Exam Preview for 20494: Be Your Own Boss: 5 Tips for Successfully B

Be Your Own Boss: 5 Tips for Successfully Buying an Audiology Practice

Please note: exam questions are subject to change.

1. When evaluating whether to buy a practice or start one from scratch, which of the following are the most important aspects to analyze? number of patient files & commuting distance availability & return on investment seller's reputation and parking availability financing options and commuting distance
2. When buying a business, what type of advice should you seek? legal financial Both A & B None of the above
3. What is the most common reason for a small business to show very little profit on the tax return? Most small businesses are managed to reduce their tax liability Most small businesses are not profitable Most small businesses are managed to increase their tax liability Most small businesses transfer the profits to the owner's personal tax return
4. When considering buying a practice, what should you look for when analyzing the practice's tax returns? Expenses that don't directly relate to the operations of the business Expenses that a new owner will not incur Expenses that you can cut when you take over the business All of the above
5. Which of the following is a warning sign to look out for before you buy a business? Consistent, year-over-year growth Inconsistencies in financial statements Diversified sales mix with most patients paying cash Accurate and consistent KPI management
6. Why is a practice with a strong concentration of third-party reimbursement less attractive than a practice with a high percentage of private pay patients? Risk of reduction in reimbursement Delayed payments from third parties Time and expense required to bill third parties All of the above
7. When establishing Key Performance Indicators for a practice, what is the recommended target binaural rate? 60% 70% 80% 90%
8. One advantage to starting a business from scratch rather than buying an existing practice is: you can control your investment dollars (lease, equipment, etc.) you can more easily generate income immediately you have a steady stream of income and patients from day one there is no risk, financial or otherwise
9. When evaluating a practice's location, what is the most important factor to consider? Proximity to your home Length of commute Demographic trends for the local market Physical appearance of the office
10. Why should you be concerned about a business that demonstrated above-average growth in the last year prior to selling, after many years of stagnant sales? You should not be concerned because any growth is good Because the owner may have taken action that has a short-term positive effect on sales at the expense of profitability or long-term growth Because the owner is obviously cooking the books Because you should only purchase a business that has flat to negative growth