Is it time to help your business grow by adding a partner or two to your medical practice? Before you commit, here’s the key questions to ask yourself.
Building out a medical practice with a partnership has many advantages over running a business solo. But there are challenges too. If you’re just now considering the possibility of growing your team, then you need to take your time before making this serious decision.
Why do you want to add a partner?
Think about – What is your purpose in adding a partner? How does this play into your business and personal wealth strategy?
Expanding your team could lighten your personal workload. It can also allow you to offer a wider range of services to your patients. Growing your team can also help you grow your business reach your financial goals faster.
Who do you want to add to your medical practice?
Bringing in a business partner is a huge investment financially, professionally and personally. You’ll probably spend more time with this partner than with your own family, for a time. So it’s crucial that this individual’s values and culture are a fit for your practice.
Even if his/her professional skills are sound, if their strategy doesn’t align with yours, then adding them could bring your business down.
Don’t forget, you’ll be sharing the profits of your hard work with this person. Ensure they have the ability to make a fair contribution to the partnership.
How can you successfully bring a partner onto your team?
Think carefully about what’s involved legally and financially.
What is your buy-agreement and what are your financing options? How will your business structure change by adding a partner? What documents and agreements do you and the new partner need to sign-off on? Does your new partner know what will be expected of them?
This is another crucial area where you need some advice before making any decisions. Talk to both your specialist accountant and lawyer.
When should you add a business partner to your medical practice?
Timing is everything. Before you add a partner, you need to make sure that your business is prepared for the steep upfront costs. Your practice may also need some adjustments to accommodate more staff and equipment.
Your business must be in the right place financially before you can consider adding a partner.
Indications that timing is right include good cashflow, savings and a reliable, growing client base. A specialist accountant will be able to evaluate this for you and provide an assessment and recommendations.
Do you have a reliable growth strategy?
Don’t add a partner and expect to just ‘see what happens.’ You should have a very clear strategy and ultimate goal when it comes to growing your practice. Get your business goals figured out before looking for a partner.
Ideally, your partner should have a great reputation and an existing network of clients and referrers. This is crucial. If your partner is bringing in clients from day one, cashflow will be less of a problem and your partnership will be well and truly on the road to success.
Are you prepared for the liabilities and debts that come with adding a partner?
You may feel that taking out a loan is necessary for growing your practice. That could be true, but you must understand that it represents a major debt for your business.
Additionally, your new partner may be bringing in some past liabilities or could incur new ones while working with you. You’ll need to address these liabilities in your agreements in preparation and brace yourself for some inevitable difficulties that you cannot foresee.
To make sure you’re fully prepared to build a medical practice partnership, you’ll need expert accounting and financial advice.
Talk to the experienced medical accounting Nitschke Nancarrow team, who have spent years helping medical pros keep finances under control and successfully build wealth.
– Kym Nitschke
The information contained on this web site is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser.
Taxation, legal and other matters referred to on this website are of a general nature only and are based on Nitschke Nancarrow’s interpretation of laws existing at the time and should not be relied upon in place of appropriate professional advice. Those laws may change from time to time.
Nitschke Nancarrow specialises in accounting, tax and financial advice for superannuation. Contact us now for a no obligations discussion about your needs.Tags: medical practice, medical professionals, partnership