There are a number of things to look out for when buying a practice.  If you're not careful, you could end up with a bag of tricks.  Here are some of the top pitfalls to avoid when buying a chiropractic practice:
 
1. Not understanding the numbers. Be sure and know what normal chiropratic expenses are and what may be extraneous.

2.  Assume the staff are all on board and will be staying with the practice. Know who the staff is and what their relationship is with the seller, and how good they are...
 
3.  Embezzlement - hire an accountant to look for any irregularities. Statistics show there are a high number of practices that are embezzled by their employees each year. Are courtesy credits high?  How about patient refunds?   

4.  Does the procedures the selling doctor perform match the procedures that you do?   Make sure a large amount of the procedures you don't do are not currently being performed by the seller.  You don't want to have an immediate drop in production right from the start.

5. Understand the lease. How many years are there left on the lease? Are there more options to extend? Is there a loan form the landlord build into the lease? Which expenses are covered in the lease? Is it triple new or a gross lease?
 
These are only a few of the pitfalls to make sure you don't get tricked. Spend as much time in due diligence as you need and bring on experts to help you along the journey.  

-Rod Johnston, MBA. CMA

​You have had a great career and now you are thinking about selling and transitioning out of your Chiropractic practice. You would like to get the best value for your practice. Do you just walk away?  Being prepared can not only help you get the best price, it will help ensure a smooth transition. 
 
Here are a few things you can do to help prepare for your Chiropractic practice transition:

1. Know your financial situation - Meet with your financial advisor, CPA, or whoever gives you financial advice to get a good picture of where you are with your savings and investments.

2. Get a practice valuation - A practice valuation will help you see how much equity you have in your practice.  Additionally, a CPA can help you figure out what the taxes and net proceeds from your sale will be.

3. Update Technology - Buyer’s like to see new technology in a practice.

4. Cosmetic updates - Have you updated the interior with paint and carpet in the last 20 years?  If not, it’s time.  Buyers like a practice with a fresh feel to it.  A 1970’s feel was good in the 1970’s.

5. Review Accounts Receivable Aging - Collect any past due accounts, send to collections or write them off.  Also, review credits to either pay back to the patient or send unclaimed property to the State.

6. Review Staffing - Are you over or understaffed?  Adjust accordingly.

7. Clean up your financial statements - Make sure the expenses you’re running through your Chiropractic practice financial are related to your practice, or at least identifiable as an adjustment. 

8. Consider ramping up production - If you are not sure how, then hire a Chiropractic consultant.  Ramping up your practice when you’re 3 or more years out will pay dividends on the sales price.

9. Review your fees - Do you have the lowest fees in the area?  Consider a fee increase to catch up.

10. Harvest your Equity - Maybe you are a few years away from retirement, but tired of being an owner.  You should consider selling now, take the equity out of your Chiropractic practice and work back as a Chiropractic associate.