Today's Veterinary Business

JUN 2018

Today’s Veterinary Business provides information and resources designed to help veterinarians and office management improve the financial performance of their practices, allowing them to increase the level of patient care and client service.

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You might find that your asso- ciates do an end run around you and try to negotiate a contract with the buyer. Your Work Commitment Rarely do corporate buyers have other veterinarians waiting to step into your practice and replace your veterinary production. Expect to remain with the practice for one to three years after the sale. For single-doctor practices, the com- mitment can be even longer. This means you need to sell to a cor- porate consolidator several years before you plan to retire. Your Job Description Smaller corporate consolidators, as well as those outside the industry, might not have the infrastructure to manage your practice from a distance. Unless the company owns several other practices in your region, there might not be an area manager available to devote time to your hospital. If this is the case, you might have to keep your cur- rent management responsibilities. If you want to get out from under these responsibilities and "just be a veterinarian again," understand whether this goal is realistic given the terms of the sale. Your Compensation and Benefits Sellers often are at a point in their careers where they can pay them- selves well and enjoy company-paid benefits such as health insurance for the whole family, a personal vehicle or season tickets to the hometown team. Owners typically attend as much continuing education as they like and allow themselves plenty of vacation time. Many retirement plans are designed to allow the owners to make large contributions to their personal accounts. Understand that your com- pensation and benefits after the sale are unlikely to be as generous. While both are likely negotiable, you will see a tradeoff involving the purchase price and how you are compensated after the sale. Facility Rent Corporate consolidators want to buy veterinary practices, not real estate. If you own the real estate in addition to the practice, expect to enter a long-term lease at market rate or even slightly below market rent. You might be paying your- self higher than market rate rent in order to receive personal tax advantages, but do not expect the consolidator to continue doing this. If the consolidator agrees to pay higher facility rent, it will expect a reduction in purchase price. Final Advice Getting a good deal for your hospi- tal involves more than just the sales price. The sales terms could have an impact on your personal finances and lifestyle for years afterward. If you are considering selling your veterinary practice to one of the more than four dozen con- solidators active in our industry, it pays to talk with several com- panies to learn not only what qualities they look for in a target practice but also what expecta- tions they place on the seller after the transaction. Whittle the list to your three top candidates and work with them to determine how well you and your practice fit into their definition of an ideal partner. Understand the differences related not only to the price but how the deal would be structured for tax purposes, and understand what contingencies are in place. When you receive an offer, pay close attention to what is being of - fered beyond the sales price. While everyone wants a high sales price, the devil is in the details. Work closely with your advisers to under- stand the expectations and conse- quences of accepting an offer. The best deal might not be with the highest bidder. Money Matters columnist Leslie A. Mamalis is the owner and senior consultant at Summit Veterinary Advisors. Learn more at www.summitveterinaryadvisors.com. JOIN OUR PACK! Banfi eld.com/about-us/ hospital-acquisition Find out more! Banfi eld Pet Hospital is looking to acquire strong general veterinary practices! Joining the Banfi eld family means providing exceptional care to clients while being able to off er impressive perks and opportunities to your team. 5 6 4 7

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