Can You Really Sell A Private Practice? Maybe...

You can spend decades building a thriving practice, with a full schedule and a fat juicy client base. But you can't massage forever and one day you may decide it's time to sell your practice and move on to another career or even into retirement. Why not? It's a very valuable practice.

To you.

As many MTs have discovered, it's incredibly difficult to sell a private practice. Partially that's because other MTs may not have the money to pay what you think your practice is worth. More importantly, there's a lot of disagreement in our profession about (1) the value of a client list and (2) whether it's even ethical to "sell" your clients.

I recently read an explanation of how to sell a private practice. It puts all these concerns in perspective.

The explanation is in "Twelve Months to Your Ideal Practice" by Lynn Grodzki. I'm working through this workbook over the course of a year with a study group being run by local therapist Connie Ridgeway. Here's a summary of Lynn's explanation.

In order for your therapy business to be attractive to buyers, it needs to have multiple transferable assets.

Too often, a therapy business has only one asset, and it's a nontransferable one -- the therapist's relationship to his or her clients...Can your clients be transferred to a buyer? That depends on whether your clients perceive that their main attachment is to you, the practice, or both.

In short, if your clients feel their primary connection is to you (and it so often is) you're going to have a very difficult time selling your practice. There's only one you and your clients know that.

But how does a one-person practice create a client experience that can be transferred to another therapist to our client's satisfaction?

Create tangible value that is transferable. Turn your ideas into programs, document those programs, and establish your methods of therapy into writing and on video. Create as much product as possible. Write, research, and publish to validate your methods. Begin to train others in your methods, so that you have a pool of potential buyers when you are ready to retire.

I think that last idea -- train others in your methods -- is probably the way for most of us. I don't know many MTs who have created truly unique methods. What we do have is the whole combination of:

• the way we approach massage,
• the things we like to focus on,
• how we think about our work,
• the combination of all the methods we've actually mastered, and
• our temperament.

If you could find MTs who are or would like to be like you and formed a partnership, I could see working out a mentor-to-ownership (sorta like rent-to-own) arrangement.

Lynn gets more specific about how to make this sort of thing work:

Here's a list of six tangible assets that can add to the selling price of your practice and how to accomplish each one:

1.  Brand name. If you can name your type of services in a recognizable way as separate from your identity, you have a salable asset...

2.  Direct-mail list. Build a large direct-mail list for your practice of clients and referral sources...

3.  Promotional materials. Develop brand-name recognition via your promotional materials now, with brochures that highlight the method or the program name more than your name...

4.  Measures. Have a system to track your effectiveness over time...

5.  Ancillary products. If your state sanctions selling products to clients under your licensure (some do and some don't; ask your licensing board), you can develop a product line of material to sell--pamphlets, audio- or videotapes, training tapes, books (your own or others), nutritional supplements...

6.  Practice management. If you have created a thriving practice with easy-to-understand administrative systems in place, you have an additional asset...

Lynn goes on to spell out exactly how to do this (it reminds me a bit of what I've heard about the E-Myth). She also says...

What price can you expect to get for your business? While a manufacturing company might be sold for five times its annual earnings because it has a product, plant, staff, and systems in place, a therapy business without these elements in place might sell at one to two times its annual earnings. You can add to this ratio by having as many tangible assets [see above] as possible.

So, yes, you can sell a private practice but if you really want to make a profit, you need to invest a couple of years to create the kind of practice that has something to offer besides a list of names who may or may not want to work with your buyer.


AND A REMINDER....The Healing Core is offering One Year To A Successful Massage Therapy Practice (the secret? marketing) in August here in Washington DC.  The "early bird" discount expires in 10 days (June 30).

You can attend on Saturday, August 11 or Sunday, August 12. Register now to save money on learning how to attract more clients and make more money!

8 CEs for you massage therapist types.