Develop exit strategy for your massage practice
Through my day-to-day interactions with massage therapists across Canada, I often meet practitioners who are winding down or in the process of closing their practice.
By Jessica Foster
Through my day-to-day interactions with massage therapists across Canada, I often meet practitioners who are winding down or in the process of closing their practice. The reasons behind the closures are common enough and range from retirement to career change, relocation to disability – but you may find yourself as surprised as I was to hear how these health professionals are closing their doors.
Many practitioners are simply closing their practices and referring their loyal clientele to other health professionals – free of charge. You may wonder why anyone would simply give away his or her client base after working so hard to establish it. Surprisingly, many practitioners believe their practice is not sellable. This certainly does not need to be the case.
The practice management systems you use inside your practice could have a serious effect on your ability to sell your practice and, ultimately, the size of cheque you receive for it.
Massage therapists – mostly baby boomers – are retiring in increasing numbers every year. At the same time, new massage businesses are entering the market. One group wants out of the business and the other group wants in. This environment creates a multitude of opportunities to sell your practice if you have a business that has transferable value.
Many self-employed therapists may not realize in their early years that they are doing more than providing essential health-care services to their client base. They are also managing and building a profitable business. Hard assets aside, the transferable revenue opportunities your business offers, via your established active clientele, is of primary importance to any prospective purchasers. Likewise, the management system you put in place to keep track of your clients and business will ultimately affect the cash value you receive upon selling your business.
A friend of mine is an accredited business valuator. She says historically, small and medium size businesses employed very short-term strategies when it comes to electronic management systems, and this negatively impacts the practice’s value for resale.
Her eyes lit up when I asked her to explain the value a potential purchaser would place on an automated practice management system when considering buying a massage therapy practice. She said it is essential that a purchaser be able to efficiently access the client base and the individual client records with treatment and client communication history. She believes paper driven, “filing cabinet/shoebox businesses” offer the least opportunity to successfully transition clients to a new business owner.
She places a high value on the new owner’s ability to electronically communicate with the purchased client base. It is key to client retention. She says it is imperative the practice management system includes permission-based and efficient (automated) communication tools that have historically provided two-way communication between the practitioner and clients.
An example of communication tools for massage therapy practices is a professional website with automated online scheduling system – clients who are used to booking appointments online with their practitioner will be much more likely to do so with the new owner. The website must be transferable to the new owner. Another example is efficient email utilities, including automated appointment reminders and mass email – clients who have permitted electronic communications with the previous practitioner would likely be willing to continue with the new one.
The branding value that a professional website offers is vital in retaining clients and acquiring new ones in a geographical area. Here are a few “enabling technologies” purchasers or new owners will want to see operational in your practice.
- electronic database with client health-care information
- electronic, updated client contact information, including email addresses complete with client permission to use
- client billing history
- touch-of-a-button financial records, capable of being consolidated by client, treatment type, date and revenue periods
- electronic record keeping that is 100 per cent compliant with provincial and federal privacy legislations. No new owner wants to be sued by clients over failure to comply with the legislation.
It is recommended that if circumstances allow, the selling practitioner should be active in introducing the new owner to the clients. The selling practitioner should seek the client’s recorded permission to transfer client health-care records to the new provider.
The best time to implement your exit strategy is from day one. The next best time is as soon as possible. Fortunately, the aforementioned practice management technologies are readily available to practitioners, are easy to use and highly cost-effective.
Until next time, be well.
Jessica Foster writes on behalf of mindZplay Solutions Inc., a provider of massage therapy websites and practice management solutions. To learn more about mindZplay solutions for massage therapists visit www.massagemanedger.com or call toll free 888-373-6996.