September 7, 2023 • 22 mins
Ready to level up your understanding of professional medical documents? I'm your host, Dr. Una, and I'll be taking you on an enlightening journey as we examine the five key documents that physicians should never sign without thorough scrutiny. We're digging deep into the complexities of employment agreements, non-compete clauses, and IP clauses, exploring the potential pitfalls and how you can steer clear of them. I'll be sharing my experiences and offering vital advice to help you safeguard your interests and comprehend the terms of any agreement you enter into.
Navigating the world of large financial commitments requires not just understanding but also a keen eye. Tune in as we delve into the risks associated with hasty investments without proper research. We'll discuss the art of making informed business decisions that ensure every contract you sign isn't just a piece of paper, but a win-win situation. Join me as I share insights into the importance of consulting a lawyer and seeking advice from those who've walked this path before. This is not just about reading documents but about signing agreements with intelligence and intentionality. So, listen in, fellow physicians, and empower yourselves with the knowledge needed to make smart decisions in your professional journey.
Additional Resources:
- Learn more about my 12-month program.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:03):
Hi dogs, welcome to the EntremD podcast, where it's
all about helping amazingphysicians just like you embrace
entrepreneurship so you canhave the freedom to live life
and practice medicine on yourterms.
I'm your host, dr Ibnah.
Hello.
Hello, my friend, welcome backto another episode of the
(00:25):
EntremD podcast.
This is going to be a lot offun.
I am going to start off bysaying I'm not a lawyer, but
we're going to talk about thesedocuments and like really, five
documents to never sign withoutdue diligence.
Okay, and this is somethingthat I've seen burn so many
physicians over the last five orsix years, and I want you to be
(00:50):
aware, I want you to help yourcolleagues be aware, I want you
to think about this carefullybefore you do this.
And I want to really start offby saying when it comes to an
agreement, there are a lot ofthings that can be said verbally
, okay, but we do not live inthe handshake era, and if there
(01:13):
are things that are saidverbally that don't make it into
a contract or an agreement,it's not written.
I want you to think of it thesame way.
You think about yourdocumentation, your chart right.
If it is not documented, itnever happened and if it's not
documented in the agreement, itmeans there was no agreement on
(01:35):
those things, right.
And so I really want us tostart thinking that way.
Most physicians were reallynice and we're like, oh, I'm
sure it will be okay, we're justin the contract, it's a
formality.
But I want you to understandthat I know a lot of physicians
think that way, but the personyou're doing the agreement with
(01:55):
may not think that way at all,and when push comes to shove,
you need to have something inwriting that also protects you,
not just whoever you're doingthe agreement with.
And so let's look at a few ofthese things.
And when I talk about duediligence, there's the part of
having the lawyer review it.
(02:16):
You want to make sure it's alawyer where.
That's what they do.
If it's an employment contract,you want an employment lawyer.
If you're doing an acquisition,you want it to be a lawyer who
has experience there.
Yes, you do not speak lawyer,but you paid the lawyer, so you
would like to understand likeyou speak legalese.
I do not speak that language atall.
That's what you tell the lawyer.
And help me understand.
(02:38):
What does this mean, right?
What are my responsibilities?
What if this doesn't work?
What does that mean you want tohave an understanding of that?
Then you also want to talk topeople who've been there, done
that.
I have a few t-shirts and theycan also point you to mistakes.
They made things, they're happy, they did things, they wish
they did things that maybecolleagues of theirs who have
(03:01):
gone through the same experiencemistyled on.
So you want to get the legalcounsel, but you also want to
get counsel from people notpeople who just have opinions,
but people who've done thisright.
Okay, so five documents, numberone.
Number one is an employmentagreement or an employment
contract.
Right, I remember the first oneI signed, wow 2008.
(03:22):
I don't really, really, I don'tremember paying it that much.
Mind, I didn't get a lawyer tolook at it and don't tell
anybody, but I didn't do that.
I was a doctor and I was goingto be working for another doctor
and this is going to be great.
We're just doing this becausewe have to.
That was my interpretation.
Fortunately, I worked for avery great doctor and we never
(03:44):
had any problems with thecontract or anything like that,
but I can see how that couldhave been a disaster, depending
on who I ended up working with.
It's really great to work withsomeone who is great, but you
also want to make sure you havethis in place just in case, just
in case they're not.
You want that looked at.
You might say, dr Una,everybody knows that and it is
(04:06):
not true.
It is not true.
The best of us have done thingswhere either you didn't have a
lawyer review it or you had alawyer review it and they told
you these are the terms andyou're like, yeah, but that will
never happen Because you wantto make sure remember, you work
for you.
You want to make sure thatwhatever contract you're signing
(04:26):
is a win-win situation.
