Buying a Practice: Lessons Learned (part 3)

Sometimes you don't know what you don't know. One experienced D.C. shares tips to help others contemplating the purchase of an existing practice.


Buying a Practice: Lessons Learned

I recently completed the purchase of chiropractic practice from my father. I thought it would be a relatively seamless process, but there were a few surprises along the way. Some of them could have been avoided had I done some preliminary research, but there wasn't time.

Although it had been discussed, my father and I had not begun planning for the transition. 

Looking back, the advantage during the purchase process was that I had worked with my father for several years, which allowed me to understand what made the patients and the office tick. It made the bumps easier to overcome because I knew what I was working toward.

For this reason, I would suggest it is important to work in partnership before buying out original owner.

Other things I learned that would have been helpful before the purchase was initiated:

  • While there was no start-up funding needed, I did use some savings through the process. 
  • Setting up a corporation with a new tax ID number before purchase is important.  Without it, transitioning insurance and Medicare is difficult. (A side note: make sure you set aside a significant amount of time to re-establish a relationship with the insurance company. This takes time.)
  • Make sure the current practice is incorporated. 
  • Because I didn’t have two years of tax returns with the practice’s tax id number, I could not secure a business loan.

In the end, none of the surprises were deal-ending, but in a situation where I didn’t know the practice and what I was working toward, it could have been. So, I hope that some of what I learned will make the purchasing process easier for others.

Note: This is the first in a four-part series of Dr. DeMatte's experiences in purchasing his father's practice.

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