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O NE OF THE toughest business decisions to make is whether to buy or sell a business. It definitely holds true for the medical industry. And once a physician has made the decision to buy or sell, it's not as simple as signing on the dotted line and handing the practice over to another doc- tor. Buying or selling a medical practice is a complex process with serious legal, financial and professional considerations, and a lot of work must be done to ensure a positive transition. If you plan to buy or sell a practice, you can take steps to prepare for the process and stay on the right track for a successful agreement. Engage Your Advisers Early Talk with your banker, accountant and attorney, and let them know you are interested in buying or selling a practice. As your trusted advisers, they have your best interests at heart and will be your advocates throughout this process. If they don't have significant knowledge of the healthcare industry, ask them to recommend another professional to you. Medical practices are very different from other businesses and it's important that your advisers have experience with these sales and acquisitions so they can provide you with the best guidance possible. Do Your Homework Buyers and sellers both have respon- sibilities in preparing for the purchase agreement. Sellers must produce all their financial documentation so the CPA can facilitate a thorough practice valuation. The valuation will show you the total value of your practice, including tangible assets, nontangible assets and accounts receivable. Before you can sell your practice, you need to know how much it is worth. Buyers need to research the practice thoroughly to make sure it is in good financial health, has positive relation- ships with insurance companies and, most importantly, is a good fit for them. They also need to make sure they fully understand what assets they are buying and carefully think through how they are going to finance their purchase. Be Patient A valuation of a practice can take a few months, but this is an important step in making sure that the agreement is fair for both parties. And once it is complete, it still may take some time to negotiate the price and specific terms. By Jeanne Bennett Thinking About Buying or Selling a Medical Practice +++++++++++++++ + +++ + +++ +++++++++++++++ BANKING 1 2 | San Antonio MD NEWS ■ M D N E W S . CO M