Building a business is a labor of love. Entrepreneurs spend long hours researching their market and making sure their operations are in compliance with applicable rules and regulations. Although all business owners work hard to get their enterprises up and running, those who start a medical practice are balancing more than just their business’ success, they are also balancing the interest of the patient.
A medical practice is more than just a successful business, it is a facility that provides care to patients. This makes it even more important for medical practice owners to have a succession plan. Without a succession plan not only will the owners put themselves at risk for business failure, but they also risk their patient’s ability to receive medical care.
When is the right time to put together a succession plan? Ideally, every practice will have a succession plan at the time of inception. This plan serves as a safety net. However, three specific events that should trigger a plan include:
- Change in familial status. Whether just getting married, divorced or starting a family, a change in the business owner’s home life should trigger a discussion about the practice’s succession plan. This also extends to include any illness or event that would impact the practice owner’s ability to come to work.
- Change in drive. Professionals in any field can find themselves facing burn out. Practice owners that feel overwhelmed can benefit from a succession plan. The plan could include a strategy to bring in a partner or private equity group to help reduce workload and address burn out.
- Change in the market. Whether the business has plateaued or started to decline, it may be wise to reevaluate your business strategy. Setting up a succession plan can trigger discussion of this strategy and give you an opportunity to explore different options that may help your business continue to thrive.