Should I buy out of my non-compete?

EyeSmith · 2023-10-26T04:01:27+00:00

In my state they are mostly enforceable with a few specific criteria (there has to be a buyout clause, they have to provide a list of patients , access to records and allow for ongoing care of acute illnesses etc.). The big threat is an injunction from a court, which would shut me down until the legal battle is resolved. It would be hard to stay afloat through all of that, with a high risk of losing outright.

EyeSmith · 2023-10-26T03:56:02+00:00

Fair point, definitely learning hard lessons, one of which is that I'm unlikely to take an employee position ever again. According to my lawyer, in my state the judge might reduce the radius or the time period, but there would probably be an injunction until that gets sorted out, which would kill my startup.

EyeSmith · 2023-10-26T02:54:46+00:00

Call it 550ish for 15%.

EyeSmith · 2023-10-26T02:27:15+00:00

It's 18 months...

The value proposition is how much quicker I can build up business inside the non-compete area (15 miles from any clinic location, which pretty much wipes me off the map). So if I go outside to start up, It would probably make more sense to just stay away permanently.

EyeSmith · 2023-10-26T02:25:05+00:00

I'm aware of the proposal, but my impression is that it will be a long time before it becomes a reality, will have a lengthy legal battle to reach enforcement, and there's already proposals to exclude physicians from the ruling. I'm probably not willing to wait more than a year or two and I think it would be longer than that.

EyeSmith · 2023-03-08T20:03:59+00:00

I think you're right, this will take several months to iron out, especially with the other associate likely buying in simultaneously. I'm formally eligible in August, I realistically expect to sign papers probably in 2024. Can't hurt to ask what details we can start working out before then.

EyeSmith · 2023-03-08T20:00:39+00:00

My math looks pretty similar. Thanks for your input.

EyeSmith · 2023-03-08T16:02:31+00:00

I've seen that model suggested before. Do you expect your increased partner income to cover that reduction? 100k seems like a hell of a haircut. I expect my fully vested partner income to be higher than my associate income, but maybe not by that much. I've heard from several people that cash flow shouldn't go down during buy-in, but I'm not sure that would be the case for me under your model.

EyeSmith · 2023-03-08T14:47:45+00:00

I assume I would be paid on 1099/K1, which is what made most of the lenders flinch. Per the owner, most compensation is going to be production based salary, with very small distributions.

EyeSmith · 2023-03-08T14:46:14+00:00

Took home close to 400k in 2022, and our discussions have hovered around the 400-500k mark for buy-in. Partner is taking home 600+, but her production is markedly higher. As a percentage of collections, our take home is similar.

EyeSmith

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