Closing Shop 101 (Week 5): Break It Up, Piece It Out

So I write this now from my mother’s home in Kansas City, Missouri. We have successfully packed all our life into 23 feet of storage and one 2000 Audi A8. Now it’s time for a couple weeks of much needed R & R.

And a little more blogging:)

So far in our Closing Shop 101 series, we’ve covered selling your practice, liquidating your practice, and hiring a manager to run your practice.

None of which I personally chose.

Instead, I went with our fourth option: breaking it up and piecing it out. I’ll tell you why later. But first…

The Basics

This is just as it sounds–instead of selling your contracts you give them away. This could be through sharing them among many therapists (e.g. “spreading the wealth”) or by giving them to one.

There are a couple ways to do this: 1) offer one or more contract(s) to different therapists in the area, 2) provide your client(s) with a list of therapists in the area who are currently accepting new clients, 3) a combination of #1 and #2, or 4) give all your contracts to one therapist.

This is probably the easiest option from a logistical, legal, and financial standpoint. No need to assess what your company is worth and no need to work with a lawyer to make sure the legal end is legit. You get to try and make sure your clients continue to receive services, ideally from someone you know and trust. And if you’re lucky, the timing will work so that you can help transition the new therapist(s).

The major disadvantage is that you don’t get any compensation, money or otherwise, for the work you put into building your practice. You are basically giving it away your hard work for free.

Pros and Cons

Here’s what I consider to be the pros and cons of option number 4:

Pros

• The easiest option from a logistical and legal standpoint.
• If you give your clients a list to choose from, it gives them control over who they want to continue services with.
• You will be free of owning and managing a business.

Cons

• You’ll need to plan for a different monthly cashflow.
• There is no financial reimbursement for the asset you have built. You are giving away your work.
• Unless you plan to continue your practice elsewhere, any marketing materials (e.g. brochures, websites, business cards, etc.) you spent money developing and printing will be useless.
• You’ll have to “let go” and trust these new therapists will take care of your clients.

Why I Chose This Option

I went with this option for a couple of reasons:

1. It was best for my clients. This was ultimately the deciding factor for me. As I mentioned in week 2, many of my client’s had recently undergone a major transition when one of my therapists resigned in March…only 2 weeks before I found out we were moving! And as I wrote then, I really didn’t think it was fair therapeutically to keep them from making their own choice.
2. I can take Neurosong with me. I don’t know yet if I will open a private practice in my new hometown (primarily because I know I’m going back to school in a year), but at least I have the option should I wish to.
3. In a small way I could “hand-pick” who I felt could best meet my clients’ needs. This option worked beautifully for me. At the request of my two large contracts, I was able to hand-pick who would continue providing services. I had time to introduce them to my clients and time to train them on the program. For my smaller contracts, I compiled a list of music therapists in the area who were currently accepting clients and gave the list to each of my clients. Although I recommended a couple new therapists to start with, this ultimately gave them control to choose who they felt could help them best.

It’s too soon, now, to know whether I made the right choice or not. But as we all do, we make the best choice we can given the options we have.

We’ve now finished the more permanent “exit strategy” options available to you. But there’s more! Stay tuned as we continue with some temporary options (e.g. if you go on maternity leave) and special considerations for therapists in private practice.

And, as always, feel free to leave a comment below or contact me if you have any questions or suggestions!

Tagged as: Exit Strategy, Private Practice