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.

Planning

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.


The information in the NCMIC Learning Center is offered solely for general information and educational purposes. It is not offered as, nor does it represent, legal or professional advice. Neither does this information constitute a guideline, practice parameter or standard of care. You should not act or rely upon this information without seeking the advice of an attorney familiar with the specific legal requirements of the state(s) in which you practice. If there is a discrepancy between the site and an insurance policy you have with NCMIC, the policy will prevail.