How to grow yourself a veterinary practice buyer
When it comes to selling a successful veterinary practice, most owners are still looking to sell to an associate. A full 65 percent of owners of high-functioning hospitals studied in Benchmarks 2010: A Study of Well-Managed Practices said they planned to sell to a current or future associate. So identifying and helping a newer doctor to take the reins of a practice is a crucial task for today's owners.
If you're an owner, you may wonder how long the process should take and what gets done when. Benchmarks study author Denise Tumblin, CPA, president of Wutchiett Tumblin and Associates in Columbus, Ohio, and a Veterinary Economics Editorial Advisory Board member, has suggestions—and a handy timeline you can download at http://dvm360.com/saletimeline.
1. Evaluate your practice value. Tumblin recommends an independent valuation every three to four years. Each time you do this, take the opportunity to build an action plan to improve the value in the coming years, especially in the years immediately preceding a potential sale.2. Determine "must-have" traits for your future buyer or partner. High on the list should be a sense of purpose in the profession and practice ownership, strong people-development skills to build and keep a strong team, and the ability to delegate. "Delegation helps create a climate of trust and collaboration and motivates people in their work," Tumblin says.
3. Mentor your associate. Help your associate cultivate his or her professional interests, and allow him or her to take charge of certain management duties. A mentoring relationship is usually initiated by a mentee, but there's no reason you can't "feel out" current and future associates about their interest in practice management and ownership. This goes hand in hand with the next step.
4. Create a development plan for an associate interested in buying. Once you've found a talented associate interested in ownership, help him or her learn the ropes. The five areas of management include client development, employee development, medical development, financial management, and facilities, equipment, and technology management. "Medical development is often the first area an owner delegates to an associate interested in ownership," Tumblin says.
5. Develop a timeline for your sale. Every sale is a little different, but you can start with the timeline pictured above and online at http://dvm360.com/saletimeline. Think about how you'll spend the months and years before a practice sale. Work to slowly integrate your associate into employee management, finances, and medical protocols. It will make a huge difference in your associate's success and help you leave behind a strong hospital after your retirement.
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