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take that long to implement the things it takes to get there,” he said. Although List advises that owners
should start planning for their exit the day they assume ownership, she cautions that they keep their exit options open as long as possible. “You don’t want to settle on one strat-
egy because it might not be available when the time comes for you to exit,” she said. How do you get started planning an
exit strategy? How do you know what factors to consider? List suggests asking yourself these five questions: 1. If you suddenly became ill or died, what would happen to your practice the next day? Is that acceptable to you?
One of the important factors to consider is whether you want to exit ownership in stages or at once.
2. Which is more important to you: maximizing the price you can get from selling your practice or turning it over to new owner(s) who share your practice philosophy?
3. Do you plan to continue to own the practice facility? Will a buyer be able to pay you the rent you want or need?
4. Are you willing and capable of having co-owners between now and when you exit?
5. Would you consider a merger with a colleague’s practice as a possible exit strategy? If so, with whom?
One of the important factors to con- sider is whether you want to exit owner- ship in stages or at once. For example, if you do not want to retire but you want to cut back on the amount of time you work, List says you may consider the following: Selling a piece of your practice to one or more of your associates; this is sometimes practical for an owner who is not yet ready to leave ownership completely
Offering your associate(s) first right of refusal to buy the practice at its fair market value when you are ready to exit ownership as part of their employment contract
Selling another veterinarian an Trends magazine, April 2012
option to acquire your practice at a fixed price on a fixed future date Another important factor to consider
when planning your exit strategy is the size of your practice. Ackerman says that the size of your practice will dictate who will be interested in buying it. “A single-doctor practice is most
likely going to sell with a broker,” Ack- erman said. “Single-doctor practices aren’t big enough to be sought after by national firms.” He said owners of two- to four-doctor
size practices most likely will try to sell to an associate. Larger practices (four to five veterinarians) might struggle to sell to a single associate, however, he said. “A practice that size is too big for most associates to take on by themselves,” he said. “If you have three or four associ- ates who want to buy together, that might work, or you might need to do a buy-in and let the associate(s) buy part of the practice.” “The demand for single-doctor prac-
tices is not high,” Ackerman said. “One of the things I would counsel [owners of single-doctor practices] is to consider a merger. Merge with another owner to become a two-doctor practice, and bring in an associate. “A lot of associates don’t want to do
all the work for 7 days a week them- selves,” he said. “There’s more appeal with a partner to not do that themselves. Then, the two older doctors can go part- time. And sell the merged practice to a corporation or to the associate.” VCA and NVA are two corporations
that buy veterinary practices. Nick Burda, vice president of business devel- opment for NVA, says corporations look at several issues for acquisitions. “The most important items include a strong level of medical care, a strong operat- ing culture, a financially successful and growing operation, an owner who would like to stay with the practice for at least a few years post-transaction, and a strong and stable staff (including the associ- ates),” he said.
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