After being employed in a practice for a while, some doctors look into setting up their own practice. Starting from scratch can be appealing to practitioners who want to control every detail of the practice, including the design and culture.
For GPs put off about the prospect of owning their own practice due to concerns about cash flow, business skills and administration, an alternative is to buy a medical practice which is already operating. In addition to being potentially more financially suitable, there are many advantages of buying a GP practice.
Some of the advantages of buying a medical practice that is already established include:
- Experienced staff who know the patients.
- Save time on planning.
- Such practices will also have equipment and furniture in place.
- The biggest advantage of buying a GP practice is that there is no loss of cash flow as when building a new practice because there is an existing client base.
When you are looking to buy a medical practice there are many things to consider, which include:
- The most important of which is price and location. A practice in an urban area will be more expensive than one in a rural area but will probably bring in more clients.
- Practitioners should also determine whether the existing equipment is owned or leased, and whether it needs updating.
- Older practices may have outdated computer systems and inefficient billing or scheduling software.
- Existing long-term staff may need to be taken through a change management process or be required to undertake training if you are bringing in new systems and policies.
- There may be advertising costs associated with re-branding.
- Determine any existing liabilities and confirm the practice is up to date with payment of liabilities such as tax, superannuation and long-service leave.
- It is advisable to seek professional valuation via a review of financial statements to determine the income earning capacity of the practice.
- Agreements outlining clear intentions are essential for GPs wanting to buy a medical practice, along with a specific exit strategy for the existing owner.
- GPs also need to consider corporate structure, insurance, practice management and billing, and career flexibility.
Those wishing to buy a medical practice could benefit from discussing the details and the potential of the business with an advisor experienced in this area. If you’re interested in viewing available real estate, you can browse our medical practices for sale today.