Owning a medical practice or medical services business can sometimes feel like being the head of a family. Your responsibility, ultimately, is to enable your employees to do their jobs well without you. When retirement nears or if you decide you simply want to move on to another venture, you need to concern yourself with what happens to employees when you sell your business.
Have a Succession Plan
Long before you plan to retire or exit your practice or medical services business, you should create a succession plan. Patients, clients, and customers have a special relationship with their healthcare providers and need to know they can rely on your practice or your business for consistency of care or service. Hire carefully with this in mind. If you have taken on partners or associates, train them well, and expose to your way of doing things so they can maintain continuity when you depart.
Maintain Confidentiality
Once you have made the decision to sell your practice or healthcare business, it’s critically important to keep that decision private, which includes not telling your employees. Don’t tell employees until the sale is complete. Buyers want stability. They want to know that if they buy your business, the transition can happen smoothly without costly interruptions. This means retaining key staff who have the experience and corporate memory to carry on seamlessly. However, if rumors begin to circulate that you are planning to sell, you could lose key personnel and, as a result, dampen or destroy prospective buyers’ enthusiasm.
Negotiate
While it isn’t likely you’ll succeed in selling your business if you demand that all employees stay on board, a buyer will likely want to retain your experienced staff. In fact, they may insist on it. It is only at this point that you would bring in key employees, one at a time, and describe the terms they’ll be offered. You must ask them to commit to confidentiality and adhere to the terms of any employment contract they’ll be offered. Be sure to seek legal counsel about all aspects of selling your business, especially when conversing with or making an offer to employees. You mustn’t promise more than will be delivered, and you should be able to assure yourself that terms will be legal and enforceable.
Negotiations can include benefits, bonuses, and salaries for your employees, and may require that a certain minimum staffing level be retained for at least some time after you depart. Evaluate prospective buyers not only by the terms of their offer but by your assessment of their compatibility with your staff and clients. Review their terms to see if they intend to operate your business in the manner you did and if your instinct tells you they are trustworthy and will treat your staff fairly. You can also negotiate the terms of a transition, including a time period where you will stay on to ease the transfer of ownership and reassure staff that things will continue as they did before. An experienced business broker who has successfully sold businesses like yours in the past can help locate buyers and guide negotiations. Make sure that whatever deal you make gives you confidence about what happens to your employees when you sell your business.
