If you’ve decided buying a practice might be worthwhile, and found one or more that might be for sale, it’s now time to start looking for the right fit. There are a thousand possible questions you can ask during the “due diligence” process of buying a practice, and that takes time and energy–for now, we want a way to assess whether any of our prospective practices are worth really digging into.

In other words, before we get into deciding what a practice is worth, we need to decide if it’s worthwhile.

1. Does the reason this practice is for sale matter to me?

If you’ve found a practice for sale, it’s for sale for a reason. Some of those reasons affect your ability to be successful, some don’t. If the current practitioner is moving across the country to get married, that doesn’t matter to you. If there’s so much competition that they haven’t been able to make a living, then that might.

You need to know three things:

  • Why they’re selling
  • What they’ll do after
  •  Where they’ll be

2. Can I make their practice my practice?

This is about fit and transferability. There’s no point in buying a practice you’ll hate commuting to or working in. And there’s no point in buying a practice if a decent portion of the existing clients aren’t a fit, or won’t transfer over.

For fit, you’ll need to know:

  • If the products, services and technique or style are similar to what you would offer
  • If the practice offers many things you don’t want to
  • If it feels good
  • If you like the staff or other practitioners

For transferability, you’ll need to know:

  • If there is complete contact information for all clients
  • If there has been regular communication with the patients – email newsletters, for example
  • If the current practitioner will endorse you, and stick around for a while to help transition the practice
  • If the practice has been marketed under the practitioner’s name, or a business name – Jane Doe’s Chiropractic vs Amazing Chiropractic, for example
  • If the current practice is unique in some way, compared to other practices in the area

3. Can I grow this practice?
Most practices need growing. Even a “closed” practice loses clients over time and needs replacements. More often than not, you’ll be buying a practice that you’ll want to grow.

Some of the questions in #2, above, will help, but you’ll also want to know:

  • If the practice been growing or shrinking…and why.
  • If patient/client retention is high. Low retention might indicate a low reputation, too.
  • What the competition has been like for the past few years. Is it increasing or decreasing?

Most of these things can be discovered in conversation with the owner, a big-picture view of the appointment book and financials, some poking around town, and a little introspection. Here’s a hint: stop worrying about the money. We’ll look at valuation next, but for now, just focus on answering those three big questions.

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