Even as the troubled asset purchase model and physician practice management companies (PPMCs) continue to decline as viable business models, there is still an increasing interest in divestiture options.

Whether you intend to sell to junior partners or to a local colleague, or purse the more recent options of sale to a hospital, multi-specialty clinic or PPMC, the price and terms will depend on several factors. Here are eight points to help groom your practice for a future sale:

• Know the price you need to get and when you’ll need that money
. Review your retirement plan with professional advisors to know how far you really are from your economic finish line. If you need to net another $500,000 and place it into passive investments to retire comfortably, your selling situation is much different than if you already have the resources to walk away from active practice.
A review of your situation, considering the realistic market value of your practice, may indicate that you’ll be compelled to work for several more years before selling out. Another important consideration: Do you want to (or need to) work in the practice after the sale? Your answer will influence the value of the practice.
• Remember, the terms are often more important than the price
. As you calculate the price you believe the practice is worth, be willing to soften your demands in exchange for a clean deal (high down payment, short payout, or even all-cash). Whether the new owner of your practice is a PPMC or a junior doctor, you will likely be paid only if the buyer remains solvent and runs your practice well.
• Build a history of large and increasing profits
. The intangible value of your practice, in any brokerage event, is going to depend more on profitability than on any other single factor. You can’t do much to improve profits if you’re selling, without advance planning, in the next 3 months. But if you plan to sell in 3 to 5 years, experience tells me that even the most troubled practice in the most competitive environment can boost or at the very least stabilize profits.
• Lock in the stability of key people
. After the surgeon, the greatest value in your practice are other key members of your support staff. Because they may be nervous about their careers, and may disrupt the practice if they leave, do whatever is necessary to have your administrator and core technical and business staff anchored to the practice, through golden parachutes or rewards for tenure during transition. Don’t create any post-sale obligations to weak staff that could devalue the practice in the buyer’s eyes.
• Develop the practice’s key strengths and eliminate the practice’s key weaknesses on the operations side
. These strengths and weaknesses underlie your practice’s profit gaps, which will in turn directly influence the practice’s appraised value, especially to a PPMC.
• "Manualize" the practice
. Once you’ve examined the practice’s operational strengths and weaknesses, commit the day-to-day details to a written, comprehensive operations manual for the practice. Compare it to showing a file of maintenance receipts to the prospective buyer of your car — this documentation will demonstrate to buyers that your operation is well-run.
• In most cases, keep your sale plans as private as possible
. Once word is out that your practice is for sale, patients may drift away, not understanding that other doctors will succeed you. If you’re the glue holding your key staff together, they too may defect, leading to a lower value. However, this privacy rule has a corollary: As soon word gets out, communicate openly and often with all affected parties about your plans.
• Hire a broker or other professional to handle the brokerage process.
Probably the most powerful single factor in optimizing the value that you’ll receive for your practice and minimizing the hassles and emotional drain of the sale will be hiring a trusted advisor. This can be a traditional practice broker who would be paid a percentage of the sale price, or a fee-only attorney, accountant or consultant.