If you’re a medical specialist and considering buying your own private practice now or in the near future, you need to consider whether you want to buy an established practice or set up a new practice. Each option will have its own pros and cons, and your decision will ultimately depend on your circumstances and your goals.
Buying an Established Practice
When buying an established practice, typically you will pay for the whole business including plant and equipment, client base and goodwill. You may also be required to take over any existing lease arrangements and employ existing staff.
The advantages of purchasing an established practice include:
- Established business processes, existing brand and client database.
- You may potentially save money from the existing equipment and fit-out.
- The staff members working at the practice are already experienced and know the business processes.
Some disadvantages you need to consider include:
- Equipment and fit-out may be outdated, inefficient or not suited to your business. In the longer term you may have to spend more money on maintaining or replacing them.
- Existing staff may show resistance towards a change of management and business processes.
Setting Up a New Practice
Starting from scratch allows you to set up your business exactly how you want it. You choose the premises, set up the business processes, hire the staff and fit out your practice in a way that aligns to your personal vision.
The advantages of setting up a new practice include:
- By purchasing new equipment and having a new fit-out, your practice will have state of the art equipment and a modern look.
- You choose your staff, who can be trained to your business processes.
You may need to consider the following downsides if starting from scratch:
- You will need to secure patients in order to start generating revenue, involving time, effort and marketing.
- The purchase of new equipment and fit-out will involve initial large costs, and cashflow may be tight during the early stages.
Deciding whether to purchase an established practice or setting up a new one will depend on your unique goals and circumstances as there is no ‘one size fits all’ solution. There are also other things you need to consider when starting your own practice. At Launch Finance, we can help you navigate the process of purchasing your medical practice, ensuring convenience and peace of mind.