There are many reasons why a physician may seek to buy an established medical practice: just starting out, looking to change specialties, interested in leaving the hospital environment, etc. But just like any other major purchases in your life, buying a medical practice takes research and hard work. According to FundingCircle.com, you should begin the process by focusing on several key issues. In other words, ask yourself these questions:
What kind of practice atmosphere are you looking for? Are you laid back, high energy, or somewhere in between? Some physicians might not give much weight to this issue, but they do so at their own peril. It is far easier for you to walk into a practice that is already in step with your philosophies than it is forcing a staff and patient base to adapt to you. The latter choice may leave you with a staff that quits and a dwindling patient base. And if that’s the case, why bother buying a practice at all?
Take the time to ask the staff what their experiences have been with the practice. What do they like? What would they rather avoid? Having these conversations will help you develop a clear picture of the practice and its culture.
Do you have the right resources in your corner? Once you know what you want, you have to figure out how to get it. An accountant and a healthcare attorney will be invaluable in this process. Before you even begin looking at practices, interview and hire a team to help you with the all-important details. Contracts will need to be inspected; numbers will need to be crunched. Make sure you have experts looking out for your best interests.
Are you ready to do your due diligence? There is a long list of items that can be included in this category. You want to properly value the practice you are interested in purchasing. Examine the record books and identify the cash flow, revenue projections, status of accounts payable and accounts receivable, and much more. Here is where your team of experts come in. Have your accountant scrutinize the numbers and have your attorney determine any risk.
Also, examine the obvious. Ask the current owner why he/she wants to sell the practice, and then ask your attorney to verify their explanation. You don’t want to be caught off guard if there is a legal claim against the practice or if the practice is losing revenue.