It's a win for both parties.
And so what are the terms?
How long would you work there?
How long is the contract for?
Is there a non-compete?
If there's a non-compete,what's the radius?
Because I cannot tell you howmany people decide they can't do
this job anymore and they wantto quit and then, for the first
time, they're noticing thatthere is a non-compete one and
(04:49):
they're noticing the radius ofthe non-compete.
So there are people who havecontracts with their non-compete
.
They practically cannot work inthat state.
That's how ridiculous it is.
And you may say it's notenforceable, but in this case
it's the hospital system, right,like, even if it's not
enforceable, if they choose that, they want to keep you in court
.
You don't have the pockets tostay with them in court, even if
(05:12):
they're not going to win, soyou lose because you just don't
have pockets deep enough, right?
So, anyway, what is thenon-compete?
Is there an IP clause?
I have seen everything.
To anything you do outside ofhere, we own forever.
I've seen all kinds of crazystuff.
Now, you can't do that in thisday and age.
I mean, you may be workingthere, you may have a podcast,
(05:33):
you may work there, you do thespeaking, you write a book, you
do all of these other things.
Like, you can't just take alook, take a look, don't just
sign it.
Remember, you work for you now,right, you work for you.
You work for a company Doctor,you incorporate it, right?
Okay, so you want to look atthose things?
Right, what happens to the tale?
Don't ask after Ask before whathappens.
(05:54):
You might say, oh, but this ismy forever job.
You don't know that.
I hope it is, but the agreementis there.
So if there are disagreements,people can go and say, okay,
this is what we agreed to, right, and so you want to check.
What is that?
What is that?
You want to know what exactlyyou're getting into.
Right, if there is, oh, there'san opportunity to buy in, to be
(06:17):
a partner in all of thosethings, okay, great.
But what are the terms?
Right, like, they have to bethere, okay, all right.
So that's the first thing.
That's the first one is theemployment contract.
Like, don't treat it like, thisis my forever job and nothing's
going to go wrong.
And I hope nothing goes wrong,and a lot of times nothing goes
(06:38):
wrong.
But we don't wear seatbeltsbecause we plan to get into
accidents.
We wear them because we mightand we want to be ready.
Okay, all right.
So that's number one, numbertwo.
Number two is your partnershipagreement, right, so you're in a
practice, you're going to buyin all of that stuff.
You want to look at all thethings, right, what is the buy
in?
What is my responsibility as apartner?
(07:00):
If I decide to leave thispartnership?
How does that work?
Right, how will I be paid?
If they're bringing in newpartners?
What happens to what I have?
If we have disagreements, howdo we resolve them?
Like, you want it all spelledout there and you may say, oh,
(07:20):
but we've been friends sincehigh school.
There's you know, nothing couldgo wrong here.
You don't know that people havebeen friends since they're high
school.
They got married, they gotdivorced, okay.
So what are the terms?
Don't read it by yourself andsay I got this.
No, you don't understandlegalese.
Like, the contract has Englishwords but they're not really
(07:43):
English.
It's a separate language thatuses English words.
It's called legalese, and letthat be explained.
Play out every scenario thatcould be a problem.
Talk to people who've been inpartnerships.
What have the issues been Right?
And you want to make sure thatyou've thought through the
scenarios.
We don't think about it becausethat's what we expect, but
that's what.
(08:03):
That's a smart thing to do.
That's the wise thing to do,right, okay?
The third one would be youracquisition agreement.
So maybe you're in privatepractice and you decided I want
to buy a practice, or maybeyou're not private practice.
Maybe you're a coach and youwanted to buy an app company or
another coaching company.
(08:23):
Or you wanted to buy a companybecause they have a great sales
team and you wanted to acquiretheir sales team, whatever.
And so you're getting thedocuments.
Oh, my goodness, this is not ajoke.
This is a big deal.
You want to get a lawyer.
You want to get a lawyer whoknows what they're doing, like
this is their bread and butter.
You want to find people whohave done acquisitions,
(08:45):
especially in that industry.
You want to get the skinny onit, right, what needs to be in
there?
Okay, is the owner going tostay on?
If they're going to stay on,for how long?
What are they going to do asthey stay on?
Right, is the other team?
If there's real estate, is thatincluded in the deal?
If it's not included in thedeal, because the person wants
to keep their real estate, whatare the lease terms and how long
(09:08):
is it for?
And do you have an opportunityto renew?
Right?
Okay, if you're taking over AR,what does that mean?
If it, like all of it, needs tobe there and you need to do the
due diligence If you're goingto be acquiring businesses, you
have up-leveled your game.
Okay, you've up-leveled yourgame, which also means you need
(09:29):
to up-level your skill.
You need to up-level yourunderstanding.
