​PRESS RELEASE
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KENMORE, WA, September 26, 2019 – OMNI Practice Group, a provider of dental, veterinary, chiropractic and medical practice transitions, sales, valuations, consulting and real estate services, today announced that Joseph Coury has been named as Chief Executive Officer.
 
Mr. Coury brings more than a decade of banking experience to his new role as CEO. Before joining OMNI, Mr. Coury was Senior Vice President, Veterinary Division, at California Bank of Commerce where he provided start-up, construction and practice transition financing and other banking services to over 1,000 veterinarian clients throughout the United States.
 
“When we looked at where our company was going, we recognized the need for an individual dedicated to providing the leadership, organization and business development necessary to achieve our goals,” said OMNI Founder and Principal, Rodney Johnston. “Our search brought us to a known person who had the exact qualities we were looking for. We are excited to have Joe on board as we take OMNI to new heights while maintaining our company’s reputation for hard work and integrity. We are excited for the future of OMNI.”
 
In addition to taking over management of OMNI’s day-to-day operations, Mr. Coury’s role at the company will include strategic growth initiatives, expansion of educational programing, creating dynamic synergies within OMNI and being an ambassador to the brand.
 
“In the practice transition industry, there is no other organization with the talent and ingenuity that OMNI has shown in providing innovative solutions for their clients,” Mr. Coury stated. “Rod has built an amazing organization over the past 15 years and I am truly excited to join this team of professionals. I see no limit to the potential we can reach.”
 
About OMNI Practice Group
 
OMNI Practice Group is the leading provider of dental, veterinary, chiropractic and medical practice transitions, sales, valuations, consulting and real estate services. Headquartered in Kenmore, Washington, OMNI has additional offices throughout the U.S.
 
For more information about OMNI Practice Group, visit www.omnigroupintl.com.
 
Contact:
Rod Johnston, MBA, CMA
OMNI Practice Group
6141 Bothell Way NE #301, Kenmore, WA 98028
(877) 866-6053

Owning a physical therapy practice can be like drinking water from a fire hose.  It completely consumes you physically, emotionally and intellectually.  You not only wear the hat of a physical therapist, you have to also play the role of human resources, accountant, marketing, public relations, lease negotiator, salesman, supply management, janitor, referee, etc.  Whomever believes there is a 40 hour work week as a practice owner has not owned a physical therapy practice.  Yet, all the public ever sees of you are running in and out of the door telling them they need to come back for more than once. They don’t see or appreciate your countless hours refereeing staff disputes, negotiating a new lease, fixing a broken equipment or installing a new light.  They think you are gone fishing or at your lake house every weekend.

Many of you have recognized the power and need to delegate.  You have people you can trust - your knowledgeable service rep now fixes your equipment, a skilled plumber who fixes the leaky sink and an expert commercial broker who takes care of your lease.  By delegating you have freed up your time, reduced your stress and let the experts use their skills to do what they do best.
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When it comes time for your physical therapy transition, you can try doing it yourself, but that’s like giving the patient a table and have them adjust their friends at home.  They don’t have the knowledge, experience or skills to do it right and may end up hurting others in the end.  Or, you can entrust your physical therapy transition to the people at OMNI Physical Therapy Practice Group who have the experience, knowledge and track record to help you achieve your goal giving you peace of mind, freedom and more happiness. 

​I meet physical therapists each year who are looking to buy an existing physical therapy practice.  Of those, I would estimate that 30% have done any research on what is involved in buying a practice. Of those 30%, none of them know the beginning to end process of buying a physical therapy practice.  While I can’t cover all the steps in this article, I can give you some guidance on where to start and what steps to take before buying a practice.
 
The very first recommendation I have is that you should be at least 2 years out of school.  I have seen physical therapists buy a practice right out of school, but I’ve seen the majority of them struggle for two years until they finally figured things out.  Now that I’ve got that out of the way, here are your steps:
 

