Earlier than the transaction itself requires. Executing a sale is the short part of the process. Improving earnings, reducing how much of the practice depends on you personally, cleaning up the books, and securing the lease all move slowly, which means the useful window opens years ahead of a closing rather than months.
The difference is between having options and having offers. Options let you compare paths. Offers let you react to whatever arrives.
What happens in the early phase?
The work here is operational rather than transactional.
Get an honest baseline valuation and learn what drives it. Then work the specific things buyers and lenders price: overhead, hygiene production, associate leverage, patient retention, and the share of production that walks out with you.
Clean up the records. Personal expenses running through the business, inconsistent categorization, and loose cash handling either cost value during diligence or cost the deal. Every add-back you intend to claim has to be documented and defensible, and cleaning that up early is far easier than explaining it to a buyer’s accountant later.
Then look hard at the lease. Short remaining term with no renewal options reduces value, because a buyer’s financing depends on occupancy. If you own the building, decide whether it sells with the practice, stays as an investment, or gets leased to the buyer, and get those terms right before anyone is negotiating.
What happens in the middle phase?
Reducing owner dependence becomes the priority. Buyers pay for cash flow that continues without you, so transferable production, systems that run without your daily involvement, and a team likely to stay all convert into value.
This is also when personal planning should begin, and it is the part most often deferred.
Decide what you actually want. Full exit, phased transition, sell and continue working, sell to an associate, sell to a group. Each path implies different preparation. Selling to an associate requires having an associate who is ready and interested, which is a hiring decision made much earlier.
Then run your own arithmetic. Not what the practice is worth, but what after-tax proceeds plus your other assets need to support, and for how long. Those two figures meeting is the actual goal of transition planning, and knowing the gap early is the only thing that lets you act on it.
Ask your CPA about deal structure while it is still hypothetical. How a transaction is allocated across asset categories carries tax consequences, and buyer and seller preferences often conflict there.
What happens in the final stretch?
Now it is a transaction. Assemble the team: transactions attorney, CPA, and a broker or advisor if you use one. Understand how each is compensated and whether anyone is representing both sides.
Prepare the diligence package before anyone asks for it: financial statements and tax returns covering several years, production and collection reports, aged receivables, the lease, equipment lists and service records, a staff census with compensation and tenure, insurance participation and fee schedules, and any open legal or compliance matters.
Then decide how and when you tell your team. There is no perfect answer. The two failure modes are telling everyone early and losing staff during a long uncertain wait, or telling everyone at closing and losing them to the surprise. Have a plan rather than improvising on the day.
What do people regret?
Three things come up. Starting too late to fix anything. Taking the first offer without knowing what else existed. And planning the transaction thoroughly while planning nothing for the years after it.
The last is the quietest, and it surfaces well after closing, when the money is invested and the calendar is empty. What comes next deserves the same preparation as the sale.
Transitions involve legal and tax decisions specific to your practice and your state. Use your own advisors on those.
FAQ
How long does a sale take once it starts?
Longer than sellers expect, and the timeline is driven by financing, diligence, lease assignment, and how clean the records are. Delays come more often from documentation gaps and landlord negotiations than from arguments about price, which is the argument for preparing early.
Should I tell my staff I am planning to sell?
There is no single right answer, and timing depends on your team, the buyer, and how long the process will run. What matters is disclosing according to a plan rather than by accident. Staff continuity affects value, so this decision has financial consequences alongside human ones.
Can I still improve value late?
Yes, meaningfully. Overhead, schedule utilization, and lease security can all move inside a fairly short window, and buyers look at trailing performance across more than one year. What resists late fixing is owner dependence, which requires building transferable production over a longer runway.