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Purchase An Existing Clinic

Reason for selling - Good:

  • Doctor wants to retire.
  • Doctor wants to move.
  • Doctor can no longer practice due to health.
Reason for selling - Bad:
  • Doctor needs money.
  • Increased competition in area.
  • Pending legal or financial problems.
  • Licensure/disciplinary problems.
  • Practice and catchment area has been declining.
  • Doctor wants to set up else where in same area.
  • Lease problems.
  • Major tenant or business relocating.
  • Insurance coverage has decreased or been eliminated in the area.
  • Immediate income and positive cash flow.
  • May have help with financing from existing loan or Doctor.
  • Get to see a large volume of patients immediately.
  • You are the owner and will continue to build your practice.
  • Income potential is great.
  • The location is established and will get continuous patient flow, existing and new.
  • Access to clinic contacts and suppliers.
  • Staff is already trained and experienced.
  • You can change practice operations / procedures / staff to suit.
  • Less time / energy required compared to starting up.
  • Access to reactivate old patient files.
  • New marketing plan / ideas may attract more patients and reactivate old patient files.
  • Large initial start up / capital required.
  • Clinic may require updating such as leaseholds, equipment and furniture.
  • More buyers than sellers.
  • Responsible for all overhead/expenses.
  • Practice operations/procedures are deeply entrenched.
  • Staff resists new ideas and change, may have personality conflicts.
  • Get to see a large volume of patients immediately.
  • Responsible for all administrative duties.
  • Have to transition from existing Doctors technique/philosophy to yours.
  • Have to transition from existing Doctors personality to yours.
  • Patients are used to existing Doctor and feel abandoned.
Important points to consider!:
  • How long has the practice been for sale?
  • What is for sale? Turn key, files, goodwill, equipment / furniture, leaseholds, accounts receivable, real estate?
  • Is existing financing available or will the existing Doctor help with financing?
  • If there is an associate or contractor why are they not buying?
  • If there is an associate or contractor, are they staying? What is in their contract? Is the practice protected against competition and solicitation?
  • Age of leaseholds, equipment and furniture?
  • Existing Doctor’s personality? Do not want to follow a superstar, 85% of practice success is non-technical skills or personality (New England Journal of Medicine).
  • Existing Doctor’s technique/philosophy.
  • Existing Doctor’s gender.
  • How long has the Doctor been in practice?
  • How long has the Doctor been in practice at this location?
  • How long has the staff been there, type of training and will they remain.
  • What is the lease situation? What type? Length, cost, leaseholds, is it transferable or extendible, future plan for mall, and building or major tenants.
  • Are there any financial / liability/contractual obligations of the practice?
  • Are there any liability or lawsuit problems with the practice?
  • Are the past financial records and tax returns available? Revenues, overhead and net income? Are they increasing, stable or decreasing?
  • Are old appointment books available?
  • What are the patient demographics? Age, income, education, ethnicity, gender…
  • Is the practice in or near an area you want to live (urban, suburban or rural)?
  • What type of practice? Acute care, wellness or mixture.
  • What is the insurance coverage breakdown, WCB, auto, medicare, social assistance, native affairs, etc?
  • Is the existing Doctor willing to work an appropriate transition period?
  • Is the income generation transferable? Not a big issue in Canada.
  • How did the previous Doctor market and advertise?
Available in the Members’ Only area of the web site!
  1. How to evaluate existing clinics using examples?
  2. A sample purchase / sale agreement.

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