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Help Evaluate Business Buy-In

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  • White.Beard.Doc White.Beard.Doc 
    Participant
    Status: Physician
    Posts: 964
    Joined: 02/06/2016

    One other point, the employees of the billing company should be paid strictly out of the billing company revenue, not as a practice expense to the other side of the practice.  Otherwise the owners of the billing company would be double dipping at the expense of the other members of the practice.

     

    #229620 Reply
    Liked by ENT Doc
    ENT Doc ENT Doc 
    Participant
    Status: Physician
    Posts: 3571
    Joined: 01/14/2017

    You would ideally not want to fleece your future young partners. So even if this makes sense for you right now financially it’s only supported by young people willing to overpay and without any asset accumulation along the way on the back end (unlike when real estate is separated). Agree with White Beard re: making sure expenses (including payroll, allocated overhead, benefits, etc.) for this entity are not being paid by you in addition to your monthly cost for them.

    #229640 Reply
    Avatar Tim 
    Participant
    Status: Accountant
    Posts: 3339
    Joined: 09/18/2018

    Docs on contracts
    Docs as Jr Partners
    Docs as Sr Partners
    Regardless of the reasons given, the hand you are dealt is obviously not and open and full disclosure arrangement. The Sr Partners will continue to negotiate in their own self interest. Some will favor a larger percentage when one leaves, others close to the exit door favor new money to buy their share. You may be the competitive bid, how much the existing Sr Partners will pay vs what you will accept. The lack of transparency is a signal. The numbers may be completely reasonable. But then again, you might decide Sr Partner isn’t for you. Don’t forget, feeling “selected” is. Grooming technique. Good luck with your ROI!
    You mentioned 5-8%. If you get to more than 10-16% seems you are chasing yield.
    Tie your buy in amount to performance of your investment. Shortfalls made up by existing partners. Share the risk with your new partners. Just a thought.

    #229644 Reply

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