To merge—or not to merge

To merge—or not to merge

source-image
Jul 01, 2006

What are the possible pros and cons of merging two practices?

"Theoretically, mergers make sense," says Lorraine Monheiser List, CPA, MEd, a consultant with Summit Veterinary Advisors, LLC, in Littleton, Colo. "There are several pros that are largely financial. Yet cons, mainly related to staffing issues, deter some owners." Here's more:

Pros

  • Lower costs because you can remove duplication of basic equipment and supplies. You could also see price breaks when buying drugs and supplies in larger quantities.
  • Access to better technology. Merged practices can afford to buy—and share—expensive lab or diagnostic equipment.
  • Efficient use of space. If one practice has excess space, merging with a practice that needs space can offset the cost of maintenance. If both are squeezed tight, moving into a larger facility together is less risky than either doing it alone.
  • Reduced need for relief veterinarians.
  • Competitors become compatriots and can offer higher quality services at higher prices.


Lorraine Monheiser List
Cons
  • Owners must share control which might be difficult for independent-minded practitioners.
  • Change is hard. Without good planning and effective communication, team members can feel threatened or fearful during the transition.
  • Consolidation. If each practice has a manager, head technician, or receptionist, will the merged practice need both? Who stays and who goes?
  • Mergers can be expensive. Determining the relative value of the practices requires two separate valuations. Plus, you must have well-drafted legal documents.
  • Practice cultures vary. If one owner maintains tight control while the other delegates, then the merged team members may have different expectations.

Hot topics on dvm360

Dog of Dallas Ebola patient will not be euthanized, authorities say

Health officials have quarantined and will monitor dog and amid concerns surrounding deadly virus.

Video: How to perform a belt-loop gastropexy

Prevent GDV in your at-risk patients with this simple technique.

Stretch your skills to earn more in veterinary practice

Finding new tasks could be the key to generating more income for your practice—and boosting your pay.

Veterinary community stunned by Sophia Yin's unexpected death

Prominent veterinary behaviorist died of suicide Sept. 28.

Study shows sustained salary slump for veterinary support staff

Since 2009, technicians paid by the hour have experienced a bump in pay, but pay for other team members has stayed stagnant, according to data from the 2014 Firstline Career Path Study. Here’s a look at changes in team pay from 2009 to 2013.