Joe Sanok 00:00:00  I'm so excited to introduce you to the best website designers out there. We have a brand new partnership with session sites. It is where good therapy meets brilliant design, and they get your website switched over or built in less than two weeks. They fine tune your messaging, use science backed user experience methodology, and work exclusively with mental health professionals. In fact, new clients right now are going to get three free therapy marketing strategy calls with their creative director of session sites. If you book today, you're not going to want to miss this. Head on over to session sites.com/joe again that session sites.com/joe get the website of your dreams today session sites.com/joe. This is the practice of the practice podcast with Joe Xanax session number 1144. I'm Joe, sound like you're hosting. Welcome to the practice of the practice podcast, where we help you build a thriving practice you absolutely love. And maybe you'll sell. today we have Ashe doing her seven part series. So excited about this series around building a practice that maybe you can sell someday.

Joe Sanok 00:01:23  Things that you should know about that if you want to work with ash, head on over to practice of the practice.com/apply. That's a spot where you can apply to work with ash to be able to get that help that consulting as you enter into next year. So we're talking finalizing the sale and the transitioning of ownership today. So here we go.

Ashley Mielke 00:01:43  Welcome back to another episode of The Practice of the Practice podcast. I'm your host, Ashley Mielke. This is episode four of our seven part series in selling a group Practice. So the last episode, hopefully you took some notes kind of preparing your negotiations. Looking at all of those considerations for due diligence process. And now today we're going to be talking about finalizing the sale, transitioning ownership and some post-sale considerations. So I'm really excited to dive into this. This will probably be a bit of a lighter episode, because we did talk about a lot of sort of the meat and potatoes of selling in the last one. So let's dive right in. So once your letter of intent has been agreed upon.

Ashley Mielke 00:02:39  Your due diligence phase has been completed. All of the major questions have been answered. There's possibly been some renegotiations with the sale, depending on what was in that discovery phase of the due diligence for the buyer. This is where now. Okay. You've agreed with everything. You're both ready to move forward. You're feeling great about things. This is where they will draft the sale agreement. The buyer is going to draft a sale agreement with their lawyer, which will have, again all of the updated key components of the sale, your purchase price that you've agreed upon, your payment terms. Right. Contingencies, for example, they're going to say you have to have all your debts paid or we need to ensure that your lease can be reassigned to us. there's going to be these contingencies that need to be checked off as a part of that sale. It might include something like, we need to change the employee agreements. we need to give notice to the staff that there's a sale happening. There's going to be particular contingencies based on your unique situation.

Ashley Mielke 00:03:58  As a part of that sale. And that will all be listed in your sale agreement. The other things that will also be included in that would be the role of escrow services. So when you do get paid, how what is that going to look like? Typically, the money will go to your lawyer's trust account. At least that's how it happens here. And then your lawyer will draft you a check from their trust account. And so it's these little details that you'll kind of sort out. and then there's also often a list of things that need to be taken care of after the sale closes. So just transfer of ownership of everything having to do with your business, which is a lot of fun because you'll be very busy. So also in terms of legal and regulatory compliance. So, just ensuring that the sale meets all legal and ethical requirements. So because we work in an industry that is driven by our ethics and, you know, a high standard of professionalism, we need to consider things like how do we inform our clients about the sale, what happens with the file management, what happens with the EHR, like all of those processes that you were once responsible for, the new buyer will have to take over.

Ashley Mielke 00:05:19  And then in terms of closing day, there will be some final documentation for you to sign, handing over of keys. And like I said, transferring ownership of all of those, like operational and business assets and, picking up your check. So that's really what that process is going to look like. So when you have your sale agreement, make sure you read it with a fine tooth comb. You go through it with your lawyer, you have your accountant review it. You sit down. If you have a significant other to just review all of the terms. And if you don't know, ask questions because it's going to be in legal jargon, which, unless you're a lawyer or your partner's a lawyer of a family member is a lawyer. A lot of this stuff doesn't make any sense. So I had a lot of questions for my lawyer because it's like reading, you know, a foreign language for me. And then, you know, make sure you're comfortable with all the terms before, before you sign it.

