iv THE ADA PRACTICAL GUIDE TO VALUING A PRACTICE Chapter 5: Buying a Practice versus Starting a Practice .............................................................65 Advantages and Disadvantages of Buying a Practice .........................................................................................65 What a Seller Should know .........................................................................................................................................67 What a Buyer Should know ........................................................................................................................................68 Case Studies: Starting versus Buying ......................................................................................................................70 Case Study I: Starting a Practice...............................................................................................................................70 Case Study II: Buying an Existing Practice .............................................................................................................72 Associate to Owner ......................................................................................................................................................75 Chapter 6: Preparing for the Sale and Using Advisors ..................................................................79 Marketing the Practice ................................................................................................................................................79 Finding a Buyer ............................................................................................................................................................. 80 Showing the Practice ...................................................................................................................................................81 HIPAA Implications .......................................................................................................................................................82 Buyer Qualifications .....................................................................................................................................................82 Negotiations ...................................................................................................................................................................82 Advisors ...........................................................................................................................................................................83 Selling All versus Part of a Practice ..........................................................................................................................87 Chapter 7: Legal and Tax Issues ......................................................................................................................91 Legal Documents ..........................................................................................................................................................92 Tax Implications.............................................................................................................................................................93 Sales Contract Provisions ...........................................................................................................................................95 Installment Sales ...........................................................................................................................................................95 Other Sales Documents ..............................................................................................................................................95 Other Provisions ............................................................................................................................................................96 Conclusion ....................................................................................................................................................................100 Appendices ..................................................................................................................................................................103 Appendix A: Sample Letters ....................................................................................................................................103 Appendix B: Sample Sales Agreement ..................................................................................................................105 Additional Resources .................................................................................................................................................109