Buying a Medical Practice - Due Diligence
Consultant's Corner – Q&A with the Industry Experts
Question: What are the most critical things a buyer should be aware of when buying a practice?
"There are many important aspects a buyer will want to keep in mind when purchasing a medical practice. Some of the more obvious ones are conducting a complete due diligence review of all the books and records, having a lease assignment or new lease agreement for the office space, and securing financing for the acquisition, which are the typical buyers conditions to closing we see on a Letter of Intent. As well, there are other important aspects of the transaction that should be discussed and negotiated ahead of time with the seller and incorporated into the purchase agreement before the deal is finalized. These would include such things as a non-compete clause, transition assistance, and a billing and collections provision, all of which any reasonable seller should be willing to agree to. However, beyond the deal structure of the transaction, it is imperative that the buyer be mentally ready for the challenges (and rewards) that being in private practice brings, as this is one of the most critical aspects sometimes overlooked by buyers when purchasing a practice. There is nothing worse than having "buyer's remorse" for not fully considering or appreciating what being in private practice means, both good and bad! - David Lopez, Medical Practice Broker"