Practitioner Resources

1. Consider the reasons why the current Doctor is selling the practice:


GOOD reasons for selling:
Doctor/therapist(s):

  • Wants to retire
  • Needs to move (relocating to another city or country – not just down the street)
  • Health reasons prevent practicing
POOR reasons for selling:
Doctor/therapist(s):

  • Needs money
  • Has lease issues
  • Has pending legal issues
  • Wants a new location in the same area
  • Increased competition in area
  • Licensure/disciplinary issues
  • Practice and catchment area has been declining
  • Major tenant or business relocating
  • Insurance coverage has decreased or been eliminated in the area

2. Consider the pros and cons of purchasing a practice:


(+) Positive:

  • Provides immediate income/ positive cash flow
  • Financing available (from existing loan or parties involved)
  • Immediate patient load
  • You are the owner and can build on what already exists
  • Income potential is great
  • Established location
  • Immediate access to clinic contacts and suppliers
  • Staff is trained and experienced
  • You can change practice operations / procedures / staff to suit
  • Less time / energy required compared to starting up
  • New marketing plan / ideas may attract more new patients and create
  • interest in long-term patients
(-) Negative:

  • Large initial start-up costs / capital required
  • Clinic may be outdated – may need lease, equipment, or furniture updated
  • Competition – more buyers than sellers
  • High responsibility – expenses and liability
  • Practice operations/procedures are deeply entrenched
  • Staff may be resistant to new ideas, change and may have personality conflicts
  • Large volume of patients to treat immediately
  • Responsible for all administrative duties
  • Patients have to transition from existing Doctor/therapist(s) technique/philosophy/personality to yours
  • Patients are used to existing Doctor/therapist(s) and feel abandoned

3. Important points to consider:


General Questions:

  • How long has the practice been for sale?
  • Why is the practice for sale?o What is for sale- Turn-key, files, goodwill, equipment / furniture, leaseholds, accounts receivable, real estate?
  • Is existing financing available or will the existing Doctor/therapist(s) help with financing?
  • If there is an associate or contractor, why are they not buying?
  • If there is an associate or contractor, are they planning on staying?
  • What is in their contract? Is the practice protected against competition and solicitation?
  • Age and condition of leaseholds, equipment, and furniture?
  • What is the lease situation?o What type? Length, cost, leaseholds, is it transferable or extendible, future plan for location, upcoming renovations, or major tenants?
  • Are there any financial/liability/contractual obligations of the practice?
  • Are there any impending liability or lawsuit issues with the practice?
  • Are the past financial records and tax returns available?o Revenues, overhead and net income? Are they increasing, stable, or decreasing?
  • What is the insurance coverage breakdown?o WCB, auto, medicare, social assistance, native affairs, etc?
  • Is the practice in or near an area you want to live?o urban, suburban or rural
  • What type of practice is it?o Acute care, wellness, integrative, or mixture
  • What are the patient demographics?o Age, income, education, ethnicity, gender
  • Are old appointment books available/included?
  • Is the existing Doctor/therapist(s) willing to work an appropriate transition period?
  • Is the income generation transferable?
  • How did the previous Doctor/therapist(s) market and advertise?

Interpersonal Questions:

  • Existing Doctor/therapist(s) personality?o Do not want to follow a superstar, 85% of practice success is non-technical skills or personality (New England Journal of Medicine)
  • What is the existing Doctor/therapist(s) technique/philosophy/style?
  • What is the existing Doctor/therapist(s) gender?
  • How long has the Doctor/therapist(s) been in practice?
  • How long has the Doctor/therapist(s) been in practice at this location?
  • How long has the staff been there?o Are they satisfied, type of training received, will they remain?

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