What to expect when selling a practice. Part 1:Time

How long might it take?

The time table for an expected practice sale varies on a number of factors. There is no hard and fast rule as to how long it may take. The process begins at the time that an owner agrees to list the practice with a buyer and ends with the final closing and document signing. Given all this the general wisdom is that a practice could be actively on the market for six months to a year. Many factors with undoubtedly prolong the process. Chief among these is the location of your practice. Practices in smaller towns take longer to sell. The number of practices in the area is limited. This means that the practice will have to be an ideal fit in terms of facility as well as a fit in the locale. Larger cities give a buyer more options among potential practices within the same general area. To a lesser degree, practices that are in older facilities or have older equipment will gather less attention from potential buyers. The higher number of potential buyers that view a practice, the quicker it will sell. Updating to newer systems, especially digital systems a few years before selling with increase the number of potential buyers willing to consider your practice.

How long it will take necessarily?

First, assuming that there is a buyer who is willing to put in an offer and a seller willing to accept the remaining steps are financing and contract agreement. Financing rarely happens with out a loan from a bank. If bank financing is involved in the practice sale there is a due diligence period that the bank undergoes before they can underwrite the loan. In general, this may take a little as two weeks. However, this depends on the bank receiving all necessary financial documents from both parties. Given this, the expectation should be to have the practice funded and closed a month or two after an offer has been made on the practice. Finally, the Asset Purchase agreement is negotiated and finalized.  Negotiations around the terms of the final contract will take less time than bank underwriting. This is accelerated if parties prioritize diligent and prompt communication. The predominant factor that delays completion the process is the parties themselves.