The personal experience of a dedicated veterinary practice owner
So you’ve toiled away for 20 years and built the practice to be busy, and at times, a chaotic business. You’ve purchased rental properties with the income and financially supported your family (if your partner has stuck around and raised the kids by themselves). You’ve tried to sneak away for short holidays with the family (especially when the kids were little), but every second year the vet that you thought was good enough to finally able to leave for a day or two alone to run the clinic, has left again. And the job advert has only resulted in two applicants, neither of which are ideal, so it’s back to you and the part-time vet.
Your partner is always talking about you slowing down and now your long time nurse is having a family and leaving. And the two vets you have previously spoken to aren’t at all interested in buying into the business. Reason given: “why would I want to work as hard as you?”.
So, you’re a bit down. But you “are what you do”. You’re a good vet, maybe not a specialist, but you have great clients, many of which you regard as friends, and the team is great. And you like what you do every day – speying cats is relaxing!
You start to think about selling the business, but there doesn’t seem to be anyone to sell it to. And you don’t want to be like the GPs who just walk away because they can’t sell their practice. But all the other professionals (dentists and some Drs) are selling to corporates or merging.
And so it begins!
Initially, the purchase offer looks amazing – I mean no-one would pay that for the practice other than a corporate. And they’ll give you access to technology, other human resources support, potential bonuses, time off, nice salary, and you only have to stay for two years and get the final 30% of the sale price if you maintain the profit level, which is a given especially considering their buying power and economics of scale, right?
So after some extremely stressful weeks providing every detail to the potential purchaser and stressful times while they do stocktakes and put in place new computers and software, the day finally comes for the takeover. But you are so fed up you are seriously thinking of pulling the pin on it, however you are so far down the track that you go ahead.
The money (70%) goes into your account, which you then you give to the investment company to invest in whatever manner they think is ok. Your life is changed. You are free, relaxed and have so much time off you don’t know what to do with it. Your family will be miraculously pleased to see you and you will be booking holidays to all sorts of places – wrong! Nothing has changed!
You didn’t really think how this would change your life other than the lump sum and now it seems to be more stress and less income. And there still aren’t any more vets around so time off is still difficult.
You aren’t more relaxed. You have to email a corporate office to question simple things like stock ordering or marketing decisions and plans. NO-one in support offices will answer their phone.
Some might say that you obviously aren’t adjusting to not being in control. But that’s not it, it’s because you are still left to manage the day to day business and every aspect of being a vet. The main devastating problem is: your project isn’t yours anymore.
Small business owners, and especially vets that have worked in their own business for a reasonable length of time, are motivated busy people that are generally “active relaxers” as well. Slowing down is sometimes MORE stressful. Those employment HR issues, managing the team, stressful cases where you don’t know what’s wrong with the patient , paying bills, or keeping costs down are actually stimulating albeit stressful. Take some of that away and you are bored, stressed and frustrated!
So you go on CPD course and maybe study. But then you have to apply via the corporate and will probably be bonded for another 1-2 years.
Before you sell a veterinary practice consider the following points:
1. DON’T just think that you want to sell the business to be free.
DO think about what you want to achieve.
Maybe you could achieve the same financial reward by working in your business for another 5 years, and at that point it would be ok to walk away or try and sell it outright for less. That’s pretty much what the purchase price the corporate paid you was worked out on – multiplier of 5. And in 5 years your might be more organised to walk away as you have a plan or project to go to. Maybe locums, maybe property of some sort, maybe travel then locums.
2. DO have a plan!
Think of what you would do if you had 6 months off right now, and then what you would do after that, including financial considerations. Aren’t you too young to stop working altogether? Do you really want to do locums or work in another practice? Could you cope with that?
3. DO REMEMBER that the sale includes a RESTRAINT of TRADE.
Research this carefully. When does it start, and for how long, and for what area/s. You can’t just start again after the two years that they bond you to the business for. You will have to move if you want to start again.
NEXT, consider the final pay out:
What were you thinking?
This was supposed to be an uplifting experience for the business and yourself. You finally get the final payout sorted out and then you have to decide what you want to do. Remembering you have a restraint of trade, and a family, and yourself to support for quite a few more years.
Do you stay on? Do you hire locums? Do you apply for industry jobs?
The decision making is huge!
The financial reward in no way compensates for the emotional and life turmoil the sale of your business can create. And the financial reward is a one hit wonder – you’ve got a lot of years to go.
You actually get a huge positive reward from being a vet every day and the human contact with your team and your clients. Taking this away may not be a solution to the chronic tiredness you may feel at times or the chronic apparent stresses. (Joining a well-being program might be a good idea) There may be more alternatives than “ditching”. Somehow, achieving the impossible and finding a good locum for two weeks (no matter what the cost) may be all you need on a regular basis.
If you are 50-60 and thinking of selling, I hope this helps in some way to stimulate some discussion and thought. It’s not all bad – sure you get to realise in financial terms your input in creating a successful business but what next?
If you’re looking to retire from your business, or perhaps you’re looking to become your own boss, VetPrac are hosting a seminar with Practice Sales Search on how to sell your practice and how to purchase a practice. If you’re thinking of making any changes, it’s highly recommended you attend so that you have the right information and support to make the right moves. These practical information days explain the red tape, planning, and considerations you will want to know before you jump into an expensive and legally binding contract. For more information head HERE.