Before You Talk Price: 12 Questions for Healthcare Practice Sellers and Future Buyers

When a practice owner meets a potential buyer, the conversation often turns quickly to price.

That is understandable. The seller has spent years building something meaningful. The buyer wants to know whether ownership is possible. Yet the number alone rarely tells either person whether the transition will work.

I have found that a better place to begin is with an honest conversation about expectations, responsibilities and risk. Think of it as a succession interview. These 12 questions can help both sides understand the practice and each other before discussing price.

1. What would a successful transition look like for each of us?

A seller may want a clean break, a gradual reduction in clinical work or time to mentor a successor. A buyer may want autonomy, growth or a better balance between work and life. Write down what success would look like one year after closing. The similarities and differences will tell you a great deal.

2. How much of the practice depends on the seller?

Consider the seller's production, patient relationships, referral sources and daily decisions. The buyer needs to know whether those strengths can transfer. The seller may need time to introduce the buyer and delegate responsibilities before stepping away.

3. Why will patients stay?

A long patient list does not guarantee a loyal patient base. Look at recent activity, return visits and the reasons patients choose the practice. Then agree on how the seller will introduce the buyer and how the team will communicate the change.

4. Who keeps the practice running?

Staff often understand the details that never appear in a financial statement. Identify the people who hold essential knowledge and discuss whether they are likely to remain. Protect confidentiality, document important routines and agree before the buyer speaks with employees.

5. Do the numbers tell a clear story?

Revenue is not the same as cash available to an owner. Financial statements, production reports and collection records should support one another. Unusual income or expenses need a clear explanation. If the numbers are difficult to follow, pause before using them to establish value.

6. How does the practice get paid?

Billing, payer participation, denials, accounts receivable and credentialing can affect income after a sale. Walk through the life of a claim from appointment to payment. The buyer should understand what must change before services can be billed and collected under new ownership.

7. What obligations come with the practice?

Review the lease, equipment loans, software agreements, supplier contracts and other commitments. An attractive practice can become a difficult purchase if an important agreement cannot transfer on reasonable terms. Qualified legal and financial advisors should review these documents.

8. What exactly does the price include?

Do not assume that both sides have the same definition of the practice. List the equipment, inventory, records, website, telephone numbers and goodwill being transferred. Also address cash, accounts receivable, liabilities and personal items that are not included.

9. How will the purchase work in real life?

Consider the cash at closing, financing, working capital and any payments tied to future performance. The buyer needs a realistic view of monthly obligations and personal income. The seller needs to understand when payment will arrive and what could delay it. A conservative forecast is worth the effort.

10. What will the seller do after closing?

Good intentions are not enough. Define how long the seller will stay, how many hours they will work and whether they will provide clinical coverage, patient introductions or management training. Clear expectations now can prevent frustration later.

11. What should change during the first 90 days?

A new owner may see many opportunities for improvement. Changing everything at once can unsettle patients and staff. Begin by listening and learning. Choose a small number of priorities, agree on how progress will be measured and leave room for the team to adjust.

12. What would cause either of us to walk away?

Discuss deal breakers early. Financing, the lease, staff concerns, unclear financial records or different visions for the practice may be reasons to stop. Walking away from the wrong opportunity is not a failure. It can prevent a much more painful decision later.

Final Thoughts

A practice transition is more than a financial exchange. It transfers patient trust, staff relationships and years of hard work from one person to another.

These questions will not produce a perfect agreement. They will do something more useful. They will reveal what needs attention while there is still time to address it.

Before asking, “What is the price?” ask, “Do we understand each other well enough to make this work?”

Considering a sale, purchase or succession plan for your healthcare practice? Schedule a free 30 minute discovery call with EyeExec Advisory Group.

Bryan M. Rogoff, OD, MBA, MSc, CPHM, FAAO
Founder & Principal, EyeExec Advisory Group