I WAS five months pregnant when I began thinking about my current practice’s acquisition; I started the business when I was eight months pregnant. I made it happen because I had the drive, I was determined I could make it successful, and I was, and remain, dedicated to working on it every day.

Here, I discuss how to determine whether an acquisition is for you, how to evaluate a practice before deciding to buy it and the steps needed to make it happen.

EVALUATE YOUR WILLINGNESS/ABILITY

For me the benefits of being a practice owner far outweigh the ownership challenges, such as keeping up-to-date on insurance changes. The sense of pride I feel in seeing my accomplishments on a daily basis is extremely rewarding. Also, the loyalty from my patients keeps me motivated to continue improving the business and, potentially, acquire other practices in the future to care for even more patients. But, practice ownership isn’t for everyone.

Here are a few questions to ask yourself when deciding whether this is the appropriate course of action for you:

• What tasks are you most happy completing each day?
• What tasks are you least happy completing?
• Do you give up easily when things don’t go your way?
• Do you like to work 9 a.m. to 5 p.m.?
• Do you like to make decisions?

From here, evaluate your answers. (See p.26 for an example.) Perhaps some obstacles are insurmountable to responsibly owning a practice and achieving your goals. Maybe, your goals align perfectly. Perhaps, it’s something to re-evaluate in the future.

VISIT THE PRACTICE

If you’ve determined that practice acquisition is for you, it’s time to visit the practices that have caught your eye. When evaluating potential practices, I recommend visiting the practice. While there, assess the condition of the office. For example, the aesthetic and physical needs: Will there need to be improvements to the building’s exterior and/or interior? Is the equipment what you need or is it outdated? Also, factor in how much money you will need to invest on improvements to make the practice the way you want it to be. Does the practice price make sense with the extra investments that you will need to make? Also, question the health of the business: What are the demographics of the current patients in the practice? Is the practice growing, stable or declining? Is the town/city growing, stable or declining? (See “Ready to Buy or Sell a Practice?” in the November issue for more specifics.)

Also, consider personnel: Do you fit well with the staff? Is the staff planning to stay once the acquisition takes place, or will you need to hire new staff? To determine this, ask the staff directly. (I met with all the staff prior to acquiring the practice and spoke with each of them individually and as a group about expectations, etc.) All these factors need to be considered to know whether the practice is a good fit for you.

I looked at three practice acquisition opportunities the prior two years or so before making a decision on the practice I have today. For all these instances, I had either previous professional experience within the practice or had visited on multiple occasions to get a feel for the inner workings.

CONSULT PROFESSIONALS

The first person I sought advice from was my banker, who had experience with medical practice acquisitions. He helped me analyze my personal finances, so I could determine what I could afford to purchase and guided me through questions and scenarios I had not thought about prior to deciding to acquire a practice. The banker also stressed the importance of having a good accountant and lawyer and provided me with names of people he trusted and knew had experience in situations similar to mine. (Side note: Bankers do not charge an hourly fee, so it’s helpful to get their advice before investing in the advice of others who do charge. Bankers are also invested in wanting you to succeed, so you can pay your loans back.)

Next, I reached out to the two recommended accountants. Given that I needed this person’s advice, I knew I wanted him or her to be very direct and to the point. I did a mini-interview with each. One of the accountants was very passive and the other was assertive, so it was an easy decision. My accountant ran the numbers of the practices I was interested in and gave me feedback to help me negotiate the purchase prices of each, so I could decide which one to make an offer on.

For example, I was advised that the first practice I was interested in was going to require me to work for a few years sans payment to pay off the debt of purchasing the practice. Knowing that I would not be happy working every day without any financial reward for a long time, I decided against buying this practice. The lesson: If you choose practice acquisition, be prepared to hear that you may have to go some time without a large income, possibly making the practice price out of range.

PERFORM DUE DILIGENCE

The final person I spoke with was the banker-recommended lawyer. This is important, as he or she will be able to make sure there are no lawsuits on the practice you are interested in acquiring and can, at the appropriate time, transition the practice acquisition to setting up shop. My lawyer helped me to set up the business name and check availability on the name I liked. Also, he went over the differences of business types, so I could choose whether an S Corporation or Limited Liability Company (LLC) was the best for me for tax purposes. He then submitted all the documentation for me to get a tax ID number and set the bylaws for the corporation.

NOT FOR EVERYONE

Practice acquisition is not for everyone, but for me, it’s been a great experience. Not only has it been more financially rewarding than being an employee, it, more importantly, gives me a greater sense of accomplishment. I urge you to ponder what you want to accomplish in your career. If ownership is a goal, assess the opportunities in the area where you would like your practice, and consider the steps above to see what prospects await you. OM

DR. MILLER, O.D., is the owner at Visual Eyes Inc. in Lima, Ohio. She is a member of the Ohio Optometric Association where she has served as the zone governor and membership coordinator. She can be reached at drmiller@wcoil.com. Visit tinyurl.com/OMcomment to comment.