How to Buy a Medical Practice

7 factors to consider when buying a private medical practice!medical-businesses-for-sale

The private medical industry i is still incredibly popular in the UK. We have one of the most advanced industries in the world and this is sought by a number of customers from within the UK but also from the international community. View our current private medical practices for sale
As the industry remains robust there is of course the subject of business transactions. For each medical private practice owner there will eventually come a point in the life cycle of the business where it must move under new ownership. This may be for a number of reasons however retirement is still the most popular one. This is still an incredibly important financial time for the retiring medical practitioner  where they would like to realise the full potential and value of the business but also see the practice move into a safe pair of hands.
Here are some thoughts on the buying process and areas that you will need to consider before purchasing your medical practice:
There are a large number of medical sectors be it within primary or secondary care. Naturally you will need to identify the sectors that you would be interested in operating and trading in however the limiting factor here will normally be your medical training and subsequent expertise. For larger practices this may be less of a factor as they tend to employ medical practitioners rather than deliver the services themselves.
2. Geographical location
Where in the country do you want to practice? There is no point purchasing a business 200 miles away as the practice may not be sustainable should you move it to a new geographical location.
3. Budget
What do you intend to spend on the practice? How much deposit do you have and how much of a loan will you require? Remember you will not need 100 percent of the purchase price initially as many deals are structured to favour the buyer and reduce the level of risk involved. Such "earn out" agreements can ultimately lead to the business itself paying the former owner from profits made after the transition in ownership.
4. Valuation
Once you have identified the medical practice that you would like to purchase you must ask yourself if the valuation is correct. A simple step would be to obtain a third party, independent valuation to assess the true practice goodwill. This would then be a good starting point for negotiations should the marketed price be substantially higher than the independent valuation. It is very difficult to argue against the expert services of a specialist valuing company particularly as this will probably be the first business transaction by the vendor.
5. Deal structure
Before making an offer to purchase a medical business pay to have some expert advice. There are a number of recognised deal structures that could be used. You don't want to make a mistake if this is the first time you are buying a medical practice. It can become quite expensive.
6. Who's buying?
It really depends on the location and the market capitalisation of the business. A small practice in Harley street is different to a multi national chain of hospitals. Don't think just because you employ someone or work with someone that they will be the only buyer. Full market value is rarely achieved when there is only one buyer.
7. Can I sell my private medical practice?
Many NHS consultants have a private practice. They always call us up and ask if there is any value in the practice.. The bottom line is that there is a goodwill value to every small medical practice and that someone, somewhere will be prepared to purchase it. Speak to us if you would like to know more information.
How do is move forward?
Register yourself with a recognised and specialist medical practice broker such as Morgan Cox.  Generally speaking medical business owners will always use specialist agents so the more medical brokers you are registered with the the better chance you have of being alerted to new practices that come to the market. Contact us for more information.

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