You need to up your game.
So you may say it shouldn'ttake all that, but it does.
You are going to sit down andyou are going to learn about
acquisitions.
You are going to learn aboutthe pitfalls.
You are going to talk to peoplein the industry.
You're going to sleep, eat,breathe this thing until you
understand it.
There is nothing you've done inmedical school, there is
(09:49):
nothing you've done as anentrepreneur that prepares you
to just go into acquisitionswithout acquiring a new skill
set, right, okay, so that'snumber three.
Okay, so, especially in thesetimes when people are buying
private practices and they justfind out they buy stuff that is
almost useless, right, and it'sdone.
(10:10):
Okay, number four.
Now number four.
Let me switch it.
I'll change number four tonumber five and you'll see why
Number four would be, you know,like a PE, a private equity sale
, like that agreement.
What does it mean?
People have sold theirpractices, ended up working more
(10:31):
, making less and are totallymiserable.
What does it mean?
How long are they asking you tostay on?
What are the terms of youremployment, right?
What are you going back to?
Rvus or X number of patientsper day or whatever?
What is that?
You want to think of life afterthe sale?
What is that going to look like?
(10:53):
You're going to play out allthe scenarios.
You're going to talk to peoplewho've done this and what are
the mistakes you made?
What are the things you didthat you did right?
What if you could do this over?
What would you do differentlyand not with one person or two
people?
You're going to talk to a lotof people, right?
You're going to talk to alawyer and you're not going to
(11:13):
talk to a lawyer who has notdone this right, like you don't
want them to experiment with you, okay, all right.
So that's number four.
Like, don't just do it, don't.
Doctors have been messed up somany times.
Like, I see this a lot.
You know, I've had a fewclients who you know.
Before they came to work withme, they fell into stuff like
(11:33):
this or in Facebook groups.
I would see that and I'm like,my goodness right, acquiring a
business is not a joke.
Selling a business is not ajoke.
Deciding to work for somebodyfor two years is not a joke.
You become it, decides tobecome a partner.
That is not a joke, right?
So, yeah, you want to know.
Okay, you want to know.
The final one is the one thatprobably hurts my heart the most
(11:56):
, and that is your equipmentlease contracts.
Okay, now there are these verysmooth salespeople who know to
target doctors because, for themost part, many of us will fall
for this and I'm recording thispodcast episode hoping after
(12:18):
this nobody does, and mygoodness, if people who are in
plastic surgery, obgyn,dermatology, even family
medicine, because they'll tellthem they can do it, please
share this episode with them.
Everybody, please, with 17cherries on top.
Okay, so the most common one isthe laser.
I hear it all the time like thelasers, oh, this laser, it does
(12:43):
this and this is how much.
You won't even have to buy it,you can just rent it and it'll
be this payment every month,which is usually thousands of
dollars.
And if you only had five people, four people, six people who
would use this service, it paysfor the machine.
It's great.
We will have our marketingpeople like market for you.
(13:05):
So this is really a plug andplay.
They will tell you passiveincome.
Hear me now.
Okay, there's nothing passiveabout that.
The marketing people are notgoing to market for you and I
cannot tell you how many peoplehave payments the size of a
mortgage that they owe for fiveyears and they have not been
(13:25):
able to get more than fivepeople on said machine.
If it seems too good to be truea lot of times it is Okay Now
to start with.
Okay, if you have things inyour practice, this is primarily
private practice.
But if you have things in yourpractice, that man, I need to
work on these things and I know,once I do them, our revenue
(13:48):
will be so much better, thingswill be so much better.
But you haven't been able tobring yourself to do them.
You're tired, you'reoverwhelmed, you're burned out,
whatever.
And this seems very shiny andvery good.
It seems like cold water on ahot Atlanta afternoon, but a lot
of times that's all it is ashiny, right, a shiny.
(14:10):
Now my same lasers are not.
It's not a profitable thing.
No, no, no, that's not what I'msaying.
But what I am starting to sayis, if there are other stuff not
working and you're trying tofix them, if you don't have the
volume, for instance, ofpatients you want to see, this
is not going to fix that,because you're going to need the
(14:32):
volume to create the people whoare going to use the laser,
okay.
So I had a lady who walked upto me.
She's, oh, dr Narm, not makingany money in my practice.
I've been open for a number ofmonths, I'm not having people
come in and all this stuff and Iwent for this conference.
I was approached by this lasercompany.
They said, if I could just dothis and if I get only four
(14:52):
patients a month, that theywould.
They will cover the cost of themachine and all of those things
.
And I'm like, how much is it?
And she's well, with thepayments and everything will
come to a total about $450,000.
