TLDR
- Start planning early to safeguard personal goals and professional legacy
- Explore transition options, such as passing practice to family or selling to an external buyer
- Develop a strong exit plan, including tax-efficient and financially sound strategies
- Build a support team of financial, legal, and business experts that will work together to ensure a comprehensive plan
Preparing your practice for the next chapter
After years of building your practice and nurturing patient relationships, thinking about stepping away can feel both exciting and a little overwhelming. Even if retirement or selling your practice is still some years away, starting to plan now can help set the stage for a smooth transition, ensuring your patients continue to receive quality care while you prepare for a comfortable retirement.
In this article, we’ll explore factors to consider for a smooth transition and share strategies to help you plan thoughtfully for the next chapter of your life and career.
Why physicians should start planning now?
Starting your succession plan early gives you the time to explore your options, anticipate challenges, and make decisions on your own terms instead of under pressure.
It also helps safeguard what matters most: your personal goals and the legacy you’ve built. By thinking ahead, you can take smart steps to secure your financial future, protect the value of your practice, and plan a thoughtful handover that respects your patients, team, and reputation. Most importantly, early planning gives you control and peace of mind about the road ahead.
The role of a financial planner in succession planning
Succession planning isn’t something you have to navigate alone. A financial planner who specializes in physicians can be one of your most valuable allies. They can provide guidance tailored to your unique situation, helping you align your personal goals with your professional transition, and act as a steady guide throughout the process.
A financial planner can help with:
- Potential strategies to transition from your practice in a tax-effective way.
- Strategies or options to fill any gaps in your existing plans.
- Possible retirement savings solutions for you or your key employees.
- Overall financial and contingency planning to help protect you and your practice.
- Create a tailored retirement plan that fits your lifestyle goals and timelines.
Just as importantly, finding a financial planner who can help act as the hub for your team of advisors is beneficial. By working closely with lawyers, accountants, practice management consultants, and other specialists, they can help keep every part of your transition aligned and tax efficient — so your practice is well-positioned for a smooth transition.
With a professional offering this level of integrated support, you can anticipate challenges, avoid common pitfalls, and move forward with a clear plan. A skilled financial planner doesn’t just help you prepare for retirement — they help you build confidence in what comes next, knowing that both your financial future and the legacy of your practice are in capable hands.
Exploring your exit options
When it comes to stepping away from your practice, there’s no one-size-fits-all approach. It helps to start by exploring the different pathways available.
You might consider passing your practice on to a family member or a trusted colleague, keeping it within familiar hands. Alternatively, you could look at a partner or associate buyout, where someone already involved in the practice gradually takes over ownership. Selling to an external buyer is another option, though it requires careful planning to ensure the right fit and a smooth handover for both patients and staff.
Weighing these options early gives you time to understand the implications of each and choose a path that aligns with your personal goals, financial needs, and professional legacy.
Steps for a smooth exit plan
Planning a successful succession requires a clear roadmap and thoughtful timing. Consider these steps for a smooth transition:
Start by defining your goals — Do you want to retire completely, scale back, or sell your practice to a partner or associate? Understanding your vision will guide every decision along the way.
Assess the value of your practice — This includes reviewing financial statements, patient volumes, and operational efficiencies. Knowing the true worth of your practice not only helps in negotiations but also ensures you’re leaving behind a strong foundation for the next chapter.
Create a structured transition plan — This might involve gradually transferring patient relationships, training successors, and setting up clear agreements for ownership or profit sharing.
By tackling these steps methodically — and with the guidance of your advisors — you can minimize disruptions, preserve the quality of care, and secure both your professional legacy and personal peace of mind.
Start charting your path ahead
Stepping away from your practice is a major milestone, one that deserves the same care and attention you’ve given to your patients over the years. By planning early and surrounding yourself with the right support, you can navigate both the financial and personal sides of the transition with confidence, ensuring a successful path for yourself, your patients, and your team.
A financial planner who understands the unique needs of physicians can be an invaluable partner throughout the journey — from early succession planning to passing on your practice and moving into retirement — helping you turn to the next chapter with clarity and peace of mind.
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professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up to date, but we do not guarantee its accuracy, and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgement of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions,
information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.
This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.
