Ever consider acquiring an existing Acupuncture practice rather than starting from scratch, or jumping right into a practice rather than taking years to build one, then this guide is for you! In this article, we will discuss the basics of researching and purchasing an established Acupuncture business. Read on to learn more about this process.
Purchasing an established Acupuncture practice offers numerous benefits, including access to an existing patient base, trained staff, and hopefully a well-established reputation. However, it’s essential to carefully and thoroughly enter into this opportunity to ensure a successful transition. In this guide, we will explore the key considerations one should know when buying an acupuncture practice.
We have interviewed Joe Bonacci L.Ac., CFMP, Licensed Acupuncturist, Certified Functional Medicine Practitioner, and owner of All Seasons Acupuncture and Wellness Center based out of Shelby, North Carolina to walk us through this process.
He began looking for an Acupuncture practice to purchase because his family had decided that they would like to relocate to an area with a lower cost of living than where they were located [New Jersey], so they could have more quality time outside of work for their family, and did not want to have to start from scratch to build a new practice. He shares with us a few crucial steps to take into consideration when purchasing an Acupuncture practice.
Research the Market and Location
Before diving into the process of actually acquiring an Acupuncture practice, it is important to conduct thorough market research to gain insights into the local demand, competition, and potential for growth in the areas you are hoping to buy into. Evaluating the demographic characteristics of the area, including population size, age groups, and income levels is important here.
Additionally, considering the number of existing acupuncture practices and their reputation within the community can set you up for a realistic view of the new market. Joe Bonacci wanted a strategic move and decided he was looking mainly for a growing market with less competition as he tried to “focus efforts as an owner on clinical practice with less focus on having to market myself.”
Some resources to find practices for sale can be upon the classifies for acupuncture school websites, or lawyers website that deal with such transactions. Speaking with colleagues or joining professional groups may also be a great resource.
Get a Feel of the Seller
When you have narrowed your search down to a few practices you are interested in potentially, it is best to know who you are buying the business from.
Get to know the practitioner selling the practice— are they organized, do they have a good relationship with their patients, what are their systems in place for accepting payment, or charting?
“Within a week of contacting the practice owner, my family and I traveled to her location to meet her and experience the area to make sure it was the right fit,” shares Bonacci. “The practice owner happened to practice trigger point needling, which was also a specialty of my style of Acupuncture, and it was evident she ran a very professional practice start-to-finish that had been established for 6 years with a great reputation, a well-trained staff, and a beautiful facility that was located in the center of town near other major medical practices. This made it easy for me to put a deposit on the practice to take it off the market, as there were competing buyers at the time. I then started the process of acquiring my license to practice in North Carolina while we also began business negotiations,” he continued.
Financial Due Diligence, and Legal Support
Financial due diligence is a critical step in the acquisition process. Spending time reviewing the practice’s financial records, including income statements, balance sheets, and tax returns, to assess its financial health and sustainability may be tedious, but essential. You can also evaluate the practice’s revenue, expenses, and profitability over the last few years to get a projection for the future. It is also essential to examine any outstanding debts or liabilities that may impact the business’s future performance and if these debts will move over with you when purchasing the business.
Evaluate Legal Aspects and Contracts
Acquiring an acupuncture practice involves various legal considerations. Consult with a healthcare-focused attorney experienced in practice acquisitions to review all contracts, including leases, partnerships, and vendor agreements. You may need to identify any restrictive covenants that may limit your ability to operate the practice in a certain way.
Additionally, explore the possibility of assuming any existing malpractice insurance, or make sure to research any new malpractice needed before beginning to work.
It is also important to find a lawyer informed in local business requirements transactions to help smooth the transition and answer any legal questions. Bonacci informed us that he “contacted a lawyer in North Carolina ( the state in which the desired new clinic was located) who was well versed in North Carolina Law, he was able to set up my Articles of Incorporation for my new S-Corp and then helped to negotiate the terms of the business acquisition.”
Bonacci continued, “The most challenging part of the process was the out-of-state aspect of the transfer. I did not have a residential address in North Carolina when I began negotiations, which created challenges in forming a new business account at a bank and establishing the Articles of Incorporation, all of which had to be updated at key moments during the acquisition of the business to create a smooth transfer. The negotiation for the business acquisition also took more time and cost than I expected, but it was well worth it to make sure all aspects of the contract were to the satisfaction of both parties.”
