If you are considering running your practice, one of the first questions that might pop in your mind is: should I start a new one or buy an established practice?
In this article, we’ll take a closer look at the age-old dilemma of buying an existing practice versus starting a new one from scratch.
1. An Established Concept
The benefits of buying an established practice are no doubt huge. At the top of the list is that an existing practice will have an established patient base and referral sources. Starting a practice from scratch means taking a big risk. How long will it take to build up an adequate patient base and establish relationships with potential referral sources? An established practice, especially one that has been around for years, has already shown that the concept and all the variables that go into it do, in fact, work.
2. Proven Cash Flow
Another massive benefit of buying an existing practice is that an existing practice has proven cash flow. You can look at the books and, in the process, determine just how much money is flowing in and out. With a new practice, you simply won’t be sure how much it will generate. This can make it tricky when you’re trying to figure out how to not only pay your practice expenses but your personal ones as well.
3. The Unproven Element
No matter how good your idea and/or your location, your new practice is still unproven. Despite the best of efforts, there may be an unforeseen variable that you or your consultants might have missed. However, when you opt for a proven, existing practice, this variable does not apply to you.
4. An Established Staff
A practice is often only as good as the people who support it. Starting up your own practice means that you have to go out and find all of your employees. This process is much more than sifting through resumes. A resume only reveals so much. A resume doesn’t reveal if a candidate will be a good fit for the practice, and it certainly doesn’t factor in chemistry. As any good coach of any team sport knows, chemistry is one of the greatest factors in winning a championship.
5. Established Relationships
A proven practice also comes with an array of practice relationships. When buying an existing practice, you are acquiring a proven performer. You know that the practice had what it takes to provide cash flow over a given period of time. Buying an existing practice also means gaining access to reliable suppliers and enjoying all the benefits that come with an established brand name and location.