8/6/2019 EXPLORING THE PATH OF PRIVATE PRACTICE M EET YOUR MEDICAL - - PDF document

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EXPLORING THE PATH OF PRIVATE PRACTICE MEET YOUR MEDICAL PRACTICE PARTNERS

ALEXANDRA KOHRS BANK OF AMERICA PRACTICE SOLUTIONS JEREMY BURROUGHS CARR HEALTHCARE REALTY

PRACTICE MANAGEMENT TRACK

LECTURE 1 : EXPLORING THE PATH OF PRIVATE PRACTICE – 10:15AM-11:45AM LECTURE 2 : GUIDE TO TRANSITIONING STRATEGIES – 1:15PM – 2:45PM MEET THE EXPERTS BREAKFAST & LEARN: 7:45AM BOOMER ROOM

 Q & A SETTING Don’t miss out on your opportunity to ask the real estate and banking experts any

• question. We will start with most common questions and provide an open platform

for a panel discussion. Come have breakfast with us on try to stump the experts!

PRACTICE OWNERSHIP TIMELINE

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Positives

• Build a practice the way you want it built
• Normally a fast growing company and

developing area (less/no competition)

• New equipment and fixtures
• Hire and train your own staff using your

business and service philosophies

• Patient selection matches your personality

strengths and weaknesses

Negatives

• Stress of building, managing and running

an office

• No patient base
• You have to deal with growing pains, i.e.

staff, billing, benefits, pay plans, scheduling, to name a few,

• You will have to continue your current

employment until the practice can support itself

SHOULD I START A PRACTICE FROM SCRATCH? WHAT DOES THE PROCESS LOOK LIKE? START UPS

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7

Doctor

Banker Business Office Equipment Maintenance Technology Rep HR Consultant Lawyer Marketing Website Design Investment Equipment Specialist Medical Specific Accountant Space Finder Contractor Insurance

DO YOU HAVE YOUR START UP TEAM?

Positives

• CASH FLOW!
• Have a patient based already established
• Staff understands their roles and are

trained

• The practice has been marketed and

maintains a consistent flow of new patients

• Established insurance relationships

Negatives

• You are buying someone else’s philosophy,

flow, treatment planning, staff training, systems, etc.

• Possible loss of patients in transition
• Existing staff salary is already established
• Staff may resent new owner and leave the

practice

• The equipment and office may be old and

worn which will require additional economic investment

SHOULD I BUY AN ESTABLISHED PRACTICE?

Practice Specialty Cash Flow Revenue Trend Expenses

• Hiring/firing employees
• Staff wage costs
• Adjusted overhead costs

Last Cosmetic Update Technology

• Digital X-Ray
• Computer systems

WHAT DETERMINES THE PRICE?

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WHAT DOES THE PROCESS LOOK LIKE? ACQUISITIONS

11

Doctor

Banker Lawyer Marketing Website Design Investment Equipment Specialist Medical Specific Accountant Space Finder Practice Broker Insurance

DO YOU HAVE YOUR ACQUISITION TEAM?

12

Doctor

Banker Lawyer Marketing Website Design Investment Equipment Specialist Medical Specific Accountant Space Finder Contractor Insurance

DO YOU HAVE YOUR EXPANSION TEAM?

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• Credit worthiness
• Capital (liquidity)
• Character (financial position)
• Capacity (cash flow)
• Collateral (business)

THE FINANCIAL PIECE

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• Trade lines and accounts:
• Public record and derogatory information :
• Hard vs. soft inquiries
• Contact information, employment history, aliases & notes

Getting your credit in order - Your Credit Bureau file includes How are Credit Scores calculated? Payment History Credit Useage Inquries Account Types Age of Accounts

15% 31% 14 10 30%

STUDENT LOANS HOME AUTOMOBILE CREDIT CARDS REVOLVING LINES OF CREDIT

#1 DEBT QUESTION- WHAT IS GOOD AND BAD DEBT?

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PURCHASE RESPONSIBLY

• keep short and

long term plans in mind Do you KNOW EXACTLY where you will purchase or start a practice? Does it MAKE MORE SENSE to purchase or rent?

