1st step: correct for the differential of partners and employees vacation time off. E.g. if partners get 20 weeks off and you get 8 weeks off then their relative time worked per 52 week year is 52-20/52 = 32/52 = .61 ; yours is 52-8/52 = 44/52 = .84 of a year
2nd step: consider total compensation for that period of time: e.g. partners make 650k for their .61 year and you make 300k for your .84 of a year. Divide the yearly compensation by portion of a year worked to get pay density e.g. 1,065,573 vs your 370,000
3rd step: evaluate how LONG the differential occurs: e.g. for a 2 year buy in with no increase in pay for the employee, the differential would be 2( 1,065,573 - 370,000) = ~1,400,000
4th step: add in the accounts receivable buy in, "advertised real stuff buy in" e.g. 300,000 k and add this number to step 3 which gives you the true buy WHICH ASSUMES
everything goes perfectly and the practice really is as stable as they claim. Ask when their hospital contract is up. Most of the time, the contract is up before you are up for partnership.... lol. Basically this number assumes NO RISK which is insane. Risks also you get terminated as most contracts are "at will"; additionally the partnership can sell to an outside entity before your partnership admittance occurs etc.
This number for this real world example is 1,400,000 + 90k AR buy + 450k real stuff buy = 1.9 MILLION. Once again, this is not even a true buy in since you are not actually buying into anything for "partnership tract period" AND the partership can be void (and thus your at will employment) at any moment, especially with the changing medicine landscape.. oh and AI too.
4th step explained in more detail:
part AR: consider what you are actually buying into. E.g. accounts receivable is not a real thing to buy into. The accounts receivable are studies that are read and paid 30-90 days after they are read. You are generating those Acounts receivable as an employee when they get paid to the partners. Most "partnerships" have you buy into the accounts receivable despite you having a part in making them when you become partner. Most AR buy ins are about 80-100k.
part B: What actual real things does the partnership own? These include buildings. scanners, and anything else. Take the total value of the current assets divide by number of partners and you should get an estimated value of a new buy into the REAL things the partnership owns. So for our example, the total buy is about.
Good luck all. DM if you want to know who the worst practices are in the country. Hint these average a true buy in of 2-3 million.
2nd step: consider total compensation for that period of time: e.g. partners make 650k for their .61 year and you make 300k for your .84 of a year. Divide the yearly compensation by portion of a year worked to get pay density e.g. 1,065,573 vs your 370,000
3rd step: evaluate how LONG the differential occurs: e.g. for a 2 year buy in with no increase in pay for the employee, the differential would be 2( 1,065,573 - 370,000) = ~1,400,000
4th step: add in the accounts receivable buy in, "advertised real stuff buy in" e.g. 300,000 k and add this number to step 3 which gives you the true buy WHICH ASSUMES
everything goes perfectly and the practice really is as stable as they claim. Ask when their hospital contract is up. Most of the time, the contract is up before you are up for partnership.... lol. Basically this number assumes NO RISK which is insane. Risks also you get terminated as most contracts are "at will"; additionally the partnership can sell to an outside entity before your partnership admittance occurs etc.
This number for this real world example is 1,400,000 + 90k AR buy + 450k real stuff buy = 1.9 MILLION. Once again, this is not even a true buy in since you are not actually buying into anything for "partnership tract period" AND the partership can be void (and thus your at will employment) at any moment, especially with the changing medicine landscape.. oh and AI too.
4th step explained in more detail:
part AR: consider what you are actually buying into. E.g. accounts receivable is not a real thing to buy into. The accounts receivable are studies that are read and paid 30-90 days after they are read. You are generating those Acounts receivable as an employee when they get paid to the partners. Most "partnerships" have you buy into the accounts receivable despite you having a part in making them when you become partner. Most AR buy ins are about 80-100k.
part B: What actual real things does the partnership own? These include buildings. scanners, and anything else. Take the total value of the current assets divide by number of partners and you should get an estimated value of a new buy into the REAL things the partnership owns. So for our example, the total buy is about.
Good luck all. DM if you want to know who the worst practices are in the country. Hint these average a true buy in of 2-3 million.
