Taking over a practice: how to evaluate it?

[Ligament]

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Hi All,

I am in the very fortunate position of being offered to take over an established PM&R/Orthopedic Medical (non surgical) practice. I am not "buying in" nor "buying out" the practice. I am being given it, as the owner wished to retire and hand the practice over in a more traditional way.

I am travelling to the practice soon to "look over the books" and learn about the business.

Problem is, I have NO IDEA what to look at. How to I evaluate the books? What kind of things do I need to look at?

Do you have any suggestions for resources that teach these very important and very overlooked aspects of our career? Any books, seminars, etc?

Really need help!

Best, Ligament

 

[juddson]

yes, I have a suggestion:

Spend a few dollars on an Accountant. You cannot HOPE to evaluate the books on your own. It's fine if you feel that evaluating the books in a meaningful way is unneccasary because you are getting the practice for free (I think it is important nevertheless) but you should NOT be under the delusion that you'll be taking a meaningful look at the books on your own.

Why is it important: because even though the practice is coming for free, it will almost certainly be coming with the liabilities as well - and these you need to be aware of and understand.

You're not paying for the business - spend some money getting a good accountant and/or lawyer to look at the books for you. There are accountants who sepcialize in this sort of thing.

I'm an attorney and I evaluated a dental practice (a buy-in) for a friend of mine a few years ago. About half way through, I realized I needed an accountant who did this sort of thing regularly. The accountant did a MUCH better job than I did. In my law practice, I helped companies buy and sell each other all day long (Mergers and Acquisitions practice), but i was illequiped to do the due dilligence when it came to uncovering hidden assets and liabilities.

Pleae TRUST ME!! A few thousand dollars spent here will be VERY worthwhile.

Don't even THINK about signing anything without an accountant or lawyer.

Judd

 

[bigdan]

OP-

I have an experience that I must leave as ambiguous right now that suggests that Juddson's advice is exactly right, at least in the realm of outpatient rehabilitation practice. As much as it pains me to say it (jk), the lawyer/accountant combo is probably the most surefire/comprehensive way to cover your bases.

And by the way, congratulations!

Good luck.

dc

 

[edmadison]

There are attorneys that specialize in this. I think an accountant is important, but DO NOT DO THIS WITHOUT AN ATTORNEY. Unfortunately, I don't know of any, but I image that you could goodle for them.

Ed