If you’re a soon to graduate student or a practicing chiropractor searching for your next professional step in your career, this is an extremely important decision to make. If you’re dead set on being an associate, it’s critical you pick the right opportunity and not just go after the salary.
In this blog, I’ll discuss buy-on opportunities, how to evaluate them and how to determine if you’ll ever even get the chance to own part of the practice, even when the employer promises it’ll happen sometime in the future.
One of the biggest mistakes I see is when a chiropractor is promised a future opportunity to ‘buy-in’ to the practice and no details are given. So you know, for this to ever become a reality in your future, a buy-in clause should be part of your employment contract. In fact, it should be spelled out exactly what this means, how much and when it can be accomplished. It really has to be described in micro-detail…..or it’ll never happen.
Have you ever been promised a buy-in opportunity as an associate? Did it ever come to pass? How did it work out?
The right position for you should be so much more than a nebulous promise of future ownership percentage. And salary should be about in the mid-point of the reasons why you should accept a position. It’s important, sure, but there are many more important factors.
For instance, a few crucial questions for you to ask are: what are the opportunities for growth as a doctor? Is there a training program so that I can learn practice and clinic systems or am I supposed to just mimic what you do? Who will help me create effective treatment protocols? How do I learn about getting better patient outcomes? Is there potential to earn bonuses? How? Who pays my malpractice premium? Is there paid vacation? Do I have to do all your patient examinations? What about your x-rays? Will I be stuck in your rehab bay? When do I get to adjust patients? Do I have to do spinal screenings? Is your office an adjustment factory that doesn’t incorporate all the technological advances in our profession for even better patient results?
You might be thinking, well that’s a ton of questions to throw out at the doctor, right? Nope. These are hyper-critical questions and you need the answers to them well before you make a decision on accepting a position. And if you were offered a buy-in potential, there are many more questions you need to ask.
First, you want to know when you’ll be able to own a piece of the practice. You’ll want to know what the trigger is that makes it actually happen. It needs to be written down in your employment contract.
Next you need to understand how much it’ll cost you and how much of the practice you’ll own. If the owner is telling you that he’ll simply give you a percentage of the clinic for your sweat equity, great, but let’s get every detail written down. How much of the practice will you own and what will it take to get you the sweat equity ownership? What is the trigger? If the practice for some reason suffers a cash crunch, do you have to kick in some money to pay the bills? What happens if the clinic has a bad month…..do you still get paid?
You’ll also want to know how many personal expenses the owner runs through the practice, such as cars, gas, food and other supplies. All these expenses drop the profit and as an owner, that could drastically cut your distributions.
On that topic, if you are ever granted some ownership, what does that mean? Do you now receive a percentage of the profit? Who defines the term profit and how is it defined? Are their professionally audited financial statements so that you know the financial numbers are even accurate?
As you can see, evaluating an associate position with a promise of future ownership is a heck of a lot more complicated than you might think. And let’s face it, I talk to hundreds and hundreds of associate doctors, and most promises of ownership just never take place. Though don’t give up hope. There are some great opportunities for you, but you must evaluate a lot of them before deciding.
I almost forget, there is one type of ownership you might be promised that is fantastic in theory, and we launch a ton of clinics this way in HealthSource, but you have to be quite careful when evaluating. That opportunity is when the owner tells you that when you’re ready, they’ll build a practice for you to go and run and maybe own a few years after it’s built.
The big red flag here is that you must know what triggers the launch of this new clinic, how much will you own, what will it cost you, do you have to pay anything and how will you ever become the sole owner.
The answers to these questions must be put in your employment contract as well. When this is all described in great deal in your contract and you’re comfortable with the scenario, perhaps this is position for you. Your vision must align with the vision of the clinic owner, or this will just be a waste of a year or 2 for you, and life’s too short to waste 24-48 months when you could be building your dream practice instead of building someone else’s, right?
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