retirement and Succession Planning for You and Your Practice
A broader look at preparing for retirement, identifying a potential successor, transitioning a practice and planning for unexpected circumstances. - NCMIC: What No One Tells You About Selling and Buying Practices
A multi-part webinar series exploring practice value, potential buyers and successors, financing and some of the challenges that can arise when buying or selling a chiropractic practice. - ACA: Smart Practice Sales: Retirement Planning Insights for Chiropractors
A chiropractic-specific discussion of preparing for a practice sale, understanding value, considering different transition models and involving appropriate professional advisers.
What Happens Next Is Part of What You’re Building Now
Succession planning isn’t just about getting out of practice. It’s about deciding what happens to something you may have spent a significant part of your career building: your patients, your staff, your reputation, your community relationships and the practice itself.
You don’t have to decide today exactly how the story ends. But giving yourself time to think about it gives you a much better chance of being the one who gets to decide.
Getting closer to retirement?
NYSCA’s Retirement & Practice Transition resource (coming soon) can help members work through the practical steps involved in preparing to sell, transition or close a New York chiropractic practice.