If you are a solo medical practitioner or healthcare business owner, a business succession plan is a key component of any asset protection plan. In most cases, a medical practice and/or family healthcare business constitutes a large percentage of the owners’ assets. Yet a significant number of businesses have absolutely no succession plan in place.
In thirty years of representing physicians, especially those in solo medical practice, I have come to understand why succession planning is so difficult. There are many reasons for this but I believe some of the most significant are as follows:
- It is simply difficult for many owners to imagine that anyone else (including family members or another physician) will run their healthcare business as well as they do. And they are frequently correct about this! Unfortunately, this is not a good reason for having no succession plan in place. It reminds me of naming guardians for minor children in a Will. Most parents feel that no one would raise their children with the same care and attention that they would; and that is probably correct. It is nevertheless foolish to simply ignore what would happen if both parents died. The same is true in business. Lack of a succession plan can lead to confusion and needless controversy following the death, disability or retirement of the owner.
- Many single owners have thought of succession planning, but simply do not know where to start. All that is really required to get started is to contact a professional…either an attorney or business consultant who specializes in this kind of planning. Business succession planning should be a team effort involving a number of professionals. But someone needs to spearhead the effort, and this is frequently the job of an attorney or consultant.
- Finally, I find that in today’s lightning-paced healthcare environment, it is simply hard for business owners to find the time for succession planning. Healthcare business owners should realize that developing a succession plan can save huge amounts of time and money in the future. Speaking in business terms, there is generally a huge return on investment. This alone should be an incentive to do some planning.
So if you haven’t started a succession process, start it now. We all think we are invincible and bullet-proof but we are not. Some are just luckier than others. The last thing you need to do is create an unnecessary burden for your family in the case of a personal or business catastrophic event.