# Practice buy-in

Buying a share of an existing practice from its owners to become a partner.

The price is a share of the practice's value and the formula lives in the partnership or [operating agreement](https://searchspheresource.com/glossary/operating-agreement), which usually prices the buyout when a partner leaves by the same arithmetic, so the exit clause is read before the entry price is argued. It is paid from a practice loan, out of future draw (a reduced salary standing in for cash, which the trade calls [sweat equity](https://searchspheresource.com/glossary/sweat-equity)), or a mix. What the stake carries matters as much as what it costs: a share of profit, a vote, and a claim on the receivables and the [goodwill](https://searchspheresource.com/glossary/goodwill), or only some of those, and the agreement is the only place that says which.

In numbers: A three-dentist group valued at $4.5M sells a one-third stake to its associate for $1.5M, financed with a practice loan the associate repays from their partner draw; the agreement's buyout clause prices a departing partner's stake by the same formula.

Source: https://searchspheresource.com/glossary/practice-buy-in
Not dated: A definition is editorial: what a term means, why it matters, and an example. None of it reads a source that can go stale, so there is no date to take and a stamped one would be the build time wearing a costume.

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