I'm like you're not even makingpayroll, like you're not, like
(15:12):
you don't even have patients andyou want to acquire a whole
mortgage so you can get thesefour imaginary patients from who
knows where to meet the cost.
Like, and so it's not yourpurpose to meet the cost to pay
for the machine.
What of the overhead?
What of your profit?
I'm like, what are you doing?
(15:33):
Right?
And she didn't sign up for it.
So I'm kind of super happy forus.
Like, I just saved you half amillion dollars.
Like you owe me forever, right,thank you, but don't get sucked
into that stuff.
Sure, it makes sense.
I'm a big fan of observing thepace of grace you just started,
(15:55):
or you're at a point where youjust, whoof, just became
profitable.
I'm not taking $500,000 in debtto for a thing that you're
telling me.
This is what I need to do tocover the cost of it.
I would say and I'm apediatrician, so nobody's come
to me for this but I would say,well, if you're going to give me
an out right, like if thisdoesn't work, if I'm not able to
(16:19):
get the number of patients thatI need, then I can give you 30
days notice and send yourmachine back.
Well, guess what?
Nobody's gonna do that.
They're not doing that.
They're not doing that.
I am telling you I can't count.
I can't count the number ofpeople who have these things
sitting in their offices doingnothing.
Okay, so maybe I'm saving you$400,000.
(16:41):
I don't know right, but justlook at it, pay attention to
yourself and pay attention to itand ask yourself do I already
have the demand for this?
No, okay, I have to create thedemand for this.
What is the opportunity cost ofcreating the demand for this?
(17:02):
I have to stop creating thedemand for the other things.
I say hello, okay, if thisdoesn't work and I'm stuck with
the $400,000 bill with no ROI,am I willing to do that?
And the answer is no, then youranswer is no right.
They can give you a loaner andyou can do a trial.
(17:22):
They can give you an out, butthey don't give them out.
They don't give them out.
I can't tell you how manypeople they just paying for it.
So now they're seeing patientsto pay for a machine they're not
using.
So am I saying, don't get amachine?
Of course not.
I'm sure there are people whoare using it and they're making
a great ROI off of it.
(17:44):
But this is the thing.
Look at the contract, look atwhat it says, understand what it
says and decide if you want todo that or not.
Okay, don't stay in La La Land.
They will tell you, they willmarket and all of that.
You can ask them.
If you're so sure about that,okay, put it in writing.
Put it in writing that you'llmake sure I have at least four
patients every month.
I will do the work, but atleast I'll cover the cost of the
(18:04):
machine.
They're not going to do that.
You know why?
Cause they're not going to dothat, cause they're not going to
market, cause they're not goingto take responsibility for that
.
So the question is okay, if Iknow I have to take
responsibility for the marketing, will I do it?
And if the answer is no, thendon't do it.
Okay, I know I went a littlebit of a rant there, but I
cannot tell you how many.
I am telling you send this tothe doctors in your life.
(18:24):
You'll be saving people half amillion a pop, okay, but the
bottom line is this we need tobe smart.
Okay, we are business owners.
Even if you work a job, youwork for a doctor you
incorporate it right.
If you're working in amulti-semitre figure business, I
mean like you're a boss, you'rea business owner, you're savvy,
you do.
Your signature is worthsomething.
(18:45):
You don't just put yoursignature on any document before
you do that.
Understand that thing's atstake.
Okay, so I'm going to have adoctor, look at it.
I'm going to have conversationswith people who've done it
right Not people who haveopinions, but people who've done
it.
I'm going to ask them whattheir mistakes, what they wish
they did differently, and all ofthose things.
I'm going to have realconversations before I put this
(19:06):
precious signature of mine onany document, any, okay, all
right, so that's what I have foryou, that's what I got for you.
And if you're here and you'rean employer I know we talked
about employment agreements youalso want to make sure that all
the terms, all the things you'rethinking about in your head.
(19:27):
They made it to the document,right?
Like, for instance, I've hadpeople go there upset, the
doctors are working with them,don't want to do a call, but
there's nothing in the documentthat said anything about call.
There's nothing document.
That's like whatever you want,put it there, put it there.
This is serious stuff.
Okay, this is where weinterface with the legal world.
This is serious stuff.
(19:48):
Okay, so from today, we nolonger just put our signature
anywhere.
Okay, from today, we no longerlook at a document, take it at
face value.
We play it out.
If this were to happen likethis, what does that mean?
Cause, when you look at thelegal document, you will see all
the things that say oh, if youdon't keep your part, this is
what's going to happen.
They're clear on what they want.
Are you clear on what you want?
Okay, so let's do that andlet's start signing agreements
(20:11):
with more intelligence andintentionality and clarity,
right, and not just throw oursignature at stuff.
Okay, your signatures were toomuch at this point, all right.
