Valley Forge, Pa. — Instead of simply closing the doors and having a fire sale, cosmetic surgeons can sell or "transition" their practice upon retirement and make a bundle of money doing it.
"A lot of cosmetic surgeons never really thought about what they were going to do when it's time to leave. They figure they're going to work until they stop and that's it," says John Downing, principal, Downing Associates Inc., a consulting firm for cosmetic surgery practice transition planning and sales.
"Cosmetic surgeons tend to be very driven, so they may want to work until they drop. In the end they may simply close their doors, sell their hard assets, have a competing practice take over their charts and not get a whole lot out of it beyond that," he tells Cosmetic Surgery Times.
Mr. Downing offers another option, which he calls "transitioning." Simply put, a doctor who wants to get out of the business looks for another doctor (usually younger) who will buy the practice and succeed him when he retires. If the two can come to an agreement, the senior surgeon mentors the buyer for about a year. The younger surgeon both learns from the senior surgeon and becomes a familiar face and a permanent part of the practice. The buyer, according to Mr. Downing, gets an established practice and some valuable experience out of the deal. The senior surgeon gets a large chunk of cash and the knowledge that their practice is in good hands.
The process may take from several months to a few years, according to Mr. Downing, so it's essential to start well ahead of the supposed transition time. Throughout the process, the surgeon will need good help, which is where someone like Mr. Downing comes in.
"Cosmetic surgeons usually don't have the time, experience or connections to find the right doctor to take over their practice," Mr. Downing says.
General practices such as family medicine or dentistry have always had more obvious value because of their solid, predictable patient base, and are thus more easily sold, according to Mr. Downing. Because cosmetic surgery is mostly elective, the patient base is not as predictable and the value seems to lie more in the reputation of the practice — which typically goes with the surgeon when he or she retires.
"That's why I put the emphasis on the transition element," he says. "The year or so that the surgeons work together might very well be the most important aspect of the deal. It makes the deal work," Mr. Downing explains.
The first step is to be aware of the options. Mr. Downing says that many cosmetic surgeons don't know that such a profitable transition is possible because it's not yet a common practice. Awareness helps the doctor make more informed business decisions while moving toward this future.
Next, careful planning is required, and having the right kind of advice is essential, Mr. Downing says, especially considering the time involved in the process and the importance of maintaining the value of the practice.
The value of a cosmetic surgery practice goes beyond the surgical reputation, Mr. Downing says.
"When I first look at a practice, which is part of the process, I want to see a healthy, running, current practice that the doctor has continually reinvested in," he says. "I've been in practices where it's obvious that the doctor hasn't put a dime into the place for more than 15 years. If you see a sinking ship and the guy's got one foot out the door already, you're not going to be in a hurry to lay down a pile of cash for it," he says.