Almost all of the information provided under "Business Law", "Business Transactions", "Entity Formation", "Real Estate" and "Commercial Leases", also applies to professional practices. Yet there are many unique issues that apply to all professional practices as a group and also individually to each of them. Professionals are subject to licensing and various regulations pertaining to patient/client treatment, methods used, premise requirement, ethics, conflicts, continuing education and so forth. Other issues to consider in opening, operating or selling a professional practice are:
We have had experience in handling the sale transaction of various types of professional practices including dentist, but especially veterinarian transactions. Our relationship with these various professionals has allowed us to handle a large number of transactions over the last 17 years.
Patient Relationship. Each profession has a different type of interaction with patients which can affect various aspects of the practice. For example, a large animal practice is very different than a small animal practice. A veterinarian that travels to a farm to treat horses or cattle has a much different life style than one who works out of a clinic.
Tenant Improvements. Although most professionals must purchase specialized medical equipment, some professions, such as veterinarians, must install in their facility various animal related tenant improvements that can make the site less inviting to different types of commercial businesses; this creates an incentive for veterinarians to own their own building and re-sell to another veterinarian.
Financing. Both veterinarians and dentists have experienced favorable financing for the purchase of their professional practices, often being able to borrow 100% of the purchase price plus working capital on very reasonable terms. Real estate loans can usually be obtained but normally not for the full purchase price. Since the loans are often at least 10 years, the lender requires either ownership of the facility or a lease with a term and/or option extending this period to the 10 year term.
The following items should be considered before the purchase of a veterinary practice:
· Obtaining a qualified appraisal, which your lender will also require.
· Compare terms from at least two lenders, preferably a lender that specializes in Veterinarians.
· Whether the equipment is sufficient.
· Consider the future cost, if you are going to perform different or additional treatments requiring new equipment.
· Is the equipment in good shape or will it require repair or replacing in the near future.
· Does the seller have a non-compete agreement from his seller, which you can assume to keep such prior seller from competing.
· If you are buying the building, a whole host of issues apply such as:
a) Condition of Building
b) Special built in equipment such as forced oxygen and whether it is properly permitted
c) Zoning. It is very common to be in a zone that requires a conditional use permit - make sure you read it and determine if it covers your practice and can be extended when it expires.
· If you are leasing, besides the term, square foot cost, common area expenses, and options to extend, there are many legal issues to be reviewed.
· Have large enough and long enough non-compete provisions to protect the practice from Seller's future competition.