How to Sell Your Psychiatry Practice: Understanding the Process

The significance of mental health has only increased over the past few years. This is mainly because of the rising behavioral health concerns and the shortage of treatment services. Businesses like therapy or psychiatry practice are growing in demand. Therefore, someone working hard on their psychiatry practice business can benefit from this opportunity by getting a good price for their business in such a time. This blog explains how to sell your psychiatry practice.

Do you plan to sell your psychiatry practice? Get a good value for it by consulting behavioral health business selling experts at Strategique Partners.

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Understanding the Psychiatry Practice Market and Why to Sell Your Business

The psychiatry business is in demand in the behavioral health sector, as a substantial shortage of psychiatrists is projected until 2036. This makes it a very productive time for investors and private therapy practitioners to open their businesses or buy established ones. Consequently, when there is such demand for psychiatry businesses, such established businesses are now in the driving seat. By selling their business, they can make the move and get a good value for their hard work. 

Who Are the Potential Buyers of Psychiatry Practice?

Companies that buy mental health practices come from within the business as well as outside. With psychiatry practice, we see a range of potential buyers, which include the following:

1. Staff Within Your Psychiatry Practice
2. Venture Capitalists
3. Larger Mental Health Hospitals
4. Private Equity Firms
5. Cross-State Large Behavioral Health Firms

Some of these options, like your staff, might give you a lower price than the others. However, these buyers may ensure that they will carry along your legacy. You can get to buyers through Strategique Partners. 

The Selling Process of Psychiatry Practice

Selling your private psychiatry practice is a big decision. The process should be fortified by due diligence and clear thinking. You should do the following to sell your practice:

• Enhance the Value of Your Business to its Full Potential
• Identify Clear Selling Objectives
• Find a Reasonable Price
• Carry Out Due Diligence 

This constitutes the whole selling process of a psychiatry practice. We will explain all major steps in detail to develop a comprehensive seller’s guide for you in the following lines:

1. Psychiatry Practice Value-Based Appraisal

You kickstart the selling process of your psychiatry practice by doing impartial appraisals of your business. The appraisal or valuation part is very difficult as it also includes intangible considerations like reputation and branding. The other factors that guide the valuation include:

1. Yearly Profits
2. Quality of Staff
3. Tangible Assets like Equipment, Furniture
4. Services
5. Location
6. Liabilities
7. Licensing and Accreditation

An independent appraiser or a qualified accountant can help you find your business’s fair value. Otherwise, behavioral health business specialists like Strategique Partners’ financial valuation services can be utilized. 

2. Understanding Who Can Help You With the Selling Process

As mentioned above, selling a business fairly differs from running a business. Experience and expertise are needed to expedite the process. Therefore, it is important to understand who can help you with the selling process of your psychiatry practice. The following set of professionals can be taken on board:

1. A Certified Public Accountant for Valuation
2. A Behavioral Health Business Broker or Selling Specialist like Strategique Partners
3. Corporate Attorney and Tax Expert in Behavioral Health Mergers and Acquisitions

3. Finding a Good Time to Sell

Another facet of a good selling strategy is identifying the most suitable time. You will have to time your listing accurately to get a good value for your hard work. Here, we mention the ideal scenarios when you can put your business for sale:

• When mental health businesses and the overall market are on the rise
• When you are business is most productive
• When you want to take retirement

You can also consult a sell-side expert to know the market status. 

4. Listing Your Practice for Sale

Once you are sure that you want to sell your business and it is the right time, you should not delay putting it for sale. You can list it on relevant platforms or register with a qualified broker. Listing for sale also entails effective marketing. This is how you can get to the pool of buyers interested in a business like yours. Therefore, you can attract them to buy your business on favorable terms and at a good price. 

5. Setting the Right Price

Among the major considerations is setting a price that is plausible and attractive. No matter how much you believe your business is worth, it can only be sold at a reasonable price. Setting unreasonable prices can be avoided by the following strategies:

1. Taking into Account Recent Sales of Psychiatry Businesses
2. Gauging the Interest of the Buyer
3. Comparing the Asking Price with Impartial Financial Valuations
4. Considering the amount of Interested Buyers

These aspects can help you arrive at a very fair price that will attract buyers and be the cornerstone step of selling your mental health practice. 

6. Knowing Tax, Legal, and Regulatory Consequences of Selling the Psychiatry Practice

The selling process comes with its challenges in the form of tax, legal, and regulatory requirements. By selling, you may incur consequences of this nature. This is why we mentioned the need for financial experts, certified accountants, and qualified business attorneys. They can guide you to smoothly navigate regulatory, licensing, and financial requirements. 

How Strategique Partners Quicken the Sale of Your Psychiatry Practice?

Strategique Partners is an experienced campaigner in the field of behavioral health business consultancy. It has coordinated several behavioral health business-to-business transactions. Our experts envision helping and encouraging businesses by fostering a culture of due diligence to achieve business goals. 

We help you fasten the sale of your psychiatry practice through designated sell-side advisory. Furthermore, we also guide all businesses through our buy-side as well as general mergers and acquisitions. This has developed a well-rounded team, from which it can benefit. 

Do you require help with selling your psychiatry practice? Strategique Partners can be consulted in this regard here

Commonly Asked Questions About Selling a Psychiatry Practice

To comprehensively guide you, we have collected the most common questions arising in one’s mind when thinking about selling their psychiatry practice. 

How Should I Prepare My Practice Financially for Sale?

You can prepare your practice for sale by making minor financial adjustments like cutting extra costs and making the most productive income. Further, you can financially prepare by collecting all necessary financial data that makes it easy for the buyers to view the financial performance of your practice. 

How Do I Handle Confidentiality with Clients and Staff?

You can handle it either by taking them in confidence that there will be continuity of services in the same manner. By ensuring stability and staff retention, you can easily handle them. Another option is to delay the news of selling your business till the very end when it becomes inevitable to inform your staff and clients. 

How Do I Determine the Value of My Practice?

You can easily determine the value of your practice by hiring financial experts who can impartially evaluate your business and tell you the actual worth of your business. You can take a particular valuation approach or method.

Julie Kniceley

Behavioral Health Business Selling Expert

From Author

“I have been helping psychiatry practice business owners with buying and selling for many years. As a mergers and acquisitions expert, I have been part of many successful deals throughout my career. In selling psychiatry practice or any other mental health treatment program, you require expertise and experience in selling to guide you. An unguided and under-planned sale has almost always proven unbeneficial for sellers. One has to work a bit harder before the sale. From minor tweaks to carrying out due diligence on their business and sale-specific marketing, there are several steps to make the deal quick and productive. All you need is expert guidance which can either come from someone within your team or from experts like us.”

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