Legally, a partnership is simply defined as an agreement between two or more individuals. It does not mean that you are rich, and it does not always mean that you are in control; everything depends on the profitability of the GP practice and the relationship with the other partners, as set out in the Partnership Agreement (formally called Deed of Partnership).
Earnings for GP partners vary per practice. Profitability, and therefore partner earnings often depends on the make up of the local population and its needs, as well as how active and astute the partners are at developing their "business". On average, a GP partner takes home approximately £110,000. The lowest figure is in the South West (approx.£100,000) and the highest is in the East of England (£120,000).
Released figures also show that partners in practices where there are 6 partners or more earn approximately £20,000 less than partners in small practices.
The answer is: "It depends on a lot of factors".
One of the largest costs is the building itself. If the practice leases it premises then there are no capital costs associated with the building. However if the practice owns the building there will be most likely be a loan to finance the purchase and you will be ask to contribute towards it. If this is the case, you must make sure that the building has been properly valued and you might in fact need to commission your own valuation to ensure that you are not investing into a property that will make you lose money from the outset. Because loans are typically over a period of 25 years, you must make sure that you fully aware of the way interest is being charged and particularly whether the rate is fixed or variable.
Another sizeable portion of the cost is your contribution to the working capital of the practice. Essentially the current partnership has money in the bank account, money was spent to buy stock, furniture and other fixtures, and since you will be sharing everything, you need to buy your share of it. Typically this represents a sum of approximately £6,000, but a dispensing practice could have a much higher working capital. Enquire also as to whether you will be required to provide the full amount upfront or whether you will be allowed to build up to it. This could make a significant difference to your cashflow.
Different partnerships treat their newly recruited partner in different ways. Some consider the new partner a full partner from day one, whilst others consider that the new partner is likely to contribute less in his/her early years and therefore allocate them a lower share of the profits at the start. Over a period which can last up to 3 years, the new partner then slowly increases his share of the business to reach parity i.e. to be treated as a full partner. For example, a partnership may only offer you 80%of your normally expected full share in year 1, 85% in year 2 and 90% in year 3 and 100 % thereafter. This is an important issue to consider when you apply for a partnership, because this will dictate your income for the first 3 years.
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