How to Avoid Financial Pitfalls of Purchasing a Practice by Charlene White www.charlenewhite.com
Warning Signs
A Nice Person
Lack of Business Training
Personal and Friend Experiences
Beware of the Selling Doctor
Advice from Your Professional Team
Don’t be Afraid to Fire Staff Members
Grammatical Errors are Red flags
It’s a Fallacy
Location, Location, Location
Evaluate 3 Year Trends
Rehire Employees
Non-compete Clause for Retiring Doctor
Study the Overhead and Calculate Your Numbers November 2008 Income $42,865 Retiring Doctor Salary $10,000 Rent $5,500 Payroll $18,000 BAC $8,595 Student Loan Payment $1,600 Former Doctors Supply Bills $5,000 Lab Bills $4,500 Major Expenses $53,195 177 % Overhead for November 2008
Renegotiate Your Lease Start-up Office
Research State Labor Laws
Do Your Own Bookkeeping
When to Say “You’re Fired”
Do Not Pay in Full
It’s No Fun to be in the Red
Study the Demographics
Questions to Ask Prior to Purchasing a Practice
The number of exams, records, and starts for the past three years.
A list of active patients with start and projected deband dates.
A list of retention patients with their deband dates.
A list of observation recall patients with last appointment date.
A list of active patients who are still in braces and paid out.
A copy of the patient contract and financial policies.
Current aging report and total contract amount due.
A profit and loss statement from the last three years.
A list of staff member’s names, salaries and benefit packages.
A list of referring doctors names and the number of patients referred by each doctor for the past three years.
Just Remember
If you don’t know what to do, don’t do anything.
Look carefully at multiple options.
Why ask for advice if you don’t follow it.
If your spouse has reservations, don’t do it.
Make the transition 3-6 months.
65% Rule
Old facility and new doctor don’t mix.
Do a clinical assessment.
Visit us at www.charlenewhite.com