Your practice may make perfect sense to you, but in a transaction, it needs to make sense to someone else. So take notes during these third-party interactions. How easy was it for you to assemble the information they asked for? Did you find yourself having to find creative ways to present the information the way they wanted, or was it straightforward? Did the third party need to ask a lot of additional questions to get the answer they needed? At the end of the evaluation, you may receive your updated license or certificate from them, but you also received your marching orders for improvements you can make to ensure any future transactions go smoothly.
When all is said and done with the third-party evaluation, sit down with stakeholders in your practice to discuss how to make the next evaluation better. If certain files were disorganized, create a system that allows you to find the necessary file quickly. If certain information was missing entirely, make a plan to remedy that, and memorialize any changes you make to your processes.
Running a Practice Like It’s Always Up for Sale
Maybe your plan is to sell your practice in a couple of years or not until you retire years from now. You may think your practice is doing just fine. Everyone gets their work done, the money comes in and the bills get paid. So why worry about making disruptive changes for a hypothetical sale in the future?
First, due diligence requests often reach several years back. In the healthcare industry, it is not uncommon for information requests to encompass the previous six years because that is the look-back period for many federal healthcare laws. Depending on the structure of the transaction, the buyer may be inheriting issues your practice has had in the past, so they’ll want to know everything they’re taking on.
The sooner you start the better. For example, if you recently made a change to fix an issue, a diligence request asking for six years of information will still reveal that the fix was not in place for many years.
Second, the actual process of due diligence is expensive. Your lawyers must review your diligence materials for any issues they may need to address with opposing counsel. You and your employees also have to spend valuable time compiling materials for diligence requests. If your records are orderly and accessible, this can significantly decrease the hours spent on these requests. Additionally, if records are kept and presented to buyers in an organized manner, that will result in fewer issues for attorneys to sort through, and fewer additional requests from the buyers.
