Top 4 tips for succession planning
It’s easy for many physicians in private practice to avoid an important professional priority: succession planning. While retirement or a reduced role in the practice might feel like a long way off, the reality is that positioning yourself and your practice for a smooth transition takes time and thoughtful planning. The consequences of failing to prepare appropriately can be financially damaging and can leave even a flourishing practice in a state of uncertainty and even lead to dissolution.
With that in mind, physicians in private practice would be wise to familiarize themselves with the legal and economic considerations involving succession planning, including basic tips and best practices for optimizing planning and preparation to ensure a smooth transition.
Putting succession planning off until the last minute is a prescription for trouble. When you consider that roughly 54% of physicians are over age 50 and 31% are over age 60, it becomes obvious that failure to prepare is preparing to fail.
The easiest answer as to when you should start succession planning for your practice is “always.” Almost all strategic and professional decision-making for the practice should be conducted with an eye toward long-term succession planning. Remember, there’s no such thing as “too early,” but there is certainly such thing as “too late.”
One of the most common issues physicians encounter when it comes to self-evaluating their practice is inflated financial expectations. Many have a dollar amount in mind that they think their practice is worth—and in many cases, the actual value is far less. For too many physicians, that “guesstimate” may have been the basis of retirement planning and other financial decisions, and discovering that it is inaccurate can be frightening (and can even delay retirement).