Buying or Selling a Medical Practice in Ontario?
When contemplating whether to buy or sell a FHO practice, there are many things one has to take into consideration. These factors however, are dependent on which side of the transaction you fall into. Whether you are the buyer or seller, some of the key questions/issues you want to address are:
What is your Practice Worth?
Attaching a value to your medical practice can sometimes be a difficult task as you may disagree with the market on its estimated worth of your practice. Ultimately its worth is dependent on how much a buyer is willing to pay.
That being said, if you are in a rush to sell your healthcare practice it is recommended to initially start with a lower asking price. However, if you’re in no rush and have time on your side to keep your practice on the market, you should begin with a strategically higher asking price. There is a distinct correlation between the asking price and the period of time one has before the need to sell. The smaller your time margin becomes, the lower your price should be.
Considerations in the Medical Office Lease for the Seller
There’s so much at stake through the process of selling a family practice; it is imperative that you consider current obligations to your office lease and the assignment provisions within. Prior to completing your sale, it’s important to have the office lease properly reviewed to ensure that there are no hidden risks, and that the ‘assignment of the lease’ occurs properly, protecting the interests of both parties along the way. The best way to do this is by seeking help from healthcare leasing professionals like Cirrus Consulting Group for a professional, thorough review of the details in the office lease.
Also, consider whether you are in a solo medical office or with a group; it’s important to speak with your colleagues to ensure that they are aware of the upcoming changes. This is important so you may gain their support along the way with regards to group obligations. When it comes to the ministry, transitioning a healthcare practice has many steps involved. Make this process easier on yourself and look to professionals for help. Allow Cirrus Consulting Group to facilitate this process and take the burden off your shoulders.
When thinking about starting a family practice, you must consider the substantial time commitment and cost involved. If this is a situation that doesn’t seem extremely promising, it may be the ideal time to examine the idea of instead, purchasing an already established FHO practice. Although there is an initial cost upfront, the long-term benefits far outweigh the short-term investment. Benefits such as a guaranteed income from day one when buying a practice, as opposed to having to start from scratch and build a practice with unpredictable income, make it clear that a short term investment is a fair price to pay.
While the FHO model is the most popular payment model within family medicine, it can also be the most complicated. It is critical to your practice’s success, if you decide to use the FHO payment model, to ensure you are familiar with the ins and outs of practicing and optimizing a FHO practice from day one.
Considerations When Buying a Medical Practice
Considerations in the Medical Office Lease
As a physician looking to acquire a medical practice, it’s important to take proactive measures to ensure you’re protected from potentially dangerous language in the clinic lease.
Be sure to dig deep and ask the selling physician about their office lease obligations. One key question to ask is whether the office lease will be assigned to you or if you’ll have to sign a new one. It is also important to understand the expenses within the office, how these expenses are divided (if in a group dynamic), and what you will be responsible for on a monthly basis moving forward.
The above are few of the many items to consider within the lease. It is recommended to have the office lease professionally reviewed before moving forward with your new practice venture to guarantee your protection while providing the most effective and efficient flexibility to continue to run and grow your clinic.
Questions? Call to speak to one of our expert healthcare consultants to start planning your practice sale or purchase today by dialing 1.800.459.3413!