Preparing a business for sale is a complex process that requires careful planning and execution. Healthcare businesses in particular are highly regulated, thus carrying an additional preparatory burden.

Selling your business is a huge decision and, if at all possible, one that you should think about far in advance of actually undertaking. Selling a healthcare business requires a higher level of sensitivity and caution due to patient confidentiality and regulatory considerations. Engage legal and financial advisors experienced in healthcare business sales to navigate the specific regulatory and legal challenges.

At a minimum, a healthcare practice or business owner should prepare their business for a sale by reviewing the following:

Financials

Bring current your financial statements, including income statements, balance sheets, and cash flow statements. Reduce unnecessary expenses and increase revenue. Verify your financial records are in order and that you’re compliant with all tax obligations.

Operations

Identify and address operational inefficiencies— a well-organized and efficient business is more attractive to potential buyers. Document key processes, procedures, and workflows to make the transition smoother for the new owner and maintain business continuity.

Compliance

Conduct a thorough legal review to identify and address any pending or potential legal issues. Ensure compliance with industry regulations and licensing requirements— especially with relevant healthcare regulations (patient privacy, medical billing, fraud and abuse, etc.). Verify that all required licenses, registrations, and accreditations are up-to-date and in order. Expect potential buyers to conduct thorough due diligence on patient records, financials, and compliance measures, so be prepared to provide necessary documentation. Plan a strategy for informing patients about the change in ownership to maximize continuity of care. Confirm that any intellectual property rights are properly protected and documented.

Personnel

Identify key employees and consider retention strategies to ease their transition to the new ownership is smooth. (Understand that many times a key employee is not necessarily a healthcare provider.) Review your provider agreements with physicians, specialists, and other medical professionals. Ensure that these agreements are transferable or can be renegotiated if necessary.

Develop a plan for management succession if necessary. Buyers want comfort that the business can continue to operate successfully after the owner’s departure. Be prepared to stay after closing for a transition period where you’ll assist the new owner in getting acclimated to the business.