Ashley Mielke 00:06:19  Okay. So some things to think about. So. Okay. The sale agreement is now been signed. This is happening like it's happening. You have agreed to sell. The buyer has agreed to buy. And now it's time to execute on that checklist. With all those contingencies, a big step is going to be when do we tell the team. So typically you won't tell. You won't announce to your team or your clients until the sale agreement is assigned because now it's a legally binding document. So you're going to want to have conversations with the buyer in advance or on what what their hopes are or what your hopes are in terms of having those conversations. And for me, it was really important that I met with the leadership team first. I had individual conversations to, you know, ensure that they felt supported and cared for and that they had a really good understanding around my reasons for selling and my hopes for them moving forward with the company as well. That felt really good for me. That was a really important part of the transition and to be very honest.

Ashley Mielke 00:07:32  The hardest part in selling for me and even considering selling, even though I really felt a call in my heart to do so, was thinking about my team, thinking about the impact it would have on them emotionally, how they were going to feel about me exiting and someone new coming in. and also just what decisions they were going to make for themselves. Were they going to stay? Were they going to go? What was important to them in terms of making those decisions for themselves? So I felt very anxious. I felt very nervous. and a part of me felt like this guilt. And I had to work through that. I had to work with my therapist on that and having conversations. My spiritual director and my family and I just, I had to remind myself that this this is their journey. These are incredible human beings. They are capable, they are competent, they are resourceful, and they're going to do what's best for them. And it's not my journey. It's not mine to control or to figure out.

Ashley Mielke 00:08:44  It's their life at the end of the day. So I really just went into these conversations, reminding myself of that and really trusting that they were going to be okay no matter what, and they were going to make decisions that were best for them. And I just honestly wanted nothing but the best for them. So when I felt some comfort and clarity around that, I was able to sign that sale agreement and move forward and have these conversations and really try to let go of expectations of what things were going to look like for them in their decisions. And I just sincerely wanted what's best. and so it was very, very hard walking away, because I knew just things were going to change. Right? The relationships were going to change because how could it not? There was a lot that was going to be that was going to be different and look different moving forward.

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Joe Sanok 00:09:53  And honestly, one of the reasons I didn't take insurance was it was so difficult to navigate. So many of my consulting clients deal with these problems as well, and almost supports clinicians in building rewarding private practices with simplified insurance credentialing in under 45 days, enhanced reimbursement rates, and guaranteed two week payback, plus a free profile in their searchable Fillable Directory. Making it easy for clients who are the right fit for your practice to find you. Learn more about how alma could support your private practice at. Hello, alma. Com forward slash Jo that's hello alma.com/jo to learn more.

Ashley Mielke 00:10:38  So I had to really think about, you know, how I was going to have these conversations, how I was going to announce it to the team, whether that's, you know, some people send a video out to the team. Some people sent an email. So these are things you need to think about what feels best. But my advice is to just be honest and transparent and kind and generous and open and, just remember that these are people first, so they might be really happy for you and, might see this as a great opportunity for you, but it's also going to be a big change for them.

Ashley Mielke 00:11:14  And as human beings, we know that we don't really do that well with change, especially if it's change that we didn't choose. So if there's a lot of fear, trepidation, maybe even some anger, someone might be upset. I mean, we really don't know how people are going to respond. So we have to go in with that, lens of generosity and kindness that whatever their responses are, they are entitled to them. Absolutely. So that's a big thing. figuring out, how are you going to announce that, how you're going to let your clients know. Do you tell all the clients? Do you just tell your active clients? So these are conversations I had with my lawyer and with my college as well, just around how do we go about doing this and the best way. So everybody is well informed about the changes that are coming. How soon do we announce? Is it you know, the day of this, the sale closes? Is it 60 days in advance? It's a 90 days.

