Which insurer and employee-assistance relationships keep a counselling practice busy?
Ask for referrals broken down by source, including insurers, employee-assistance providers, physicians and word of mouth. Then ask who holds each relationship and whether it is under a contract or an informal arrangement. A practice leaning on a single source, or on the owner’s personal ties, carries more risk.
Request a summary of where new clients came from over a stretch of recent periods, by source. Compare the sources with revenue, since some referral streams bring heavier caseloads or better-paying work. Look for changes. A source that has grown or shrunk sharply needs an explanation.
Then ask about the relationships themselves. Is the practice listed with an insurer or provider network under its own name or under an individual therapist? Are there written agreements, and do they allow a change of ownership? Do not assume that they carry over. Ask the owner whether the provider has been told about the sale, and whether anyone has voiced concern.
Finally, speak with the people behind the relationships, with the seller’s permission. Ask the owner to introduce you. Your lawyer can read any agreements for you. Also ask what keeps those partners satisfied, such as response times, reporting and the quality of care. Retaining staff who deliver that matters as much as the contract. Do not treat a list of logos or listings as proof of volume. Ask for referral counts and revenue by source, and confirm them against the financial statements your accountant reviews, so the picture holds together.
Key takeaways
- Get referrals by source and compare them with revenue.
- Find out whether each relationship belongs to the practice or to an individual.
- Ask if agreements allow a change of ownership and speak to the partners.
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Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 02Business Development Bank of CanadaGovernmentWhat are the steps to buying a business?
- 03Business Development Bank of CanadaGovernmentAfter buying a business, what is the next step?
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