Why Buy An Established Practice?
Waiting Period Be cognizant that obtaining ample cash flow of a new practice can take months, sometimes longer than you can substain your practice operational expenses. Another consideration, would be to check out the saturation level of your specialty practices in the area that you have selected. Often in the most desirable areas, the chances of success are greatly reduced because of the lack of population density. If you are able to re-qualify for more working capital, then the additional influx may save you from despair. ProMed can be of assistance.
Immediate cash flow – One of the greatest benefits of purchasing an established practice is that you avoid the “Waiting Period” and can instantly enjoy the cashflow and revenues from the existing patient base However, be prepared for an unknown attrition and have ProMed obtain working capital loan if you see any signs of negative cash flow.
Access to Financing–Loans are more readily available for an acquisition than for a start-up. A history of revenues from the previous owner will assure the stability needed for loan approval and timely loan payments. ProMed has several different programs that can be tailored to your specific needs.
Working system – Don’t underestimate the value of a working system with software programs in place as well as administrative systems including personnel and predefined responsibilities. Some new business owners struggle for years perfecting their operating systems. You may be able to improve it, but at least there will be a process you can adopt from day one.
Trained staff – It can take months or years to find and train even one employee. There is, possibly, an unrealistic fear from buyers that staff will abandon them after they purchase. The reality is that employees often respond with enthusiasm to a new owner’s arrival. They may be eager to tell a new owner their ideas for improvement that were perhaps ignored by a previous owner that was “stuck in his or her ways”. Good staff may see a new owner as an exciting opportunity for a fresh start and growth.
Seller transition–The Seller will be there based upon a mutually agreeable time period to ensure that the business continues as a matter of pride, and will be a fountain of wisdom and advice (even though you may reject some of it). They will know the answers to questions you forgot to ask during the due diligence period, as well as ones you would only formulate after years of working experience.
In summary, buying an existing practice is a wise move!