Whatever your reasons for buying a medical practice – frustration at your work environment, a transformative idea to shake-up the profession or a simple passion for healthcare – the market is looking favourable now and into the future.
The industry is growing inexorably, fuelled by an ageing population and the growing complexity and range of medical treatments on offer.
So what’s the process for finding the right medical practice for you?
Choosing businesses to approach
When browsing medical practices for sale on BusinessesForSale.com, there are many ways – such as price, location and owner-financed opportunities – to filter the listings to a shortlist of suitable prospects.
Accessibility is important in many sectors but it is paramount in healthcare. Many of your patients will be elderly, in wheelchairs or simply too unwell to walk long distances.
“Try and choose somewhere in an attractive location; you, your staff, colleagues and patients need to be able to park easily,” a GP-turned-owner from a practice on the Mornington Peninsula told us. A nearby bus stop and being in the heart of a residential area helps too.
When you’ve found one or a few businesses of interest, you can submit enquiries to the sellers through BusinessesForSale.com – free of charge – to find out more.
Get a team together
A specialist, independent accountant, legal adviser and/or business broker experienced in buying and selling healthcare businesses will be invaluable. They can help you with matters like:
- Understanding the owner’s reason for selling
- Checking financial records, asset inventory, licences and property lease
- Checking how the business compares with others in the area
- Researching industry trends and market forecasts
- Conducting negotiations and closing the deal
Once you’ve negotiated terms – set out in pre-contractual, non-binding heads of agreement – it’s time to conduct due diligence: a thorough examination of the physical assets and relevant paperwork.
Due diligence
Here are some specific questions you might have about a medical practice:
- What condition are the facilities in?
- What is the condition, quality and range of healthcare equipment?
- Are there opportunities for expansion in the future?
- Can you get documentation verifying the number of patients?
- What is the practice’s reputation like? Google Business Reviews could be useful for gauging patient perceptions
- What is the standard of local competition?
- How hard is it to recruit doctors in that area? Talk to a GP recruiter
Then there are the basics. “It’s important to do your due diligence by looking over the books and checking the overheads,” the Mornington Peninsula-based GP-owner told us.
And if you’re going into a partnership, “do your research about who you’re going into business with before you sign any documents. Working with like-minded people is essential.”
If you discover previously undisclosed problems during due diligence, you may wish to renegotiate terms or abandon the deal.
Finance
“Make sure you have enough money to make the deal,” said the aforementioned practice owner.
There are specialist medical finance providers who provide loans tailored to the industry and can give you advice on the best option for your circumstances. Some can even loan you 100
“This is where a deep understanding of the industry comes into play and why it can be helpful to consult a specialist,” Nathan Marris, relationship manager at Medfin Finance, told National Australia Bank.
Tailored monthly loan repayments, which start low then rise in line with growing cash flow, might be an option.
“If you buy the property in your name your company can pay rent, and this will help pay off the mortgage,” said Marris. “If possible, you should have a clause written into the premises lease agreement allowing you the first right of refusal on the property in, say, three or five years’ time.”
Sealing the deal
Finally, you’ll finalise the deal and sign your sale and purchase agreement. Legally binding, the contract assures that the sale will go through and that arrangements for payment are made.
Once you’ve signed the paperwork, it’s all yours. Browse businesses in your area to find the right one for you.