1.  Contact a bank that finances physical therapy practice acquisitions and make sure you can qualify for a good loan.  Banks now require decent credit scores, cash in the bank, and in some cases a current associateship.  Try to avoid SBA loans if you can as they can be expensive with early payment penalties.
2. The next step is to understand a little bit about physical therapy practice valuations.  You don’t want to go into a sale not knowing if the practice is worth the price listed or not.  A “rule of thumb” is that a practice is typically worth between 65% and 75% of its’ last 12 months production.  Remember, that’s a rule of thumb.  I’ve seen practices go for as high as 110% of production and as low as 50% of production.  For a book on physical therapy Practice Valuations, contact me and I’ll send it to you.
3. Think about where you want to practice.  You’re probably going to be there a while, so you might as well like the area.   Also, research demographics.  There are excellent demographic sites that sell great physical therapy demographic information for about $500.  It will tell you where the best locations to practice are.
4. Put together a good team.  Get referrals for a good physical therapy attorney, a good physical therapy broker and a good accountant.  They’ll help you analyze the Physical therapy practice, do the legal work and help you find a practice.
5. Study up on practice management and physical therapy financial ratios.  You should know that lab fees should not be any higher than 10% of the practice production.  Or, that staff expense should be 20% to 25% of production.  Be an informed buyer.
6. Be prepared for your due diligence.  You need to know what to look for when you do get to the point of buying a physical therapy practice.  Is it an older physical therapist selling that hasn’t done much treatment in the last 5 years?  (buyer beware) or Is it a conveyor belt physical therapist that has done very spec of physical therapy medicine, and then some, on all the patients, so there’s none left for you.  Know how to spot these things.
7. Finally, spend some time with a physical therapy broker before you go look at the practice.  Understand what the practice you are looking at is all about.  Does the broker think it’s honestly a good practice?  Why?  Once you’re comfortable with the numbers, then go take a look at the practice.

By being an informed buyer, you will avoid a lot of headaches and potential problems down the road.  There are practices that are gold mines and practices that you should not touch.  Being educated and knowing the difference is critical in your physical therapy practice acquisition success.  

​Many physical therapists will seek to sell their practice by themselves, presumably to “save money”. Sometimes the grass is greener on the other side so we do things out of emotion instead of “doing the math”. If you have a couple hundred hours of spare time and love working with intelligent, challenging people, and showing your physical therapy practice to strangers on evenings and weekends, you are going to love the process of selling your practice.
 
For most physical therapists their practice is one of their most valuable assets, so if that sounds like you and you would like to go “For Sale By Owner” then now is the time to start to prepare.  Probably a good time to study a little law, accounting, marketing, advertising, sales, and perhaps negotiations. Think about how you are going to tell your staff or decide to wait until they figure it out. Be sure not to lose them or your practice may become more difficult to sell (and you could lose more in practice value than the commissions you are saving). If your practice has seen better days you might consider sprucing it up a bit or maybe a little remodeling? As a do it your self-er you will save even more money.
 
Ask yourself “how do I value my physical therapy practice” and balance that with what the market will bear. Keep in mind that the buyer will always think they are paying too much and the seller thinks they are selling too low. Once you're ready to go, write your ads, contact (play phone tag with) the various media vendors to figure out how to best execute your marketing plan. Piece of cake, pay the man and place your ads. Soon your phone will be ringing, don't forget to follow-up with the inquiries in your new email address.
 
Schedule the viewings after hours, on your day off, and the weekends. Don't be too disappointed when something happens and the person doesn’t show up or when the “tire kickers” don't give you feedback. Soon if all goes well you will receive a Letter of Intent. There will likely be a number of things you'll need to do to assist the buyer with their due diligence so be prepared to assemble all the information ahead of time if possible. If you are leasing the office, do whatever you can to negotiate with the property owner for as smooth as transition as possible with the buyer. WARNING: half of all deals fall apart because of landlord conflicts with the seller or buyer. If this happens to you and there is a 50-50 chance it will, be prepared to start over and keep your emotions in check.
 
Is it worth it to “Do It Yourself” to sell your physical therapy practice? Depends upon how many hours it takes, how much distraction you are comfortable with, and how much quality of life you are willing to sacrifice.
 
The legal community has a saying, “he who represents himself has a fool for a client”.

​You have had a great career and now you are thinking about selling and transitioning out of your physical therapy practice. You would like to get the best value for your practice. Do you just walk away?  Being prepared can not only help you get the best price, it will help ensure a smooth transition. 
 
Here are a few things you can do to help prepare for your physical therapy practice transition:

1. Know your financial situation - Meet with your financial advisor, CPA, or whoever gives you financial advice to get a good picture of where you are with your savings and investments.

2. Get a practice valuation - A practice valuation will help you see how much equity you have in your practice.  Additionally, a CPA can help you figure out what the taxes and net proceeds from your sale will be.

3. Update Technology - Buyer’s like to see new technology in a practice.

4. Cosmetic updates - Have you updated the interior with paint and carpet in the last 20 years?  If not, it’s time.  Buyers like a practice with a fresh feel to it.  A 1970’s feel was good in the 1970’s.

5. Review Accounts Receivable Aging - Collect any past due accounts, send to collections or write them off.  Also, review credits to either pay back to the patient or send unclaimed property to the State.

6. Review Staffing - Are you over or understaffed?  Adjust accordingly.

7. Clean up your financial statements - Make sure the expenses you’re running through your Physical therapy practice financial are related to your practice, or at least identifiable as an adjustment. 

