As a practice manager, your role is not just pivotal to your medical practice's smooth operation and financial success, but also integral to the strategic planning for the future. While day-to-day operations often demand immediate attention, your involvement in succession planning, frequently overlooked, is a cornerstone of long-term practice stability and financial health.
Proactive succession planning is not a luxury but a necessity. By taking the initiative and implementing a robust strategy, practice managers can mitigate risks, ensure business continuity, and position their practice for sustainable success.
Navigating the complexities of succession planning often necessitates expert guidance. Accountants, lawyers, and financial planners can provide invaluable insights and support throughout the process. Their expertise can help optimise financial outcomes, minimise tax liabilities, and ensure a seamless transition.
A well-structured succession plan safeguards the practice's value, protects the owner's financial interests, and preserves the practice's legacy. It involves carefully considering potential successors, determining the optimal ownership structure, and addressing tax and legal implications.
Consideration needs to be given to capital gains tax, access to small business CGT concessions, GST and going concern issues, superannuation, and liquidation.
A succession plan should also include critical documents such as a buy/sell agreement and shareholders/unitholders agreements. A buy/sell agreement is a contract that sets out how an owner's interests in a medical practice will be transferred on exit. A shareholders/ unitholder agreement covers the operations of the medical practice, including structure, management, and direction. Insurance should also be reviewed in line with these agreements.
Given the complexities and potential financial implications of succession planning, it is essential for practice managers to initiate this process early. By doing so and by seeking expert advice, you can be confident in your decision-making and create a plan that safeguards the practice's value, protects the owner's financial interests, and ensures a smooth transition.
To initiate your practice's succession planning journey and ensure a secure financial future, contact Cutcher & Neale today. Our team of experts can provide tailored guidance and support to help you navigate the complexities of succession planning.