Before You Sell: 5 Things Owners Wish They’d Known

Selling your practice can feel like a finish line. The valuation looks strong. The wire hits. The deal closes. But what many owners discover later, is that the sale itself is only one part of the story. What follows you after closing often matters just as much.

In a recent episode of the Group Practice Accelerator podcast, hosted by Jamie West Falasz of Polaris Healthcare Partners, Justin Marti shared five things practice owners consistently say they wish they had understood before selling.

If you are thinking about an exit in the future, these are the issues to consider now. 

Want further reading? Download our free ebook: 7 Questions to Ask Before Buying or Selling a Healthcare Practice.

Watch the Full Episode

https://www.youtube.com/watch?v=QIoozT6QCa0

1. Your Representations and Warranties Don’t End at Closing

When you sell your practice, you make legally binding promises to the buyer. These are called representations and warranties. They cover your financials, compliance history, tax matters, contracts, and operational liabilities.

For a practice that has been operating for decades, there is history. And in many cases, buyers expect you to stand behind that history for a defined period of time.

If something surfaces after closing (an unpaid tax issue, a regulatory problem, or a dispute tied to pre-sale operations) the buyer may seek recovery under those representations. Sellers are often surprised to learn that the sale does not fully sever responsibility for the past.

The solution is not to hide problems. It is to identify issues early, disclose them properly, and negotiate reasonable limits on exposure.

2. Indemnification Is Where Real Risk Lives

Indemnification determines who pays if something goes wrong after the transaction closes. It is one of the most important sections of any purchase agreement, yet it is frequently misunderstood.

Buyers, particularly private equity-backed groups, draft strong indemnification provisions to protect themselves from pre-closing liabilities. That is expected. The question is how those provisions are structured.

Strong seller-side protection often includes:

• A cap on total liability

• A basket that prevents small nuisance claims

• Clear time limits on how long claims can be brought

  
  

Without these protections, sellers can face repeated post-closing disputes and ongoing financial exposure. You may not eliminate risk entirely, but you can define its boundaries.

3. Life After the Wire Hits Feels Different

Most DSO transactions involve more than just a purchase agreement. They also include an employment agreement and, in many cases, an equity rollover component. On Friday, you are the owner. On Monday, you are an employee.

That shift carries real implications. Your compensation structure may change. Your decision-making authority may narrow. Your autonomy may look different than it did before.

Earnouts deserve particular scrutiny. They are often tied to performance metrics that can be influenced by management decisions, new debt structures, or operational changes introduced after closing. If overhead shifts or fees increase, hitting performance targets may become more difficult. The headline valuation number matters. But so does the structure underneath it.

Need more information? Read our full article: What to Expect in An Employment Agreement After Selling Your Practice. 

4. Non-Competes Are Stronger in a Sale Context

Restrictive covenants are common in healthcare transactions. What many owners do not realize is that courts analyze non-competes differently when they are tied to the sale of a business rather than employment alone.

When you sell your practice for substantial consideration, courts are generally more willing to enforce non-compete provisions. The logic is simple: if you received payment for goodwill, you cannot immediately compete against the buyer using that same goodwill.

Even in states where employment non-competes face increasing scrutiny, sale-related non-competes often remain enforceable if they are reasonable in scope and duration. Understanding this distinction before signing is critical.

5. Small Early Decisions Can Have Big Consequences

Many post-closing frustrations trace back to decisions made early in the process.

For example, Letters of Intent are typically described as “non-binding.” However, provisions relating to exclusivity and confidentiality are often binding. Signing an LOI without review can limit leverage before negotiations truly begin.

Corporate structure is another common issue. In multi-location practices, messy ownership records, outdated operating agreements, or unclear cap tables can complicate diligence. Buyers may delay closing or adjust pricing to account for the cleanup required.

Finally, unresolved liens or historical litigation are rarely fatal to a transaction. But surprises during diligence shift leverage to the buyer. Identifying outstanding obligations and understanding payoff amounts before going to market allows you to control the narrative rather than react defensively. Preparation reduces pressure.

The Bottom Line

Selling your practice is not simply about achieving the highest multiple. It is about structuring a deal that protects you after closing. Owners who later say, “I wish I had known that,” are usually referring to post-sale liability, employment terms, earnout mechanics, restrictive covenants, or preventable diligence issues.

The earlier you prepare, the more leverage you maintain. If you are considering a sale, recapitalization, or succession strategy, thoughtful legal structuring on the front end will determine how smooth life feels on the back end.

To learn more about preparing your practice for transition, reach out to our firm to start the conversation.