Ashley Mielke 00:12:10  So all of these things will be discussed. And, really looking at again how long you're going to stay on after the sale, what are going to be those transition activities? So what we did is we created a transition plan spreadsheet of all of the various things that we needed to accomplish to ensure everything was handed over. And I'm talking like, oh my gosh, I've been in business for 11 years, and you don't realize how many different accounts you have, how many passwords you have. all the access that the new buyer is going to need and an understanding of all of your day to day operations? So it was hours of meetings and conversations and emails and sending things. So that was a whole process in and of itself, was just figuring out what are those transition activities that need to happen, how do we inform our insurance companies and third party billers and just ensuring our very best that no balls were dropped and fortunately we were very efficient. I'm very proud of how, myself and the new team really handled these, transition activities because we were quite efficient that a majority of them were completed prior to the actual closing date of the business.

Ashley Mielke 00:13:37  So some things to think about. So you've closed the deal. You are. You've let the team know you are completing those transition activities, getting ready for that sale. The closing date, the closing date comes. You go pick up your check from your lawyer's office. You've got your money. You're going to be probably working for the team for a transition period. It might be three months. It might be 6 or 12 months. So during this phase, you're going to need to be available to support them as needed. So that will look like maybe a couple of phone calls, some emails coming through, helping them with if it's your Google Drive or your employee handbook, getting access to things, transitioning ownership of your EHR, like all those little things that you'll be doing, it'll probably be the bulk of that will probably happen in the first couple of weeks, and then it'll sort of trickle out from there. And, so you can sort of anticipate that. And then the next thing is for you to really think about our how are you going to manage the finances coming in? you know, have you sat down with your accountant around? Okay, now I have this lump sum of cash.

Ashley Mielke 00:14:47  Maybe you have more cash coming. What do I do with this? How do I best invest it? are you going to live off it? What? What's your next plan? Are you going to start a new business? Are you going to work for the company you just sold? Are you going to take some time off? Really get clarity around your vision for that next 12 months? After selling and really listening to what feels best for you? What is going to be the best way for you to transition from this sale, and kind of what ventures are you going to explore next? Another post-sale consideration is your relationship with the therapists that worked for you. Are these relationships that you desire to continue? Are you going to reconnect with them? Maybe have a post-sale dinner or lunch? Like what? What is that going to look like? Because things are going to be different and look a little bit different. But those are just a couple of things, I think, for you to start to consider at that point.

Ashley Mielke 00:15:53  And in a later episode in this series, I'm actually going to do some, strategic planning with you. I have one episode where we just go through visioning this process, whether this is five years from now, ten years from now, two years from now, I'm going to walk you through a bit of a journey of exiting your business. What you want that to look like, leading up to the sale, after the sale, and then reverse engineering back to today so that you can really feel prepared when you when or if you are ready to sell your group practice. So I think that is all for today. It's a bit of a shorter episode. I'm really excited to jump into that episode where I'm going to be interviewing, as I said alluded in an earlier episode, Jenny Ward, a fellow psychologist, colleague and friend of mine who sold her business as well so she can really dive into her unique experiences. And I'm also going to be having an episode on, like the emotional toll of selling and all of the things I wish I knew prior to selling.

Ashley Mielke 00:17:02  So you can look forward to those upcoming episodes to wrap up our series. So thank you for joining me today again, if you are interested in working with me one on one as a as a consultant in your business, I am a consultant with the practice of the practice team. I'm really grateful for the work that I get to do with my clients, so if that sounds like something you'd be interested in, you can actually reach out directly to me if you'd like. Ashley at practice of the practice. Com and I am going to look forward to seeing you in the next episode. Take care.

Joe Sanok 00:17:46  We are so excited to bring these types of things to you as much as we can, so that you can level up your practice in a way that's just amazing. head on over to Alma's website. Hello, alma.com/jo, if you want help with credentialing, if you want help with reimbursement rates and a guaranteed two week payback again, that's. Hello alma.com/jo. Thank you for letting me into your ears and into your brain.

Joe Sanok 00:18:11  Have a great day. I'll talk to you soon. Special thanks to the band Silences Sexy for that intro music. And this podcast is designed to provide accurate and authoritative information in regard to the subject matter covered. It is given with the understanding that neither the host, the producers, the publishers or guests are rendering legal, accounting, clinical or other professional information. If you want a professional, you should find one.