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Rules of thumb are simplistic and don’t usually work. Unless the practice in question is “average or below average” in all respects, you should probably get an appraisal. Your lender will also want an independent estimation of value before funding any loan.
A reasonable Covenant not to Compete will protect the employer’s goodwill without being excessively restrictive on the Associate. These areas tend to be smaller in Urban areas and larger in rural areas. However, individual states interpret these agreements differently, so please consult an attorney for definitive advice. In Louisiana, the maximum duration for these agreements is two years from the sale of a practice or termination of employment. This distance for the Covenant is limited by the practice’s service area, where most of the patients live and/or work.
The staff typically is as worried about keeping their job as you are about keeping them. If they leave, they must start working for a new doctor anyway, so why wouldn’t they give you a chance?
The patients will accept a new doctor if the introduction and transition are handled the right way. The seller’s endorsement, coupled with staff acceptance and enthusiasm, is the key.
We utilize several different methods to determine fair market value, including market comparisons, cash flow analysis, and capitalization of earnings methods.