Practice Sales

Veterinarians typically sell their practice when a life event happens.  That life event may be health related, financial reason, or you have just reached the age where it’s time to retire and spend some quality time enjoying your family and life.  Whatever the reason may be there are several things you can work on that will make your practice more appealing and will help you and your family prepare for a practice sale.  Here are a few items to focus on:

Freshen up your practice – Buyers like to see a fresh, clean and somewhat updated practice.  That does not mean you need to do a complete remodel and spend a $100,000.  It does mean you need to take a look at your flooring and your walls.  If you have large holes in your wall or your flooring was leftover linoleum from World War II, you should fix the holes and put in new flooring.  Talk to your landlord, sometimes they will help with the cost.  If you have equipment that is held together by the “fix everything” duct tape, contact your local equipment rep and have it fixed.

Update your technology – We run into an occasional practice owner that considers indoor plumbing as new technology.  If you are in that category, or if you have not done any technology updates since Richard Nixon was president, you should look into digital x-rays and other technology that will not only appeal to buyers but will help you increase your production in the practice.  Contact your equipment rep for the latest and great technology.

Financial Review – Have a meeting with your financial planner or advisor to see where you currently stand with your retirement portfolio.  This will help determine how soon you can possibly retire, how much more you may need to put away to retire and/or how much you need to get out of your practice sale in order to retire. 

Practice Valuation – You should get a valuation done on your practice.  This will help your financial planner and you see where you stand with your entire portfolio.  Some doctors rely heavily on their practice sale to be a piece of their retirement nest-egg, so if you don’t know what your practice may be worth, you don’t know what size of nest-egg you have.  Call Omni for a free snapshot valuation. 

Clean up your books – If you have been aggressive in running expenses and other items through payroll, you should work on making sure the books are clean.   If you have multiple practices, but run all of your income and expenses through one tax id number, you should ensure you can separate the income and expenses of both practices.   Meet with your CPA to analyze your numbers and see if you are in line with industry averages.

Grow your practice – One of the worst things you can do is take your foot off of the gas pedal.  If you want to maximize the value of your practice, keep production at least level with prior years.  A growing practice sells quicker and easier than a dying practice.   If you don’t know how to grow your practice and make it more sellable, contact a consultant, or have a practice assessment done.

These are just a few items that you can do to help prepare your practice for a sale.  If you work on these items now and over the next 3 years, you will maximize your practice value, enlarge your pool of potential buyers and be able to sell your practice quicker.  ​

Whether you are approaching retirement age or just thinking about a transition, there are several things you can do to prepare your veterinary practice for sale.  Doing these things may help eliminate headaches, increase your sales price, or reduce your costs.  Here are a few tips:

1.  Assess your equipment.  Upgraded practices sell faster.  If you are more than five years away from retirement, I recommend a few upgrades such as recover your chairs if needed and freshen up the paint.  If you want to sell in less than five years, stick to the paint and carpet because you will not get the tax benefit of major upgrades.
2. Clean up your accounts receivable.  Reimburse patient credits, collect old accounts and keep the A/R current.
3. If you have an associate, make sure you have an associate agreement with a non-compete.
4. If you have an employment agreement with your corporation and you are a C-Corporation, you may need to terminate yourself a few years before retiring.  Consult your tax accountant.
5. Consult your financial advisor and tax accountant.  How much do you need to retire?  How much do you have?  What are the tax consequences?
6. Get a practice valuation to see what proceeds you will get from the sale.
7. Be realistic in the time it takes to sell.  In remote areas, it can take a year or two.  Metro areas, much less.
8. Keep your production up as you near retirement.  I see veterinarians slow down all the time in their last few years.  Work the same number of days.
9. Assess your staff.  Do you have too many staff?  Do you have one that should have been let go seven years ago?
10. Have a practice assessment performed by a qualified consultant.  Many will do it for free or a small fee.  This may help show you some areas to improve over the next few years.

By focusing on these items in the coming years as you near retirement, you will avoid having your practice production and the price of your practice go down in your later years.  Call me for a free consultation.  I would be happy to take a look at your practice and give you my thoughts.  Or, if you are thinking about transition right now, I have a database of buyers looking in your area. 877-866-6053 ext. 2.

Here are 10 Things To Do To Prepare For A Transition
​By Rod Johnston, MBA, CMA and Jim Vander Mey, CPA, ABI

You have had a great career and now you are thinking about selling and transitioning out of your veterinary practice. You would like to get the best value for your practice. Do you just walk away?  Being prepared can not only help you get the best price, it will help ensure a smooth transition.

