Demographics tell us that over the next 10 years approximately 10,000 veterinarians will be transitioning from active practice, and many of these doctors are practice owners. That fact raises the question: Who will be the future owners of their clinics and hospitals?
Selling your practice: Multi-doctor vs. single-doctor
If your practice has multiple veterinarians on board, you’ll likely have more than a few interested suitors, so marketing the opportunity shouldn’t be a challenge. Instead, you might find yourself spinning your wheels and using a large amount of time and energy trying to evaluate and communicate with those interested in buying your practice. (This is a topic for another article.)
But, what if you’re the sole owner and operator of your practice? Who will step into your shoes and purchase your practice? While you might want a more definitive answer than “it depends,” you probably won’t get one because it truly does depend on a number of factors:
- Is your practice profitable with strong cash flow and increasing revenues?
- How does the financial performance of your practice compare to other practices?
- Where is your practice located? Is it in or near a thriving metropolitan area? Or, do you serve a rural community?
- After selling your practice, will you be willing or able to work as an associate? If so, for how long?
Thinking from a buyer's perspective
If you were seeking to acquire a practice what would you look for and why? As a buyer, what would attract you? What would your deal breakers be? In order to market your practice to people who are seeking hospital ownership, the opportunity must fit into the vision of the potential successor. What might the successor to a sole practitioner be seeking? Ask yourself the following questions:
- Who are you marketing to? Who is your target audience?
- What is your target audience looking for? What do they need?
- Does your opportunity provide what your target audience needs?
Setting yourself up for a successful transition
Once you know what your potential buyers are looking for, you must take an honest look into your practice’s strengths and weaknesses. What steps can you take to make the incremental improvements that will improve the financial position of your practice and its potential marketability? How much time do you have before you hope to move on to the next chapter in your life, and can you realistically complete the practice improvements you’re hoping to make in that timeline?
Best position yourself in your transition by allowing adequate time, thoroughly planning, and taking an honest look at the state of your practice. Once you’re living your next dream, you’ll be glad you did.
ABOUT THE AUTHOR
Joseph Hruban is a transition consultant and veterinary practice and real estate broker. He is the author of the book, Where Have All the Corporate Veterinary Practices Come From? Learn more about Joseph on his website: dvm-transitions.com.