Buying an existing practice or setting up a new practice can be incredibly daunting! That’s why it’s so important to surround yourself with professional experts who can help your journey to be as smooth as possible.
Remember to always check their credentials and whether they need to be licensed to provide advice. Plus, look for testimonials and recommendations where they have executed the same or similar services for a comparable medical, dental or veterinary practice owner.
Credabl's Ali Joyce shares who, why and how these advisers can help you when buying or starting a practice.
When you own your practice, it is so important to set up all structures correctly from the start so that you don’t get stung later on with taxes you could have avoided. Getting advice on what is right for your specific circumstances is also incredibly important. What works for your business, may not work for another. An accountant can discuss with you the pros and cons of all different entity types such as companies, trust versus being a sole trader. Essentially, the primary outcome is to maximise tax deductions and reduce the tax you pay. An accountant can also help your future tax plan and map out your tax instalments, so that you don’t get hit with a big tax bill after your first year of business.
Engaging a financial planner is another key expert to engage when buying or starting up a practice. They can provide advice around your short and long-term financial goals, and can also work alongside your accountant and financier with tax planning, asset allocation, risk management, retirement and estate planning. As a common part of the process, a financial planner will review your life and income insurance, ensuring it is adequate – this is so important when you are potentially taking on more debt when owning your practice.
When you want to buy commercial property in your self-managed super fund, or SMSF, it is a requirement that you seek financial advice. Or in some cases, when you are taking out goodwill debt for buying a practice, you will be asked for adequate life and income insurance to cover the debt and loan repayments. This is where a financial planner can help.
A lawyer is going to assist you with setting up any legal documents. This can include your trust deed, partnership agreements, shareholders agreements, lease agreement, employee contracts, and also business purchase contracts. Lawyers can also assist with reviewing any documents you have received from 3rd parties. Investing in the right advice upfront can potentially save you from unexpected and difficult situations in the long run.
A buyers agent, or buyers advocate, is handy to engage when you need assistance in finding a commercial property to buy, or want some help with the negotiations. The key difference between a buyers agent and real estate agent is that they work for you, not the seller. It means their job is to help you find the most suitable property, in the right location, at the right price and negotiate with the selling agent on your behalf.
When wanting to buy an already established practice, the best place to start is by contacting a local business broker that specialises in selling medical or dental practices. You can share with them what type of practice you are after, and they will either show the current suitable practices for sale or register your interest for upcoming practices. The upside of going through a business broker is that they are the middleman between you and the seller. They will provide you with a full information memorandum on the business, financials and a price guide if you want to put an offer in.
Using a settlement agent when buying a practice or commercial property is an absolute must! They will work with you and all parties involved to make the settlement happen on time. A settlement agent will also ensure all relevant funds are handed over, all relevant forms are lodged for stamp duty if applicable in your state, and that if there is any debt on the business you are buying, it is cleared and relevant charges are lifted to ensure you are not liable for someone else’s debt. Business settlements can be a little different from a standard home loan settlement, so it is worth considering a settlement agent who is experienced in this field.
Contents insurance, building insurance, workers compensation, cybercrime insurance – the list goes on! Instead of having to call around for quotes and trying to figure out what you do and don’t need, engage an insurance broker who has access to multiple products and can explain what is really necessary for your business. When funding a commercial property, lenders will always ask for a copy of the certificate of currency and, on occasion, will ask for contents insurance details too.
When it comes to buying or setting up a practice, using a lender that understands your industry will make the process all that much easier – from helping connect you with all of the above experts and industry suppliers to helping you understand the loan structure, repayments and affordability. As a doctor, dentist or vet, your time is incredibly valuable, so using a specialist lender such as Credabl will take the stress out of the process with minimal paperwork and quick turnaround times.
The Credabl team is well-connected with many professional advisers who specialise in looking after doctors, dentists and vets in their field of work, so if you would like any recommendations, please don’t hesitate to reach out to your local consultant.
Check out our Private Practice Checklist to get a full picture of what’s required when setting up shop on your own and how you can get a head start on your journey.
Ali is a Finance Specialist at Credabl. Her organised and thorough approach and experience are highly valued by her clients. If you have any questions about buying or starting a practice, get in touch with Ali here.
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