Q: I have been associating and want to go out on my own and start a PI practice. What factors should I consider in deciding whether to buy a practice or start my own?
A: I’ll start by stating that it is usually easier to buy an existing practice, for the following reasons:
- You have an existing patient base to work from and existing processes and probably employees who can help you get started
- You don’t have to go out and buy assets, like adjusting tables, furniture, etc.
- It’s easier to get a loan from a bank (with the personal financial situation you mention) for a “going concern” than for a startup.
BUT, some other factors come into play:
- Is there a practice available for sale in the specific area where you want to live, or are you ready to move to this location?
- Is the practice for sale at a reasonable price? In my experience, most DC’s want way too much money for their practices. It’s a tricky negotiation to get them to come down to an affordable and reasonable price.
- Is the type of practice compatible with the practice you want? In your case, do they do PI work? This type of practice requires a good relationship with local attorneys and other professionals for referrals, and a specific method of marketing. If the doctor is running a pediatrics practice, for example, it might be difficult to switch gears.
I do think it’s worth looking around in the area where you want to set up practice to see if there are any practices for sale that might be worth exploring. If you can’t find anything within a few months, then you could begin the process of starting your own.
Planning for Practice Success has a lot of information about negotiating a purchase and details about how to start your own.
