How to Setup an Optimal Medical Partnership for All Parties Involved
When done correctly, a medical partnership can be a fruitful and mutually beneficial endeavor for everyone involved. However, if things go awry due to poor planning, implementation and upkeep, the situation can end in a lawsuit. As members of the professional Holbrook & Manter’s Business Services and Solutions Team, we aim to keep you out of bad financial situations and in good graces with your business partners.
We have established the following guidelines for you to consult before establishing and implementing your agreement.
Is your medical practice ready for a partnership?
First thing’s first – is your private medical practice prepared to team up with other physicians, professionals and companies in the industry? Are you secure enough in your finances to take this step? Before you create these professional connections, consider the financial impact the new member (or members) may cost the company initially. How much additional revenue will each new piece bring in? Will there be a costly learning curve or ramp up period? Can your current team handle the temporary fiscal strain? A partnership is an investment and, to get to the pay off, you must be able to stay in the short-term game.
Once you’ve decided that your company has the capabilities to fend for itself until the new associate gets up to speed, it’s time to figure out who is the best pick for the team. Who is aligned with your corporate philosophies, but has also established themselves as an independently viable candidate? Be transparent about the benefits of partnering with your brand when interviewing individuals. Cover the basic contractual obligations, but also highlight the added value of partnering with you and instill the idea of personal career growth.
What should the shareholder agreement entail?
When drafting this document, you’ll want to ensure that it is an equal opportunity for both your medical practice and the potential partner. Before the contract is signed, establish the following ground rules and regulations for the buy-sell agreement:
- Circumstances for buying & selling shares
- The price of each share
- Number of shares available for purchase
- What is the investment value of each share
- What are the incentives for investing
How should you prepare for potential future change?
Growth can happen in a number of different ways, so it’s important to be ready for it. The same is true for a possible decline in business. For a partnership to move forward, you have to be prepared for both circumstances. Consider the following situations and possibilities to include and cover in the agreement:
- Purchase structure and options for additional partners
- A third party buyout
- Establishing senior & junior partnership
- A closeout meeting for a partner who sells all shares & opts out of the agreement to end things on a high note
If you take into account the above-mentioned steps when considering your medical partnership plan, your company and its partners should find great mutual growth and benefit from the working relationship. For more information regarding buy/sell agreements, contact H&M’s Business Services and Solutions Team in Columbus, Ohio today!