Okay, so best thing you can dois share this episode with
another doctor.
I'll see you on the nextepisode of the Outstanding
Podcast.
Okay, so let's get started.
Hey, if you love listening tothe EntryMD podcast, I want to
(20:35):
invite you to join EntryMD ondemand.
It is my signature subscriptionprogram that gives you access
to a library of business coursesdesigned to help you do one
thing as a physicianentrepreneur, and that is to
thrive.
Just head out to EntryMDcom,forward slash on demand, and I'd
love to have you join us.
See you on the inside.
Hi dogs, welcome to the EntremD podcast, where it's
all about helping amazingphysicians just like you embrace
entrepreneurship so you canhave the freedom to live life
and practice medicine on yourterms.
I'm your host, dr Ibnah.
Hello.
Hello, my friend, welcome backto another episode of the
(00:25):
EntremD podcast.
This is going to be a lot offun.
I am going to start off bysaying I'm not a lawyer, but
we're going to talk about thesedocuments and like really, five
documents to never sign withoutdue diligence.
Okay, and this is somethingthat I've seen burn so many
physicians over the last five orsix years, and I want you to be
(00:50):
aware, I want you to help yourcolleagues be aware, I want you
to think about this carefullybefore you do this.
And I want to really start offby saying when it comes to an
agreement, there are a lot ofthings that can be said verbally
, okay, but we do not live inthe handshake era, and if there
(01:13):
are things that are saidverbally that don't make it into
a contract or an agreement,it's not written.
I want you to think of it thesame way.
You think about yourdocumentation, your chart right.
If it is not documented, itnever happened and if it's not
documented in the agreement, itmeans there was no agreement on
(01:35):
those things, right.
And so I really want us tostart thinking that way.
Most physicians were reallynice and we're like, oh, I'm
sure it will be okay, we're justin the contract, it's a
formality.
But I want you to understandthat I know a lot of physicians
think that way, but the personyou're doing the agreement with
(01:55):
may not think that way at all,and when push comes to shove,
you need to have something inwriting that also protects you,
not just whoever you're doingthe agreement with.
And so let's look at a few ofthese things.
And when I talk about duediligence, there's the part of
having the lawyer review it.
(02:16):
You want to make sure it's alawyer where.
That's what they do.
If it's an employment contract,you want an employment lawyer.
If you're doing an acquisition,you want it to be a lawyer who
has experience there.
Yes, you do not speak lawyer,but you paid the lawyer, so you
would like to understand likeyou speak legalese.
I do not speak that language atall.
That's what you tell the lawyer.
And help me understand.
(02:38):
What does this mean, right?
What are my responsibilities?
What if this doesn't work?
What does that mean you want tohave an understanding of that?
Then you also want to talk topeople who've been there, done
that.
I have a few t-shirts and theycan also point you to mistakes.
They made things, they're happy, they did things, they wish
they did things that maybecolleagues of theirs who have
(03:01):
gone through the same experiencemistyled on.
So you want to get the legalcounsel, but you also want to
get counsel from people notpeople who just have opinions,
but people who've done thisright.
Okay, so five documents, numberone.
Number one is an employmentagreement or an employment
contract.
Right, I remember the first oneI signed, wow 2008.
(03:22):
I don't really, really, I don'tremember paying it that much.
Mind, I didn't get a lawyer tolook at it and don't tell
anybody, but I didn't do that.
I was a doctor and I was goingto be working for another doctor
and this is going to be great.
We're just doing this becausewe have to.
That was my interpretation.
Fortunately, I worked for avery great doctor and we never
(03:44):
had any problems with thecontract or anything like that,
but I can see how that couldhave been a disaster, depending
on who I ended up working with.
It's really great to work withsomeone who is great, but you
also want to make sure you havethis in place just in case, just
in case they're not.
You want that looked at.
You might say, dr Una,everybody knows that and it is
(04:06):
not true.
It is not true.
The best of us have done thingswhere either you didn't have a
lawyer review it or you had alawyer review it and they told
you these are the terms andyou're like, yeah, but that will
never happen Because you wantto make sure remember, you work
for you.
You want to make sure thatwhatever contract you're signing
(04:26):
is a win-win situation.
It's a win for both parties.
And so what are the terms?
How long would you work there?
How long is the contract for?
Is there a non-compete?
If there's a non-compete,what's the radius?
Because I cannot tell you howmany people decide they can't do
this job anymore and they wantto quit and then, for the first
time, they're noticing thatthere is a non-compete one and
(04:49):
they're noticing the radius ofthe non-compete.
So there are people who havecontracts with their non-compete
.
They practically cannot work inthat state.
That's how ridiculous it is.
