Kym Nitschke explains how doctors can decide between starting up their own practice or buying into an existing one.
It’s a decision you’ll face sooner or later if you’re interested in owning your own practice: should you buy your own or just buy into an existing one?
Both options can work perfectly well. But it’s up to you to decide which one works for you personally by weighing up the pros and cons of each option before making a commitment.
Buying into an Existing Medical Practice: Pros
The best part about buying into someone else’s medical practice is that you’re ready to hit the ground running. There’s no wasting time while you sort out the details, making mistakes and scrambling to assemble a capable team. Everything is ready and waiting for you, including patients!
Having an established patient base is also an invaluable asset. You won’t need to worry so much about marketing or bringing in business. The practice’s patients are already established at that location so they won’t be in a hurry to leave it. You’re essentially guaranteed to make money right from Day 1.
Buying into a Medical Practice: Cons
Buying into or taking over an existing medical practice can have downsides. These include:
– Missed opportunity to get everything built from scratch according to your preferences
– Existing staff may have a culture, work ethic or treatment approach that conflicts with your own style and values
– Current practice may come with liabilities and hidden problems that you didn’t know were there at the time you bought in
You can mitigate the negative aspects of buying in by taking your time, seeking professional advice and making sure you’re properly insured.
Starting Your Own Medical Practice: Pros
Clearly, opening up your very own medical practice is a golden opportunity to seize your dreams and carve out that perfect career and life for yourself.
Owning your own practice and building it from the ground up can be extremely rewarding. Many doctors find that doing so has given them a new level of control over their careers and the quality of care they can provide to their patients. Owning a practice can also be an incredible boost to your earning potential, investments and super savings.
You might want to think about starting your own medical practice if you expect to have many years ahead of you and you’re relatively free of obligations outside of your career.
Starting Your Own Medical Practice: Cons
Of course, starting a brand new medical practice isn’t for everyone. You need to be prepared to face the weighty responsibilities of opening a clinic if you’re determined to do so.
Some of the downsides of starting a practice include:
– You’ll need hefty loans or some other capital to get started
– Cash flow is always a concern, but particularly when starting out
– You must take your time and carefully scout the location to make sure there is a demand for a new doctor in any given area
– It takes more time to accrue a capable medical team and support staff
– You’ll have to search for your own patients in the new area
Opening a new practice brings with a significant amount of risk. If you can afford the risk and have a solid plan, then starting out with your own practice may be a good decision.
Business, Accounting and Wealth Management Advice for Buying or Starting a Medical Practice
Moving on to practice ownership is a critical milestone in the career of any doctor.
Whichever choice you’re inclined to make, you’ll do well to consult an experienced medical accountant before you do anything else. It’s clear that both options come with serious responsibilities, risks and opportunities, so you’ll want some help to ensure that you don’t make any costly mistakes in the process.
The accountants and advisors at Nitschke Nancarrow have years of experience in advising medical professionals just like you. We’ll take a look at your situation and resources and let you know what would be the best decision to make. Call us today to plan a no-obligation consultation.
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Nitschke Nancarrow are experts in the business of medical professionals – whether it is running a medical practice, or a personal tax or investment matter – contact us to get the right advice.
– Kym Nitschke
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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 practice management