Many people don’t understand the difference between a buy-in and a buy-out. This leads to serious confusion. Typically, a selling Doctor will offer to let a young buy into the practice, never realizing that this means giving up some control of the practice. Many times the senior Doctor has never analyzed the practice and doesn’t understand exactly what will happen when the new doctor is on board. Once the financial ramifications become apparent, the deal will fall apart quickly.
There is a distinct set of steps that must be followed in the creation of a buy-in opportunity. Given the complexity of the steps a buyer must analyze the quality of the preparation that the seller is bringing to the table when structuring a buy-in. At Veritas Transition Group we can help young Doctors analyze the opportunity and we can help senior Doctors develop an opportunity that is attractive to prospective partners and stable in the future.
A buy-out situation occurs when a young Doctor is working in the practice and may or may not own a portion of the practice already. A buy-out is the purchase of the practice by the new Doctor with the senior Doctor possibly staying on as an associate. VTG has led many senior doctors through this role-reversal approach.