Licensing and Regulatory Compliance
If when acquiring this business you are also going to be hiring practitioners, or other employees, ensure that the practice and its practitioners are fully licensed and comply with all local and state regulations. Verify that the acupuncturists hold valid licenses and certifications and check if the practice has faced any disciplinary actions or malpractice claims in the past. Non-compliance with regulations can lead to severe consequences and damage your practice’s reputation.
It is also important to obtain a new state medical license if you are moving out of state or follow any state-specific guidelines to practice Acupuncture. The NCCAOM website, as well as the specific states’ medical board website, can help here.
Assess the Facility and Equipment
Visiting the practice in person to assess the facility and its equipment should be done before any agreements are made. This step will ensure that the clinic is in good condition and meets all safety and health standards. During this time you can also evaluate the condition and functionality of acupuncture tables, computers, and other treatment tools that may be sold with the business. Upgrading outdated equipment may be necessary to provide optimal patient care and maintain the quality of care you hope to offer.
Understand the Patient Base and Flow of the Business
A significant advantage of purchasing an existing practice is inheriting an established patient base. However, it is important to understand the demographics of these patients and their treatment preferences. You should consider the age, health conditions commonly treated, and other relevant factors so you can continue to provide optimal care. Understanding the existing patient base will help you tailor your services to meet their needs while also identifying opportunities to expand your clientele.
It is also important to understand the existing flow of the business and if this is something you are willing to work with or if it needs to be changed to fit your unique style of care. How many patients a week? How many a year? How many new patients? How many days is the practice currently open? How long are the sessions? And does the current work style vibe with your own, or will you be needing to inform patients and staff about logistical changes
Meet/Train/Learn from the Staff
The staff is integral to the practice’s success, as they contribute to patient satisfaction and overall clinic management. Taking the time to meet and interview the existing staff members, including office staff, and other practitioners, will set you up for success and allow a stronger working community. Understanding their roles and responsibilities, as well as their challenges and concerns will allow a greater level of job satisfaction during and after the transition. If you plan to retain them after the acquisition, address any concerns they may have to ensure a smooth transition. This is also true for patients.
Reputation, Brand, and Marketing Strategy
The reputation of the acupuncture practice plays a crucial role in its success. To better understand this you can look into the practice’s online reviews, testimonials, and social media presence to gauge its public perception. A strong brand value can significantly impact patient retention and attract new clients. If the practice has faced any negative publicity or controversies, carefully assess its potential impact on the business.
This is a good time to brainstorm marketing efforts you can put into place to inform the local community about your new business. Contacting the office of commerce, local neighborhood organizations, and the local newspaper may be beneficial resources.
During this stage, you and the seller can begin to develop a comprehensive transition plan to ensure a hopefully seamless handover. Communication with patients, staff, and suppliers about the change in ownership, and timeline is important to be transparent.
Bonacci informed us that he shadowed the previous owner for one week to help ease the quick turnover of the practice. “We had a staff meeting, for the two support staff and one massage therapist that rent from the office, in the week before I took, so that we all had a chance to get to know each other. At that time, I assured everyone that their role would remain in the company as I planned to keep the Acupuncture practice operating the same way as it was before.”
He made sure the previous owner was also in the office for one more week to make sure the office was running smoothly and patients had the chance to say their goodbyes. They also agreed to have the previous owner able to be contacted remotely for the final 4 weeks of the 6 week transition period.
During this stage, it can be a beneficial time to implement a marketing strategy to attract new patients and retain existing ones during the transition period. Consider offering introductory promotions or loyalty programs to incentivize patient retention.
Acquiring an acupuncture practice can be a rewarding endeavor if approached with careful planning and due diligence. Understanding the market, financials, patient base, reputation, and legal aspects are crucial to making a well-informed decision. By following the steps outlined in this guide, you can increase the likelihood of a successful transition and establish yourself as a respected provider in your new community. Remember, thorough research and preparation are key to a smooth and prosperous transition.
The ultimate goal here, for many, is increased joy and prosperity. So make sure you take the time to ask yourself–what is it that you truly want and how can you take steps to get closer to your goals? Moving from a place of truth and sincerity will hopefully ensure an easy transition.