8. Consider ramping up production - If you are not sure how, then hire a physical therapy consultant.  Ramping up your practice when you’re 3 or more years out will pay dividends on the sales price.

9. Review your fees - Do you have the lowest fees in the area?  Consider a fee increase to catch up.

10. Harvest your Equity - Maybe you are a few years away from retirement, but tired of being an owner.  You should consider selling now, take the equity out of your physical therapy practice and work back as a physical therapy associate.
  

When beginning the process of selling a physical therapy practice, it’s imperative to work with specialists who have experience in selling physical therapy practices. Experienced transaction brokers can help Physical therapy practice owners streamline the sale and achieve their ideal return on investment. The team at OMNI Physical Therapy Practice Group are specialists in this industry, and in their latest article they highlight five benefits of selling a Physical therapy practice through their services.

1. They Are Marketing Specialists

Working with a trusted industry specialist such as OMNI Physical Therapy Practice Group gives sellers access to a wider array of market options. Because the company’s staff has significant experience in the marketplace, they know how to quickly locate qualified buyers and to promote the seller’s practice in high visibility markets.

1. They’re Experts in Business Transitions

The specialists at OMNI Physical Therapy Practice Group have many years of experience in business transitions. They’ve helped hundreds of sellers to achieve their ideal objectives through the selling of their Physical therapy practice. This means they can guide sellers throughout the entire process, from finding qualified buyers to completing negotiations and due diligence alongside the buyer’s legal team.

1. Frees Up the Business Owner’s Time

The work of OMNI helps to support business owners in running their organization throughout the negotiations. They won’t have to take time away from their business to review the marketplace or to deal directly with buyer negotiations. They can leave all the work to the team at OMNI. This also means that they can retain the value of their company throughout the transaction, helping to support the on-going growth of the company and meet the needs of their patients while OMNI responds to all transition requirements.

1. They can Prepare the Business for Sale

Because of OMNI’s experience in the marketplace, they know what it takes to prepare a company for sale. They can pinpoint structural issues within a business and help the seller to eliminate these structural issues before the sale begins. They can also highlight the elements the buyer will be analyzing during their due diligence, and complete processes areas such as the completing of all equipment paperwork to ensure every part of the transaction is in place before the sale begins.

1. They Seamlessly Close Business Transactions

The length of time a business transaction takes to complete can have a significant impact on a business owner and their finances. The team at OMNI works to reduce the sales timeframe and streamline the closing process. They ensure each element of the sale is completed according to the seller’s timeframe, and help reduce closing costs to ensure optimal value for the business.
Specialists for the sale of Physical Therapy practice businesses, OMNI is committed to working with sellers across the marketplace in finding qualified buyers for their practice. To learn more on the company and their services, contact us today 877.866.6053 or www.omnipg-pt.com

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If you already own a practice, have you ever considered buying an existing physical therapy practice located close to your first practice and merging the two together?  If you ask most doctors, they will say the best way to build a practice is through taking care of your patients and bringing in new patients via word of mouth and marketing.  And, they would be correct.  However, acquiring a second practice and merging the two together makes sense in many ways.
 
First off, have you ever calculated the cost of acquiring a patient via old fashioned word of mouth?  It requires a lot of work if you include everything from building your brand, training your staff, maintaining a spotless, high-tech practice, etc., the cost could easily be hundreds of dollars or more per patient.  The cost of acquiring a patient via marketing is even more.  Acquiring a physical therapy practice with existing patients can typically run from several hundred dollars per active patient to $1,000 per active patient.  Slightly less to maybe equal of acquiring a patient through a normal channel.  However, you get a high volume of patients very quickly in addition to adding income to your pocket.
 
Secondly, you acquire a stream of revenue at a near dollar to dollar relationship.  If the selling practice is producing $500,000 per year, you should be able to repeat the $500,000 in revenue by merging the practices together, or worst case, slightly below the $500,000.  The good news, is you don't bring over all of the expenses of the selling practice.  You typically can save in a number of ways including reducing staff of the selling practice, utilities are not double as the practices merge to one location, there is only one rent payment (more on that in a minute), only one set of books, so only one payroll service and one bookkeeper and accountant and several other services can be eliminated.  So, while getting the majority of the revenue to increase your practice collections, you only get a portion of the expenses.  This increases the income of the practice owner - you!
 
Thirdly, by acquiring another physical therapist’s office, you reduce the number of practices in your area by one.  Less competition equals more new patients for you.  You can hire the selling doctor as an employee to help with the physical therapy transition as well as perform some other things that will help with patient retention.  

Taxes are a fact of life, and an extremely important consideration when considering a physical therapy practice transition or sale. Let’s explore some potential tax mitigation strategies to consider.

