The purchase of a veterinary practice will be one of the largest transactions of your career.
With an understanding of the basic facts, and with the help of our team at PS Broker,
you can buy a veterinary practice and begin your career as a business owner with a solid foundation.
FREQUENTLY ASKED QUESTIONS:
Think about what you like to do and what you’re good at. Owning a practice requires more than being a good veterinarian – you must also be an effective business manager. Do you see yourself hiring, firing, and scheduling employees, paying bills, taking payments, and maintaining client records? Or do you prefer to concentrate on medicine rather than administrative details? Perhaps, like many owners have found, you would like to own your own practice but hire an office manager? PS Broker will help you explore your ownership options and identify a safe and sensible investment. Remember, your agent and your lender – in fact, everyone involved in your purchase – want more than a quick deal; they want your continued success.
You want a lifestyle that will appeal to you and your family. Luckily, practices are available all over the country and in all kinds of settings, from rural to urban. The style of practice you want will also affect your decision; not just the kind of animals you serve, but the workload you prefer, whether that’s a modest, turn-key operation that gives you plenty of time at the beach, or a growing practice you can expand to its maximum level. PS Broker understands local markets across the country, and we will help you zero in on the practice and location that’s right for you.
The decision to start a new practice will involve a survey of the local market, competition, suitable locations, and other factors. A start-up will have – for a while – no clients and no cash flow; it will have an immediate accumulation of debt and scheduled payments. Employees will have to be interviewed, hired and trained, while procedures and processes are defined and implemented. It’s generally easier and safer to acquire an ongoing concern with an existing clientele, an experienced staff, and predictable cash flow. Lenders will consider start-ups, but closing costs are high.
Financing is readily available. Since veterinary practices tend to have proven track records and solid documentation, lenders consider them to be safe investments. PS Broker will help you pre-qualify for both conventional and SBA loans. Then, we’ll put you in touch with lenders who specialize in veterinary practices. We won’t recommend one over the other – the choice of lender is up to you. An associate doctor with good credit might be surprised at how much can be financed, allowing them to get the perfect practice in the perfect place. Veterinary practices can often be acquired with little or no down payment. As mentioned above, good credit is important. PS Broker understands the complexities and options in today’s financial market, and works successfully with lenders industry-wide. When you are ready to buy, you’ll be pre-qualified and able to move quickly.
Emotions can play a surprising role in the sale of a veterinary practice. Sellers care about their clients and their staff; the practice is their legacy. If a seller is uncomfortable with a buyer’s approach, they may decline the offer. As a buyer, you should understand the principles embraced by the doctor, and be prepared to continue them. Sudden changes after a transfer can be unsettling to both the staff and the clientele. While it’s true that many practices will need some revamping after changing ownership, gradual change is the proven approach – not only for practice philosophy, but for equipment as well. PS Broker will also help you arrive at the best plan for equipment use and upgrades, so you don’t cause yourself financial stress by overinvesting in equipment upgrades.
Once you’ve identified a property of interest, your agent will analyze the finances, assets, and operations of that practice. You’ll want to visit the practice as soon as possible and see the area firsthand. PS Broker has been valuating veterinary practices for more than 30 years, and when an offer is made, it will reflect the fair market value and reasonable prospects of that practice.
In most cases, the retiring doctor is willing to stay on for a specified amount of time, giving you a chance to come up to speed. Some are interested in serving as relief doctors on a long-term basis. These contractual options are negotiated by your agent during the purchase process. The support staff is a major asset of any practice, and PS Broker will help you prepare for the retention and continuity of staff members. PS Broker will also provide you with a free post-sale valuation to see how you’re doing. This checkup can identify problems before they become significant, and since we have our fingers on the pulse of the industry, we’ll be able to share what’s working for other doctors around the country.
A non-compete agreement will specify that the seller cannot compete with you in the future, within a certain distance. The period of the non-compete and the area will largely depend on the population density and competitive factors. For example, in an urban setting with many existing practices, a typical non-compete would be for three years and five miles. In a rural setting in which the practice has little competition, the non-compete might be for five years and a hundred miles. The legality and enforceability of non-compete agreements is changing, and PS Broker always closely follows these developments to ensure our clients’ adherence to the rules.
Confidentiality is expected and practiced by buyers, sellers, and their agents. This benefits all parties, so we make sure our clients understand the importance of discretion. All negotiations will be handled by your agent, who will also coordinate any visits to the practice. With an understanding of these basic facts, and with the help of the professionals at PS Broker, you can buy a vet practice and begin your career as a business owner with a solid foundation. For more information, contact us about Buyer Representation and we’ll get you started on the path to owning your own practice.