And you may say it's notenforceable, but in this case
it's the hospital system, right,like, even if it's not
enforceable, if they choose that, they want to keep you in court
.
You don't have the pockets tostay with them in court, even if
(05:12):
they're not going to win, soyou lose because you just don't
have pockets deep enough, right?
So, anyway, what is thenon-compete?
Is there an IP clause?
I have seen everything.
To anything you do outside ofhere, we own forever.
I've seen all kinds of crazystuff.
Now, you can't do that in thisday and age.
I mean, you may be workingthere, you may have a podcast,
(05:33):
you may work there, you do thespeaking, you write a book, you
do all of these other things.
Like, you can't just take alook, take a look, don't just
sign it.
Remember, you work for you now,right, you work for you.
You work for a company Doctor,you incorporate it, right?
Okay, so you want to look atthose things?
Right, what happens to the tale?
Don't ask after Ask before whathappens.
(05:54):
You might say, oh, but this ismy forever job.
You don't know that.
I hope it is, but the agreementis there.
So if there are disagreements,people can go and say, okay,
this is what we agreed to, right, and so you want to check.
What is that?
What is that?
You want to know what exactlyyou're getting into.
Right, if there is, oh, there'san opportunity to buy in, to be
(06:17):
a partner in all of thosethings, okay, great.
But what are the terms?
Right, like, they have to bethere, okay, all right.
So that's the first thing.
That's the first one is theemployment contract.
Like, don't treat it like, thisis my forever job and nothing's
going to go wrong.
And I hope nothing goes wrong,and a lot of times nothing goes
(06:38):
wrong.
But we don't wear seatbeltsbecause we plan to get into
accidents.
We wear them because we mightand we want to be ready.
Okay, all right.
So that's number one, numbertwo.
Number two is your partnershipagreement, right, so you're in a
practice, you're going to buyin all of that stuff.
You want to look at all thethings, right, what is the buy
in?
What is my responsibility as apartner?
(07:00):
If I decide to leave thispartnership?
How does that work?
Right, how will I be paid?
If they're bringing in newpartners?
What happens to what I have?
If we have disagreements, howdo we resolve them?
Like, you want it all spelledout there and you may say, oh,
(07:20):
but we've been friends sincehigh school.
There's you know, nothing couldgo wrong here.
You don't know that people havebeen friends since they're high
school.
They got married, they gotdivorced, okay.
So what are the terms?
Don't read it by yourself andsay I got this.
No, you don't understandlegalese.
Like, the contract has Englishwords but they're not really
(07:43):
English.
It's a separate language thatuses English words.
It's called legalese, and letthat be explained.
Play out every scenario thatcould be a problem.
Talk to people who've been inpartnerships.
What have the issues been Right?
And you want to make sure thatyou've thought through the
scenarios.
We don't think about it becausethat's what we expect, but
that's what.
(08:03):
That's a smart thing to do.
That's the wise thing to do,right, okay?
The third one would be youracquisition agreement.
So maybe you're in privatepractice and you decided I want
to buy a practice, or maybeyou're not private practice.
Maybe you're a coach and youwanted to buy an app company or
another coaching company.
(08:23):
Or you wanted to buy a companybecause they have a great sales
team and you wanted to acquiretheir sales team, whatever.
And so you're getting thedocuments.
Oh, my goodness, this is not ajoke.
This is a big deal.
You want to get a lawyer.
You want to get a lawyer whoknows what they're doing, like
this is their bread and butter.
You want to find people whohave done acquisitions,
(08:45):
especially in that industry.
You want to get the skinny onit, right, what needs to be in
there?
Okay, is the owner going tostay on?
If they're going to stay on,for how long?
What are they going to do asthey stay on?
Right, is the other team?
If there's real estate, is thatincluded in the deal?
If it's not included in thedeal, because the person wants
to keep their real estate, whatare the lease terms and how long
(09:08):
is it for?
And do you have an opportunityto renew?
Right?
Okay, if you're taking over AR,what does that mean?
If it, like all of it, needs tobe there and you need to do the
due diligence If you're goingto be acquiring businesses, you
have up-leveled your game.
Okay, you've up-leveled yourgame, which also means you need
(09:29):
to up-level your skill.
You need to up-level yourunderstanding.
You need to up your game.
So you may say it shouldn'ttake all that, but it does.
You are going to sit down andyou are going to learn about
acquisitions.
You are going to learn aboutthe pitfalls.
You are going to talk to peoplein the industry.
You're going to sleep, eat,breathe this thing until you
understand it.
There is nothing you've done inmedical school, there is
(09:49):
nothing you've done as anentrepreneur that prepares you
to just go into acquisitionswithout acquiring a new skill
set, right, okay, so that'snumber three.
