Three practical rules for setting a buy-in price

Written by Reed Tinsley | September 19, 2005

How to Determine the Right Buy-In Price for Your Practice: Key Considerations

Determining the right buy-in price is an inexact science. But applying one consultant’s “acid test” can help you come up with the right price given your individual circumstances. This includes:

1. Net compensation should be higher during the first year of the buy-in than during the partner' last year as an employee

2. The new partner should recoup his or her investment within five years

3. The buy-in price should be less than the cost of starting or buying your own practice

This nugget was adapted from 101 Practical Tips to Enhance Your Practice, from Advisory Publications, a division of HCPro, Inc. To order click here or call our Customer Service Department at 800/650-6787 for more information.

About the Author

Reed Tinsley CPA

This article is written by Reed Tinsley, a Houston, TX-based CPA with over 30 years of experience advising physicians and medical practices across Texas and the United States. Reed holds certifications as a Certified Valuation Analyst (CVA), Certified Healthcare Business Consultant (CHBC), and Certified Financial Planner (CFP), specializing exclusively in the healthcare sector. He is a published author, nationally recognized speaker, and trusted advisor to physicians on accounting & tax, practice management, and financial planning. Schedule a Free Consultation.

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