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Practice tip of the week: Setting a succession plan
Your weekly dose of wisdom from the Physicians Practice experts.
With all the useful information available on Physicians Practice, it is easy to become overwhelmed.
With this in mind, the tip of the week is a chance to reflect on some of the wisdom found all across the site. In this June 2020 story on setting a succession plan for your practice, Nick Hernandez gives these tips:
1. Start early. Ideally, it is best to begin this process as far in advance as possible. This will give you the opportunity to explore all of your options and prevent hasty decision making that can undermine the stability and value of the business.
2. Identify your successors. This might be the most challenging aspect of this process for physician practices. As I have written about before, there are many considerations in the selection and grooming of a physician partner. You may have a physician in the practice that does not have the interest or skills to take over the practice. Therefore, to ensure that you place your practice in the best possible hands, I recommend making a rigorous and honest assessment of the relative strengths and weaknesses of all potential heirs. Consultants with experience in physician succession planning can be well worth your investment here. Engaging such an outside expert to conduct this analysis to help make objective and rational decisions regarding the best future interests of the practice and to de-emphasize emotional attachments (as well as any potential family politics) will ultimately be effective for the succession strategy.
It is also important to remember that management and ownership are not necessarily one and the same. Thus, it may be in the best interests of the practice to appoint an employee to take the business to the next level. Even if physician owners are not holding the business operations reins day-to-day, they will still retain an ownership interest and exercise the requisite level of control via various governance mechanisms (partnership meetings, executive control, voting shares, etc.).
Click here to read the rest of the article and be sure to check back next week for another Tip of the Week!