Here are a few things you can do to help prepare for your veterinary practice transition:

1. Know your Financial Situation – Meet with your financial advisor, CPA, or whoever gives you financial advice to get a good picture of where you are with your savings and investments.
2. Get a Practice Valuation – A practice valuation will help you see how much equity you have in your practice.  Additionally, a CPA can help you figure out what the taxes and net proceeds from your sale will be.
3. Update Technology – Buyer’s like to see new technology in a practice.
4. Cosmetic Updates – Have you updated the interior with paint and carpet in the last 20 years?  If not, it’s time.  Buyers like a practice with a fresh feel to it.  A 1970’s feel was good in the 1970’s.
5. Review Accounts Receivable Aging – Collect any past due accounts, send to collections or write them off.  Also, review credits to either pay back to the patient or send unclaimed property to the State.
6. Review Staffing – Are you over or understaffed?  Adjust accordingly.
7. Clean Up your Financial Statements – Make sure the expenses you’re running through your veterinary practice are related to your practice, or at least identifiable as an adjustment.
8. Consider Ramping Up Production – If you are not sure how then hire a veterinary consultant.  Ramping up your practice when you’re 3 or more years out will pay dividends on the sales price.
9. Review Your Fees – Do you have the lowest fees in the area?  Consider a fee increase to catch up.
10. Harvest your Equity – Maybe you are a few years away from retirement but tired of being an owner.  You should consider selling now, take the equity out of your veterinary practice and work back as a veterinary associate.

We’d be happy to answer your questions, give recommendations, and talk through the process of your transition. Contact us if you’d like to get together for a free consultation and a cup of coffee or lunch. Email info@omnipg-vet.com or call 877-866-6053.

​You have had a great career and now you are thinking about selling and transitioning out of your veterinary practice. You would like to get the best value for your practice. Do you just walk away?  Being prepared can not only help you get the best price, it will help ensure a smooth transition.

Here are a few things you can do to help prepare for your veterinary practice transition:

1. Know your Financial Situation – Meet with your financial advisor, CPA, or whoever gives you financial advice to get a good picture of where you are with your savings and investments.
2. Get a Practice Valuation – A practice valuation will help you see how much equity you have in your practice.  Additionally, a CPA can help you figure out what the taxes and net proceeds from your sale will be.
3. Update Technology – Buyer’s like to see new technology in a practice.
4. Cosmetic Updates – Have you updated the interior with paint and carpet in the last 20 years?  If not, it’s time.  Buyers like a practice with a fresh feel to it.  A 1970’s feel was good in the 1970’s.
5. Review Accounts Receivable Aging – Collect any past due accounts, send to collections or write them off.  Also, review credits to either pay back to the patient or send unclaimed property to the State.
6. Review Staffing – Are you over or understaffed?  Adjust accordingly.
7. Clean Up your Financial Statements – Make sure the expenses you’re running through your veterinary practice are related to your practice, or at least identifiable as an adjustment.
8. Consider Ramping Up Production – If you are not sure how then hire a veterinary consultant.  Ramping up your practice when you’re 3 or more years out will pay dividends on the sales price.
9. Review Your Fees – Do you have the lowest fees in the area?  Consider a fee increase to catch up.
10. Harvest your Equity – Maybe you are a few years away from retirement but tired of being an owner.  You should consider selling now, take the equity out of your veterinary practice and work back as a veterinary associate.

We’d be happy to answer your questions, give recommendations, and talk through the process of your transition. Contact us if you’d like to get together for a free consultation and a cup of coffee or lunch. Email info@omnipg-vet.com or call 877-866-6053.

We occasionally hear that the future of solo dental practices is bleak.  They will eventually be extinct like the Golden Toad (look it up).  Corporate dentistry is growing and going to drive out the solo practitioners.  My personal opinion is that I don’t think this is true.  I believe there will always be a need and a demand for the solo/non-corporate practice.
When I talk about corporate practices, I’m primarily speaking of the non-dentist owned corporate practice.  There are dentist owned practices where a licensed dentist owns 3, 5 or more practices.  He or she has full and legal ownership of their practices.   I call these small group practices.  Corporate practices tip-toe down the legal sidelines of practice ownership by having a dentist own the clinical aspect of the practice, called Dental Services Organization (DSO) and the non-licensed dentist corporation owns the non-dental management aspects, called a Management Services Organization (MSO).  Note that this structure can also occur in small groups, but in the small group, a licensed dentist owns both the MSO and DSO.  The large corporates include Aspen, Gentle Dental, Pacific Dental Services and others.  Both solo practices and corporate practices have their pros and cons from both a patient perspective and from a dentist perspective.
As a patient, I prefer to know who my dentist is going to be when I go into the office.  I want to build a relationship with him or her and want my dentist to know the history of my dental care — and a little bit about me as well.  In a corporation, you might get the same dentist the next time you go in, but there’s a good chance it will be a different dentist.  Small groups lean more towards a solo practice and you will have a reasonably good chance to get the same dentist in the well run small groups.
From a dentist perspective, most dentists do not want to be told what treatment to focus on, what supplies to use, etc.,  The majority of dentists surveyed by the ADA still have a dream of owning their own practice, being their own boss, making their own decisions.
Recent court decisions in New Jersey, Allstate vs. Northfield, sided on the side of dentists.  It may begin to set the tone to start scaring away the non-dentist corporate owners.  Washington State has been trying to pass a bill to allow non-dentist owners and so far has been successful.  If you’d like to read an article on the New Jersey case, you can read it here.
So, if you have been holding off on not buying a practice because corporates are going to drive solo practices away, think again.  There will always be a need and demand for a solo practice.  Court cases like Allstate vs. Northfield will help ensure non-dentist owned practices stay away.  Join the practice ownership club today!