How to Build Your Professional Partnerships for Success in Practice
Owning a business is an act of courage. Every day, you make decisions that will shape the future of your company. During this journey, you will also rely on key partners to help steer you away from pit falls, while enabling you to foster sustainable growth.
As a practice owner, you are wearing many hats such as CEO, marketer, sales manager, and likely clinician as well. The following article will focus on three key partnerships that every practice owner should have: their lawyer, banker and accountant.
How Your Key Partners Can Help You Practice Better
The first partner discussed is your lawyer. A good lawyer will help you not only set up your professional corporation, but can also advise you whether other legal entities such as investment holding companies (HoldCo) and various forms of trusts are right for you.
Furthermore, your lawyer can provide guidance with partnership agreements and structures. As you grow your practice, it is common to join your talents with other practitioners. This not only provides added expertise to your clinic, but also allows you to share managerial responsibilities of the practice with others.
Lastly, your lawyer can be a key partner in your personal financial plan by drafting your will. A common mistake young professionals make is assuming if you are not married, or don’t have kids, or simply may not have accumulated much wealth yet, that a will is an unnecessary exercise. This couldn’t be further from the truth! A will allows your affairs to be properly divested if something happened to you. More importantly, your loved ones will be tasked with sorting out your Estate, and a professionally written will, will make the process for your loved ones much less arduous.
The next partnership you will need to choose wisely is your banker. A good banker will not only provide you financing, but can also share valuable insights from your industry such as average revenues, costs and profits for your practice.
Your banker can provide tools to increase your cash flow cycles. Said differently, receiving and sending payments more rapidly and securely. Think electronic transfers versus cheques. Set up payroll services, group savings options for your employees, and various other financial products that will add value to your practice.
Last and certainly not least, is your accountant. They will be responsible for preparing your financial statements (Income Statements, Balances sheets, etc). They can identify quickly unusual cash flows, excessive costs and recommend prudent compensation plans for you and your clinicians.
Your accountant will also be a key resource for tax planning, not only for your practice, but for your personal income as well. A sound tax planning strategy will keep more of your hard earned fees in your business and in your pocket.
Selecting the Right Partners
You will quickly realize that in your community several lawyers, bankers and accountants will be practicing. They will all have varying specializations and experience. Therefore, how should you go about selecting the right partner for your practice, and ultimately you?
Here is a short list of questions to get you started:
- Do they understand your business, your industry?
- Is a significant portion of their work done in your industry?
- Are you aligned in your expectations, will you grow together?
- Have they challenged your thinking and brought new ideas to the table?
- Is there clarity in how they are compensated and a clear value proposition for the cost of their services?
Furthermore, you will be working with these partners several times a year. Ensure you are comfortable with your partnerships and communication flows easily between all parties.
Associates Must Think Like Business Owners Too
As an associate, you are not yet the key decision maker in your practice, but do not make the mistake of thinking this article doesn’t apply to you.
A day may come when you will be asked to succeed your current owner. Alternatively, you may have an opportunity to start your own practice. Regardless of what lies ahead, being business savvy and prepared will put you in a position to make informed decisions, and able to take advantage of the opportunity.
Unfortunately, in my professional life as a banker, I see all too often the “associate caught off guard” heartbreak. A young professional gets the opportunity of a lifetime to finally jump in to the owner’s seat. Alas, the endeavour becomes overwhelming, as the associate has never discussed “financials”, “legal contracts” or “debt structures”. The problem is further exacerbated by the fact our associate was not financially prepared to buy a business. In the end, too much happens too quickly, and the opportunity passes them by.
A wise person once said that preparation is the key to success, and they were absolutely right.
Final Thoughts on Partnerships
Choose your allies wisely and they will elevate your success. Don’t settle for the first available option and remember that price is a function of value. Ask yourself, what you are sacrificing if you choose the least expensive option?
Do not wait until you are becoming a practice owner to start forming your relationships. Begin early and get great guidance along the way, and your dreams of owning a thriving clinic will become reality.
Chris Mahlberg is the Vice President of Business Banking for BMO Financial Group in South Western Ontario. Over the years, Chris has been passionate about delivering sound financial support and business advice to entrepreneurs and new business owners launching their careers, including healthcare practitioners. Chris will be a presenting on this and many other key financial management concepts at Practicality's upcoming Business Essentials for the New Healthcare Practitioner seminar in Toronto on November 16th & 17th, 2019.