Stock Sale. If you are incorporated, sale of the stock in your corporation to the physical therapy practice buyer can potentially yield you the greatest tax savings, because the sale of stock is almost exclusively taxed at the lower fixed capital gains rate as compared to the higher, tiered ordinary income rates. However, and this is a BIG however, stock is a non-depreciable asset to the buyer. As such, the physical therapy practice buyer is not able to write off the sales price and essentially ends up buying your practice with after-tax dollars. Consequently, a buyer is likely only to agree to buy your stock if you are willing to reduce your purchase price by 30 percent or more. For this reason (and many associated legal and liability complications), almost all physical therapy practices are sold as “asset sales.” In other words, the seller retains his/her corporation and all of its stock and instead sells all of the tangible and intangible assets of the corporation (i.e., the physical therapy practice). The buyer is then able to depreciate and amortize (write off) the entire purchase price.

Price Allocation. The IRS requires the total price of a physical therapy practice for sale to be allocated to the various types of assets being sold and that the allocation be made according to the fair market value of the assets. As a general rule, the tangible assets are taxed as ordinary income above basis, and the intangible assets are taxed as capital gains. (Above basis means the difference between what you are selling the tangible assets for and your book value or depreciated value.) Any consideration for a covenant not to compete will also be taxed as ordinary income. Since fair market value is somewhat subjective, there is some room for negotiating the overall allocation of the purchase price. As a physical therapy practice seller, you will save taxes if you can negotiate with a buyer for a lower allocation to tangible assets (equipment, furniture, fixtures, supplies, etc.) and a higher allocation to intangible assets (goodwill and patient records). (Unfortunately, it will benefit the physical therapy practice buyer to have just the opposite allocation, so consideration must be given to making the allocation fair to both parties.)

Carry back a note. Sellers frequently ask us, “Won’t I save on taxes if I self-finance part or all of the sales price (i.e., carry back a promissory note from the buyer)?” The answer is, “No, but maybe . . .” As mentioned above, the portion of the price in an asset sale that will be taxed as ordinary income will be due in the year of the sale. That recapture will be taxed regardless of the receipt of any actual cash at closing, which means you owe the ordinary income tax associated with the recapture even if you do not receive a cent at closing. Consequently, if you do not want to have to pay to sell your practice, it would be prudent to ask for enough of a cash down payment to cover the tax liability you will incur from the recapture. Since most of the remainder of the sales price will be taxed as capital gains and since the capital gain tax rate is a fixed rate, the same tax will be applied and the same tax amount owed whether you receive that portion of the price now or paid to you over time; unless . . . there is a change in the capital gains tax rate before the note you are carrying is paid off. If the rates go up, you would be taxed at that higher rate on that income as it comes in. Otherwise, self-financing a portion of the price serves only to defer capital gains tax, but it will not lower the total tax. (Also note that the interest portion of any promissory note payments will be taxed as ordinary income to the holder, while the principal portion subject to capital gains will be taxed at the capital gains rate.)

Sale Timing. As discussed above, the tax associated with recapture over basis on the sale of tangible assets will be determined by your ordinary income tax bracket in the year of the sale. If you are planning to retire after the sale of your practice and, consequently, will have a drop in your ordinary income level, it may behoove you to strategically time the sale of your practice until after the start of the next tax year. Also, if you have owned your physical therapy practice for less than one year, you should, if possible, wait at least one full year before selling it since the sale of goodwill within a year of ownership will result in the higher short-term capital gains rate being applied instead of the long-term capital gains rate.

“C” Corporation Consideration. If you are currently incorporated and being taxed as a regular “C” Corporation, the sale of goodwill by your corporation will likely be subject to double taxation, once as capital gains inside your corporation and then again as ordinary income when paid as a distribution to the shareholder(s). There is some case precedence that allows for the shareholder(s) of “C” Corporations in closely held and professional businesses to sell goodwill individually, outside of the corporation, thus avoiding that double taxation. If this applies to you, consult with your CPA and/or tax attorney regarding the details of such a tax strategy and its application to your particular situation.

1031 Exchanges. If you are selling a physical therapy practice now and are planning to buy another practice within six months, a 1031 or “Like Kind” Exchange may be a tax deferral strategy to consider. It allows you to defer the taxes associated with recapture over basis you would otherwise incur with the sale of your tangible assets. A 1031 Exchange has very specific and rigid requirements. Consult with your CPA and/or tax attorney regarding the details of such a tax strategy.
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Charitable Remainder Trusts. Charitable Remainder Trusts are not subject to capital gains tax. As such, a seller may potentially eliminate capital gains tax on the sale of his goodwill by donating it to a qualified charity. The downside, obviously, is that the seller must donate the goodwill proceeds to that charity. This is another strategy where you would want to receive guidance from your CPA and/or tax attorney.