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As a veterinarian, the decision to sell your practice can mean a mix of emotions and a very long to-do list, but it can also result in satisfaction and cash flow with which to start your next venture in life.
Starting your first veterinary practice is no easy feat. You put a lot of time and energy into it, whether you bought into an existing business or built it from the ground up. And you poured yourself into gaining clients and patients.
When it comes time to sell, it makes sense to put in due diligence to ensure you’re getting a fair price after all the work you put into growing the business. Here are a few things to consider…
The Decision to Sell
Maybe you’re ready to retire. Maybe you’re ready for a change in career path, such as going back to school for a specialty, starting a larger hospital, or trying a new career altogether.
Maybe your spouse got a job out of state, or you want to spend more time at home with your children. Or maybe you’d just like a break from all the responsibilities of owning a business.
Whatever the reason, you’ve decided that it’s time to sell your first practice. This isn’t necessarily an easy decision, especially since your first practice represents a lot of hard work and many special memories.
So, it’s only natural to take your time.
Mull it over.
Build lists of pros and cons and goals for the sale.
And discuss it with non-work friends and family that you trust.
Creating a Gameplan
Once you make the decision to sell, the next step is to create a plan.
The first decision is probably when to sell. Of course, this isn’t entirely within your control, as it will depend on when you find a buyer.
But to start, do you want to sell right now?
Or, are you planning ahead for five years from now—and investing to grow the practice’s value in the meantime?
Are you hoping to stay on at the practice a few more years, even if it’s just part-time? Or are you planning to exit after the sale?
If you had your preference, who would you sell to?
Maybe there’s an associate at your practice who’s interested in ownership and could work up to it over the next few years by buying in gradually. And maybe you have a strong preference for a private buyer versus a corporate buyer.
While there may be some need for flexibility depending on the offers received, it’s good to have goals in mind to help steer your decisions.
Also, how much money would you like to make in the sale? This is probably the hardest question. In addition to the need to carefully consider personal, ongoing financial requirements, many practice owners find it difficult to guess what their practice could actually sell for.
That’s not surprising, considering that the calculations are very complex. The old way of thinking (i.e., one year’s gross income) is often not accurate.
Fortunately, there are many professionals who can help with these specialized aspects of the sale.
Gathering Your Team
As with any other professional venture that requires expertise, it’s good to consult specialists in each area of the sale. This could include…
A practice/valuation consultant.
A CPA.
Attorneys (for business, real estate, etc.).
A broker (if needed—in general, they are of the most value when finding a buyer is challenging).
Any other experts that could be helpful.
These professionals can help with a myriad of issues—everything from minimizing taxes paid on the sale, to advising on provisions such as a non-compete clause for current employees (something that can affect the perceived value of the practice).
Be sure to ask about their charges, but don’t be scared to pay a reasonable rate.
As tempting as it is to save money and try to do everything yourself, these experts can really save a lot of headaches and prevent costly mistakes.
Many vets prefer professionals who charge a flat fee rather than a percentage of the sale, but this depends on your inclination and the specifics of your sale.
Taking Care of Your Staff and Clients
Many experts advise not talking to your staff about the sale until the paperwork is finalized. The worry is that, although a sale may take years, team members may grow worried and begin to look for another job.
However, when the time comes, it’s a good idea to spend time discussing what they can expect. Inform them of your confidence in the new owner, and answer questions if you can (although don’t guarantee anything such as job security unless you know for sure).
So far as your patients and clients, you have probably grown close to many of them.
A letter or email sent to current clients, informing them of the change and your confidence that they will love the new doctor/management, can do a lot to help them during the transition, as well as set up the new practice owner for success. Some clients may also wish to say goodbye before you leave.
What’s Next?
It can be normal to have a period of feeling lost or even grieving, after the sale of a practice.
After all, it’s a big change.
You’re probably excited for whatever comes next. Or, if you haven’t found your next venture yet, spend some time exploring your curiosities and interests.
Do things that light you up, and eventually, you’ll figure out what’s next for you.
While selling a practice is no easy feat—just like starting a practice wasn’t easy—it can also be a rewarding experience.
Hopefully, the sale will help fund whatever is next for you in life, whether that’s a new professional venture or a more relaxed pace in life.
Either way, you can always look back with satisfaction on what you created, and all the pets you helped along the way.
Written by: Dr. Tammy Powell, DVM