BUYING VS RENTING BEFORE A PRACTICE?

Specialty Lenders Local Banks Seller Financing Term Rates Fees Pre-Payment

Down Payments Approval Flexibility Personal Guarantees Residential Guarantees Approval Time Life Insurance Disability Insurance

Malpractice Insurance

KNOW THE LENDING OPTIONS

SBA

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• Develop your “Why”…Why am I doing what I’m about to do?
• The “Why” becomes your driving force behind your decision
• Create an experienced TEAM
• Successful Opening, Speed & Savings (Time and Money)
• Have a plan
• Know exactly what you want to do
• Commit to the plan
• Execute the plan with your TEAM
• Develop a project list
• Organize and prioritize your “To Do” items

 Identified issues that are coming (ahead of time)  Reduces stresses – by being proactive vs. reactive

• Don’t take shortcuts
• It’s never too early to start looking at your options
• Work on Personal Situation if Need be
• Find the right space/ practice takes time

SUCCESS TIPS

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• Not becoming a practice owner sooner
• Location
• Poor visibility and signage
• Trying to negotiate your own lease terms
• Poor demographics
• Financial/Budgeting mismanagement
• Practice Homework
• Lack of marketing
• Not hiring the right staff
• Non Compete concerns
• NOT HAVING THE RIGHT TEAM IN PLACE

MOST COMMON PITFALLS

35428

LECTURE 2 : GUIDE TO TRANSITIONING STRATEGIES 1:15PM – 2:45PM MEET THE EXPERTS BREAKFAST & LEARN: FRIDAY, 7:45AM BOOMER ROOM Q & A SETTING

Come have breakfast with us on try to stump the experts!

Bank of America, N.A. provides information from speaker topics for your discussion and review purposes only. Please consult your tax advisor, as neither Bank of America, its affiliates, nor their employees provide legal, accounting and tax advice. AR: AR9SRJ9D

The Path of Private Practice Session 1

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Types of Real Estate Transactions

• Start-Ups
• Lease Renewals
• Expansions
• Relocations
• Additional Offices
• Purchases (Land/Building)
• Practice Transitions

The Importance of Real Estate to Your Practice

Second-Highest Expense

• Your office is typically the second-

highest expense after payroll

• After years of lease escalations,

most offices are significantly

• verpaying for their lease
• You typically get only one chance

every 5-10 years to reduce this

• expense. Don’t Miss the critical
• pportunity!

How does real estate impact your practice?

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Commercial Property types

• Office (condo/ stand alone)
• Retail
• MOB
• Hospital Campus
• Land/New Construction

Pros and Cons

• Signage
• Exposure
• Access
• Parking
• Synergy of Other Tenants
• Costs
• Natural light/windows
• Amenities

Understand Your Lease Type

• Full Service, Modified Gross, or NNN
• Base Year vs. Expense Stop
• What is a CAM?
• Utilities and Janitorial Included?
• Office park fees

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Everything is Negotiable (almost…)

• Lease rate and annual escalations
• Build out period
• Improvement allowance
• Free rent
• Signage, Parking, Exclusivity, etc.

Purchase vs. Lease

• Is it always better to own?
• How does it affect your cash

flow?

• Short term vs. long term
• Principal pay-down and equity
• Tax implications
• Exit strategy

Leverage Your Opportunity Through Representation

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Negotiation Strategy

Appropriate timeframe

• New Lease or Purchase: 9-12

months

• Renewal: 12 months
• Land Purchase: 18-24 months
• Practice acquisition: 30-60 days

Posture is mandatory

• Understand what is really at stake
• Renewal Scenario

Negotiation Strategy (Cont.) Negotiation Strategy

(Cont.)

Whoever has the most viable

• ptions wins
• If the landlord believes you can’t

move or aren’t willing to move…

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Key Players and Their Roles

• Real Estate Broker
• Lender
• Attorney
• CPA
• Architect
• Equipment and Technology
• Contractor

Closing

• Real estate dramatically impacts

your practice

• Understand the market and your top
• ptions
• Maximize your opportunity through

representation

• Create a team of trusted

professionals

Jeremy Burroughs

405-410-8923 jeremy.burroughs@carr .us