The time has come to sell and hand over the reigns to a new owner. Truly an exciting time but also one fraught with apprehension, nervousness and perhaps a bit of regret.
When an owner makes the decision to sell and continues to work for any period post close, one knows life must be different. But can the vendor accept the changes?
The Emotional Challenge of Selling
Regardless of the reason for the sale, every vendor believes he or she has poured their heart and soul into establishing, building, and maintaining the practice. After all, by the time the clinic sells, years of developing relationships, assembling a good team, creating a brand, and achieving success, are the reasons someone is willing to buy the practice.
But this is where the challenge starts. Handing control over to a new owner after holding this position for many years, often 25 plus years, is no easy feat.
The vendor must be prepared to accept change. New owners will have a new management style, will want to make changes, and will most definitely make their own share of mistakes. Vendors must be prepared to stand by and watch without interfering.
Good Intentions Notwithstanding… Reality Sets In
In the simplest terms, a practice transition is an event or transaction that results in a change in the effective ownership of the clinic.
Transition is all about the existing owner taking a back seat in the clinic while allowing a new owner to shine. And expectation, transition means the vendor will focus on putting the new owner in the best position possible by supporting the team that was once the vendor’s as well as the plans of the new owner.
Transitions are not easy, and they often come with a myriad of finite details. Most vendors hope for synergies between themselves and the buyer. They initially welcome the new energy to the practice. Everyone starts off with the greatest of intentions.
The vendor says they will support the new owner in any possible way and reassures the buyer that the office is now theirs. They are welcome to do as they see fit. The buyer has tremendous respect for the previous owner.
They want to ensure the vendor is happy and assures them their presence is welcome for as long as they wish to be there. But then reality sets in very quickly. Previous owners feel that the new owner is making many mistakes and of course, the new owner is not happy that the prior owner is “stuck” in his/her ways. And so, the dance begins!
Prepare for Change
The best piece of advice we give to vendors is to expect and prepare for change. When they sign the listing agreement, we warn them that the time post close is not going to be easy. Eventually, it can be quite harmonious but like any relationship, finding the synergy and sweet spot of co-existence takes time.
If both parties are truly patient and willing to work at it (just like a marriage), then a mutually beneficial relationship can certainly be the result. A vendor needs to remember that a purchaser now has a significant loan that requires repayment. The new owner may make choices or decisions that are not what the previous owner would make, but that is to be expected. A purchaser also needs to remember that change is never easy.
If you want a vendor to stay, the most important thing is open communication. Deliver messages directly to the vendor, not through staff.
The most successful relationships in life are based on both parties taking the time to share their thoughts, and concerns while also doing their utmost to truly listen to the other person. Strong communication does not take place by accident; planning, idea sharing, and discussions must be scheduled and practiced.
Bottom line
A successful transition does not simply happen. It takes work, patience, and mutual understanding. If both the vendor and the purchaser are willing to have open dialogue and accept that change is inevitable then the success rate increases.
JACKIE JOACHIM
Jackie has 30 years of experience in the industry as a former banker and now the Chief Operating Officer of ROI Corporation. Please contact her at Jackie.joachim@roicorp.com or 1-844-764-2020.
