**The Struggling Branch Practice**

Over the years we have analyzed over 15 practices that we consider to be a, ‘struggling branch practice’. We have noticed a common theme amongst these practices.

1) Almost always the owner has had another good to excellent practice (in terms of turnover) not far away (within 20-30 mins drive).

2) The owner bought the struggling branch practice or started it AFTER the successful practice

3) The reason for sale is almost always listed as “wants to dedicate time to other practice”

4) Practice has always been presented as one that has significant opportunity. You can do this and that etc etc (usually expand hours because it’s operating only minimal days).

The thing we want to establish is WHY someone with a great practice then has a struggling one.

Honestly, what we’ve concluded is that they never understood properly, what makes a practice successful. For one reason or another, they landed on a successful practice and just thought their ability and skills will be easily replicated elsewhere and so they just bought (a small practice) or started any practice thinking it would be easy to get it up and running. They have then dedicated significant time and resources (including their own clinical time in a lot of cases), to get this practice going. Remember, the potential payoff is huge for them. They have one very profitable practice and if the second one can get there, all of a sudden they have two good sources of revenue.

But it’s failed and they have then decided to sell the second practice.

What’s interesting is they had lots of advantages. The ability to share staff reduces cost, bulk ordering over 2+ practices etc.

A new owner won’t have these luxuries to save cost either.

As a departing warning, if a practice is being sold to you and only open 2-3 days a week. This may be seen as an opportunity by some. In most (but not all) cases, it’s actually open that much because that’s all the demand dictates. Not because the owner (illogically) decided to close and forego revenue. That just doesn’t make any sense.

Be warned, post-Covid, many of these practices are likely to flood the market. The biggest mistake you can make is spending a large sum purchasing a practice like this. The big issue is you will likely earn less than you would as an associate because some of your earnings will go back into the business expenses and repayments and this may continue for a very long time. Infact, the practice May never become profitable.