Okay, so, especially in thesetimes when people are buying
private practices and they justfind out they buy stuff that is
almost useless, right, and it'sdone.
(10:10):
Okay, number four.
Now number four.
Let me switch it.
I'll change number four tonumber five and you'll see why
Number four would be, you know,like a PE, a private equity sale
, like that agreement.
What does it mean?
People have sold theirpractices, ended up working more
(10:31):
, making less and are totallymiserable.
What does it mean?
How long are they asking you tostay on?
What are the terms of youremployment, right?
What are you going back to?
Rvus or X number of patientsper day or whatever?
What is that?
You want to think of life afterthe sale?
What is that going to look like?
(10:53):
You're going to play out allthe scenarios.
You're going to talk to peoplewho've done this and what are
the mistakes you made?
What are the things you didthat you did right?
What if you could do this over?
What would you do differentlyand not with one person or two
people?
You're going to talk to a lotof people, right?
You're going to talk to alawyer and you're not going to
(11:13):
talk to a lawyer who has notdone this right, like you don't
want them to experiment with you, okay, all right.
So that's number four.
Like, don't just do it, don't.
Doctors have been messed up somany times.
Like, I see this a lot.
You know, I've had a fewclients who you know.
Before they came to work withme, they fell into stuff like
(11:33):
this or in Facebook groups.
I would see that and I'm like,my goodness right, acquiring a
business is not a joke.
Selling a business is not ajoke.
Deciding to work for somebodyfor two years is not a joke.
You become it, decides tobecome a partner.
That is not a joke, right?
So, yeah, you want to know.
Okay, you want to know.
The final one is the one thatprobably hurts my heart the most
(11:56):
, and that is your equipmentlease contracts.
Okay, now there are these verysmooth salespeople who know to
target doctors because, for themost part, many of us will fall
for this and I'm recording thispodcast episode hoping after
(12:18):
this nobody does, and mygoodness, if people who are in
plastic surgery, obgyn,dermatology, even family
medicine, because they'll tellthem they can do it, please
share this episode with them.
Everybody, please, with 17cherries on top.
Okay, so the most common one isthe laser.
I hear it all the time like thelasers, oh, this laser, it does
(12:43):
this and this is how much.
You won't even have to buy it,you can just rent it and it'll
be this payment every month,which is usually thousands of
dollars.
And if you only had five people, four people, six people who
would use this service, it paysfor the machine.
It's great.
We will have our marketingpeople like market for you.
(13:05):
So this is really a plug andplay.
They will tell you passiveincome.
Hear me now.
Okay, there's nothing passiveabout that.
The marketing people are notgoing to market for you and I
cannot tell you how many peoplehave payments the size of a
mortgage that they owe for fiveyears and they have not been
(13:25):
able to get more than fivepeople on said machine.
If it seems too good to be truea lot of times it is Okay Now
to start with.
Okay, if you have things inyour practice, this is primarily
private practice.
But if you have things in yourpractice, that man, I need to
work on these things and I know,once I do them, our revenue
(13:48):
will be so much better, thingswill be so much better.
But you haven't been able tobring yourself to do them.
You're tired, you'reoverwhelmed, you're burned out,
whatever.
And this seems very shiny andvery good.
It seems like cold water on ahot Atlanta afternoon, but a lot
of times that's all it is ashiny, right, a shiny.
(14:10):
Now my same lasers are not.
It's not a profitable thing.
No, no, no, that's not what I'msaying.
But what I am starting to sayis, if there are other stuff not
working and you're trying tofix them, if you don't have the
volume, for instance, ofpatients you want to see, this
is not going to fix that,because you're going to need the
(14:32):
volume to create the people whoare going to use the laser,
okay.
So I had a lady who walked upto me.
She's, oh, dr Narm, not makingany money in my practice.
I've been open for a number ofmonths, I'm not having people
come in and all this stuff and Iwent for this conference.
I was approached by this lasercompany.
They said, if I could just dothis and if I get only four
(14:52):
patients a month, that theywould.
They will cover the cost of themachine and all of those things
.
And I'm like, how much is it?
And she's well, with thepayments and everything will
come to a total about $450,000.
I'm like you're not even makingpayroll, like you're not, like
(15:12):
you don't even have patients andyou want to acquire a whole
mortgage so you can get thesefour imaginary patients from who
knows where to meet the cost.
Like, and so it's not yourpurpose to meet the cost to pay
for the machine.
What of the overhead?
What of your profit?
I'm like, what are you doing?
(15:33):
Right?
And she didn't sign up for it.
So I'm kind of super happy forus.
Like, I just saved you half amillion dollars.
Like you owe me forever, right,thank you, but don't get sucked
into that stuff.
Sure, it makes sense.
