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"What we can do for you..."

Security
A big advantage in buying an ongoing practice is that you, as the new owner, have an immediate cash flow and an established customer base.  You do not have to build a practice; you simply take over an existing, successful practice with the present owner’s assistance.

Financing
We assist you in obtaining financing.  Banks are reluctant to finance practice purchases for several reasons.  One, all small practices attempt to minimize profits shown on financial statements to reduce tax liability.  Also, a bank cannot come in to manage a practice if foreclosure becomes necessary.  Therefore, over ninety percent of practice purchases are financed by the owner himself, which demonstrates his confidence in the practice.

Confidentiality
Unlike the sale of real estate or franchises, the sale of an ongoing practice is very confidential for both the seller and the prospective buyer.  All inquiries are held in strict confidence.  Meetings are confidential, and we are available after hours and on weekends.

   
Things a buyer should know 

We at Medical Business Practices are advocates of finding a practice that you like and feel comfortable managing.  You, like every other prospective buyer, have a vision of being your own boss and calling your own shots.  An old saying in the real estate industry is … “The three most important things a buyer should look for are location, location & location.”  While location is important to a practice buyer, be aware that track record and management round out the three components of a successful practice.  Let us assume that you find a practice that you like and its location is fine, but because of poor management, the practice may not show the greatest record of accomplishment.  Purchased for the right price and terms, this practice could become more successful with proper management making it a good way to achieve your vision of being in practice for yourself.  Finally, be aware that many practices sell for much less than they are originally listed… sometimes-even 50% less.  So, if it is a practices that you like, do not be afraid to make what you consider to be a low offer.

   
The Process 

The process of buying a practice is as follows:

¨      Evaluate the basic information on alternative practicees that sound interesting to you.
¨      Visit the practice (if possible) without announcing yourself as a buyer (incognito) to get a “feel”
        for the practice.

¨     Meet with the Seller, asking from general to probing questions on anything and everything, except
 actual price negotiations.

¨     Do your preliminary evaluation, based on the information provided by the seller to Equity Professional Practices Inc. and you.

¨     Make an offer, assuming that all of the information you have been provided is correct, but include
 contingencies, which allow you to confirm such information.  Medical Business Practices Inc. will show you how
 to write an offer to protect you as the buyer.

¨     Once a sales price is agreed upon, make a closer investigation of the practice, confirming to your
 satisfaction the validity of your offer.

¨    Have documents prepared for the closing.  You may agree with the seller to share the cost of a closing
attorney.  This lawyer will not argue the position for either party, but drafts all necessary legal
documents to comply with the agreement a buyer and seller have reached.

¨     Close the purchase, and begin your first day as the owner of your own practice.  The seller will
 assist in an orderly transition because most of his money is coming from your success.

¨     You are part of the American Dream – You and your family own your own practice!

    
Top 10 Tips for Buying the Right Practice Right

1. Buy a practice you like.  Although profitability is important, you will risk making a terrible mistake if you do not buy a practice that you like.  Often, people who buy hastily without considering personal satisfaction later sell their practices at a loss.  Will you be proud to own the practice?  If you are not sure, do not buy that type of practice.
2. Be flexible.  Equity Professional Practices Inc. advises its clients to be open to all sorts of practices.  Do not lock your self into a McDonald’s or a Mailboxes, etc.  Who knows, you may surprise yourself by taking a liking t a Blimpie or Signs Now franchise.  If you lock into only one type of practices, it will take you much longer to find a practice to buy.  Examine the following categories: retail; service; manufacturing; distribution; restaurant; lounge; coin-operated practice.  First, decide if there are any categories that you do not want to be in, then focus on the remaining categories.
3. Do not expect much financial information.  Do not expect “traditional” financial information from the owner of a privately owned practice.  The only accounting required of a privately owned practice is filing tax returns, which are prepared to report the lowest possible tax liability.  There are other ways to verify cash flow later.
4. Consider chemistry.  This may seem like an unusual recommendation, but Equity Professional Practices Inc. tells its clients to forget about buying a practice if they do not like the current owner.  The buying process is a long and somewhat complicated one -- it is imperative that the buyer and seller work through it together.
5. Go with owner financing.  The owner of the practice should finance the purchase.  In most cases, this is the sole source of financing available to buyers of an existing practice.  With owner financing, you can feel secure in believing the owner’s representations as to income and expenses, and you have a remedy if there are any problems after closing.  It also gives you a “silent partner” with a personal stake in you success.
6. Do not pay cash.  You may not want a loan over your head, but do not pay all cash for a practice – even if you have it.  You should keep a stash on hand for emergencies and practice improvements.  If you insist on paying all cash, at least place some of the purchase price in escrow for a period of time to protect yourself from any problems that may surface after the closing.
7. Make an offer before you have seen all of the financial and other practice records of the practice.  It is simply not possible to know everything about a practice before you make the initial offer.  The offer does not commit you to the practice, but it does let the seller know you are serious.
8. Stay calm.  Buying a practice can be like dating.  You’ve got so many emotions going    – do you like the practice, does the owner like you, is this feasible, what does my family think, etc. – that you’re bound to get a little flustered.  Keep your wits about you; you will need them.  Remain calm, and negotiate your offer with quite reflection and reasoned discussions.  As you go through negotiations, always use this simple formula: Cash Flow Available minus Annual Payments to Owner = $$$ for you and your family.  If at any time during the negotiations this formula does not result in enough money for you and your family, stop.
9. Investigate the practice.  Once the owner has accepted your offer, the real work begins.  Verify cash flow and identify any hidden problems.  If you see red flags in either of these areas, change or terminate your offer.  There should be stipulations in your offer that allow for this.
10. Close quickly.  Once the deal is made, try to close as quickly as possible.  You do not want owner to have second thoughts or news of the sale to leak out to employees, suppliers and clients. 

• 90% of all buyers are first-time buyers.  In other words, they have never been in practice before.
• 90% of all buyers will finance the purchase of their practice.
• 90% of all buyers do not know what kind of practice they want or best serves their needs.
• 90% of all buyers are terrified and/or uneducated in the practice buying process.
• 90% of all sales will be financed by the seller.
• 90% (or more) will not buy the practice that was advertised or the one that they called in on.

   
Advantages of Buying an Existing Practice

• Actual results rather than pro-forma.

• Immediate cash flow.

• Trained employees in place.

• Established suppliers and credit.

• Established customers and referral practice.

• Existing licenses and permits.

• Training by the seller.

• The availability of owner financing.

    
Note:  Remember ultimately the success or failure of the practice is the owner’s responsibility, 
           and there is no “Right” practice, so buyers must be flexible.

Interested in a practice we have listed on our website?  
Get started today by simply filling out a few forms.  Click here!