Signing the deed to purchase a medical practice is a serious investment undertaking and an even more serious business decision on your end. The process requires meticulous inspection compared to making investments for any other non-medical proceeding.
Before you start to feel daunted about buying a medical practice, here are tips from https://www.hprgrealty.com/practices-for-sale/ that you can use in making sure you get nothing but the best.
Tips In Buying A Medical Practice
1. Know About The Practice Itself
You need to be as knowledgable about what you want to purchase just as sellers are about their product. They do their research to be informed of the practice they’re marketing, and so should you learn about what you wish to buy. The phrase “Buyer Beware” is definitely applicable, and should be, in this endeavour.
This isn’t to say that selling physicians and/ or agencies are to be distrusted. Think of it as being a wise customer in that you should research on what medical practice you’ll be needing. If pieces of equipment will be included in the lease and/ or ownership transfer, what are their specifications?
At the same time, what of the office space? Will you have enough room to add other medical devices should you do so in the near future? How many rooms do you need? Ask yourself such questions to have a clearer picture of the practice you have in mind, and what you ought to be looking for in parallel to that.
2. Assets, Leases, And Taxation
Asset transactions will be beneficial to you as a guarantee that the whole of the operational purchase will be transferred to your name, without incurring liabilities from the previous owner, or the sellers themselves.
A simple reminder here is for you to check that all the items are listed down in detail. They should be individually defined and specified. Pieces of furniture, handheld tools to electric machinery, each of them is to be included as assets.
Ask the seller which items are owned and which ones are being leased. In the event that some of them are under an existing lease contract, inquire if this can be reassigned or if you’ll have to take over the lease itself. In addition, clarify if the office or the property is also under a lease contract at of current.
Should you choose this route, remember that tax considerations will be separate from the amount of your actual purchase and are not within the control of the seller.
3. Permit And Registration
This goes both ways, for you, the buyer, and the seller. If your permit and registration are in the green, it’s crucial that the same is true for your selling physician. You can contact local government bodies that regulate professional and/ or medical licensure screenings to be up-to-date with your licenses. Permits go through amendments from time to time so it’s best to be informed about these.
4. Cashflow And Revenue
It’s okay to ask the seller about how the practice has been doing in terms of revenue. In fact, the more transparent the seller is regarding this, the better. It will be telling of how honestly they carry their business transactions.
But in truth, the reason behind gathering data related to this is that you’ll want to acquire a practice that has the potential of growing, instead of coming to a slump once the transfer has been processed. A part of this is to gain insight into staffing costs, solicitor fees, and the like.
5. Staffing And Location
If you’ll be purchasing a practice that already has an existing staff at hand, go over their contracts. It will be good for you to know their background or experience, their credentials, and what previous feedbacks from patients have been (if any). What is their work culture like? How do they manage effective communication? Who is working part-time or full-time? What are their expectations from being transitioned to a new owner?
Secondly, from a business point of view, have a record of what their benefits are, annual leaves and sick leaves, etc. In case you wish to negotiate these, you can try to have them adjusted.
Next, key-in on the office location. Prime areas are more likely to have higher price tags than those that aren’t in this category. But here is where you can make calculations and decide if paying for a prime location is worth the projected cash flow, based on the practice’s previous income movement.
How To Improve Your Practice
After putting down your name on your desired medical practice and transferring all its assets to you, the next step will be to understand how you can improve your practice.
Staff, Not A Solo-Superman
Although the reputation of the head physician or dentist bears a heavy-weight on the reputation of the practice he or she belongs to, there are no “supermen” in this field. It’s true that primary care will be in your hands. Yet if you’re looking to grow your practice (right now, it probably already is), you’ll need different members of the staff to handle administrative matters. Along with this, you might also require full-time support staff.
You may be pondering on decreasing profit outlays by not hiring support staff. On the contrary, shoulder every aspect of it will bring profits to a halt as you’ll begin to struggle to keep up with business-to-patient needs on your own. Having a team will rectify this.
Productive Scheduling For Patient And Work Flow Balance
We can relate to why you’re so eager to do 20-hour shifts at a time. You want to increase your profit as soon as you’re able to. However, always think in the long-term. Doing so will wear you and your staff out. When that happens, work productivity will dip. Or worse, the practice will experience staff turnovers because of burnout.
It might work during the first few runs but it’s not something feasible once you begin to establish a solid patient base.
Thus, set realistic schedules. Let your administrative staff create a scheduling system where each attending physician, support or primary, will be able to do rounds without feeling overwhelmed.
By the same token, organize your office and separate waiting areas from busy medical rooms. The receptionist’s desk is typically situated by the door so that patients are able to immediately voice out their health concerns the moment they step in. Think of other such details for excellent office productivity.