GP practices

[MrJuice]

Anyone bought one? How would you value one? What key things to look out for?

[anothernameitist]

Is that an up and running place or just the property?

[MrJuice]

Up and running with a patient list.

Could be for sale for a number of reasons including: small practice, single GP who is struggling/retiring, could be a practice in a rough area that Dr Tarquin is not interested in working in and therefore the practice is not meeting its targets. Stuff like that

[walm]

MrJuice said:

Up and running with a patient list.

Could be for sale for a number of reasons including: small practice, single GP who is struggling/retiring, could be a practice in a rough area that Dr Tarquin is not interested in working in and therefore the practice is not meeting its targets. Stuff like that

So you want to buy a business that is about to lose its only revenue generator.
Sounds like a plan!

[walm]

Not being facetious for a moment my GP buddies seem to "buy-in" on the grounds of the property value rather than their own earning potential from patients.

[MrJuice]

There are lots of ways GP practices make money. Some do it by rising property prices (I'm thinking of the huge practice that was on Pagoda Avenue, Richmond and now relocated), others are well run and meet all their government targets and so get a lot of marginal revenue, others do private stuff, others do other things.

[MrJuice]

walm said:

So you want to buy a business that is about to lose its only revenue generator.
Sounds like a plan!

which generator is that? If a GP retires, you employ someone to replace them. I thought that would be obvious

[walm]

MrJuice said:

walm said:

So you want to buy a business that is about to lose its only revenue generator.
Sounds like a plan!

which generator is that? If a GP retires, you employ someone to replace them. I thought that would be obvious

With a single GP practice the replacement will know that any value created by him in meeting targets etc... is done by HIM and hence demand the economic benefit of doing so goes to him not you.
Which puts you back at buying the property not the business.
I thought that would be obvious.

I guess you might start running a dispensary but that's a separate valuation question from buying the original practice assuming it doesn't already have one.

[MrJuice]

walm said:

With a single GP practice the replacement will know that any value created by him in meeting targets etc... is done by HIM and hence demand the economic benefit of doing so goes to him not you.
Which puts you back at buying the property not the business.
I thought that would be obvious.

I guess you might start running a dispensary but that's a separate valuation question from buying the original practice assuming it doesn't already have one.

By replacement, I assume you mean a replacement GP to take over the work of a retiring GP. If so, your assumption is quite far off the mark. I am talking about buying a practice. The new GP is just another employee of the practice. Whilst you might incentivise them to meet targets, you wouldn't give in to demands of economic benefits. In any case I imagine most salaried GPs are smart enough not to make such demands.

I understand the basics of buying a business, despite never buying one. You don't get it for free. Someone has created some value and you pay them for that. My question was how do you value that?

[zuby84]

I bought one last month. Feel free to pm me

[Rollin]

Are you allowed to buy the business or are you just buying the building?
I know that only General Dental Council registrants can own dental practices.