I'm a big fan of observing thepace of grace you just started,
(15:55):
or you're at a point where youjust, whoof, just became
profitable.
I'm not taking $500,000 in debtto for a thing that you're
telling me.
This is what I need to do tocover the cost of it.
I would say and I'm apediatrician, so nobody's come
to me for this but I would say,well, if you're going to give me
an out right, like if thisdoesn't work, if I'm not able to
(16:19):
get the number of patients thatI need, then I can give you 30
days notice and send yourmachine back.
Well, guess what?
Nobody's gonna do that.
They're not doing that.
They're not doing that.
I am telling you I can't count.
I can't count the number ofpeople who have these things
sitting in their offices doingnothing.
Okay, so maybe I'm saving you$400,000.
(16:41):
I don't know right, but justlook at it, pay attention to
yourself and pay attention to itand ask yourself do I already
have the demand for this?
No, okay, I have to create thedemand for this.
What is the opportunity cost ofcreating the demand for this?
(17:02):
I have to stop creating thedemand for the other things.
I say hello, okay, if thisdoesn't work and I'm stuck with
the $400,000 bill with no ROI,am I willing to do that?
And the answer is no, then youranswer is no right.
They can give you a loaner andyou can do a trial.
(17:22):
They can give you an out, butthey don't give them out.
They don't give them out.
I can't tell you how manypeople they just paying for it.
So now they're seeing patientsto pay for a machine they're not
using.
So am I saying, don't get amachine?
Of course not.
I'm sure there are people whoare using it and they're making
a great ROI off of it.
(17:44):
But this is the thing.
Look at the contract, look atwhat it says, understand what it
says and decide if you want todo that or not.
Okay, don't stay in La La Land.
They will tell you, they willmarket and all of that.
You can ask them.
If you're so sure about that,okay, put it in writing.
Put it in writing that you'llmake sure I have at least four
patients every month.
I will do the work, but atleast I'll cover the cost of the
(18:04):
machine.
They're not going to do that.
You know why?
Cause they're not going to dothat, cause they're not going to
market, cause they're not goingto take responsibility for that
.
So the question is okay, if Iknow I have to take
responsibility for the marketing, will I do it?
And if the answer is no, thendon't do it.
Okay, I know I went a littlebit of a rant there, but I
cannot tell you how many.
I am telling you send this tothe doctors in your life.
(18:24):
You'll be saving people half amillion a pop, okay, but the
bottom line is this we need tobe smart.
Okay, we are business owners.
Even if you work a job, youwork for a doctor you
incorporate it right.
If you're working in amulti-semitre figure business, I
mean like you're a boss, you'rea business owner, you're savvy,
you do.
Your signature is worthsomething.
(18:45):
You don't just put yoursignature on any document before
you do that.
Understand that thing's atstake.
Okay, so I'm going to have adoctor, look at it.
I'm going to have conversationswith people who've done it
right Not people who haveopinions, but people who've done
it.
I'm going to ask them whattheir mistakes, what they wish
they did differently, and all ofthose things.
I'm going to have realconversations before I put this
(19:06):
precious signature of mine onany document, any, okay, all
right, so that's what I have foryou, that's what I got for you.
And if you're here and you'rean employer I know we talked
about employment agreements youalso want to make sure that all
the terms, all the things you'rethinking about in your head.
(19:27):
They made it to the document,right?
Like, for instance, I've hadpeople go there upset, the
doctors are working with them,don't want to do a call, but
there's nothing in the documentthat said anything about call.
There's nothing document.
That's like whatever you want,put it there, put it there.
This is serious stuff.
Okay, this is where weinterface with the legal world.
This is serious stuff.
(19:48):
Okay, so from today, we nolonger just put our signature
anywhere.
Okay, from today, we no longerlook at a document, take it at
face value.
We play it out.
If this were to happen likethis, what does that mean?
Cause, when you look at thelegal document, you will see all
the things that say oh, if youdon't keep your part, this is
what's going to happen.
They're clear on what they want.
Are you clear on what you want?
Okay, so let's do that andlet's start signing agreements
(20:11):
with more intelligence andintentionality and clarity,
right, and not just throw oursignature at stuff.
Okay, your signatures were toomuch at this point, all right.
Okay, so best thing you can dois share this episode with
another doctor.
I'll see you on the nextepisode of the Outstanding
Podcast.
Okay, so let's get started.
Hey, if you love listening tothe EntryMD podcast, I want to
(20:35):
invite you to join EntryMD ondemand.
It is my signature subscriptionprogram that gives you access
to a library of business coursesdesigned to help you do one
thing as a physicianentrepreneur, and that is to
thrive.
Just head out to EntryMDcom,forward slash on demand, and I'd
love to have you join us.
See you on the inside.
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