How many years you should have under your belt before you own a practice?  Typically, the number is five years, but that the number really depends on the doctor.  We’ve had doctors who were able to purchase a practice after three years and do quite well.   A lot depends on your comfort level, skill set and experience. 

Here are some things to consider before you buy:

1. Are you comfortable with your clinical skills?   If you have been out of veterinary school 3 to 5 years, you should have a feel for where you are with your skills.  A lot depends on the clinic(s) or hospital(s) you’ve been working.  Some may limit what you’re doing and others just may not be busy.  If you’re in a location that’s given you a variety and volume of experience, you should be getting a good amount of experience.
2. Have you seen a good practice in operation?  Sure, you’ve been working in one or more clinics, but are they well run?  Or, if they’re not, you know the difference.  If you are in a well-run practice, you should be observing how the doctor and/or office manager treat the staff.  Whether a veterinary assistant, office manager, or veterinary technician, they should all be treated well.  How about the patients and clients?   They should be given good, Nordstrom-like treatment.  They pay your rent and you want them coming back.
3. Do you know how to read financial statements?  Most veterinarians in the early stages of their career don’t know what a financial statement is let alone how to read one.  There are on-line courses such as accounting for non-accountants and other courses on financial statements and bookkeeping that can fairly quickly teach you what the financial statements are and how to read them.  Understanding them is imperative in running any business.
4. Now that you know how to read a financial statement, do you know what the numbers should be?  What percentage of collections should your payroll numbers be?  What about rent?  Etc., If you don’t know, there are resources you can look at on-line where you can learn.  Watch all of the White-Board Wednesday videos from Joel Parker, DVM that are on line.  They are great in teaching you numbers as well as other aspects.
5. Practice Management – Learn as much as you can with the free stuff on-line.  From the White-Board Wednesday videos to other on-line courses, you can learn a lot for no cost to minimal cost.  This will quickly help you grasp the key concepts of managing a practice.

These are just a few things you can do to prepare you to own a practice.  Keep in mind that practice owners typically make 20% to 25% more than an associate veterinarian.  In addition, the equity you build in a practice is a great source of retirement.

If you'd like to talk to us about your individual situation, contact us and we can help!

​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.  For a free consultation or an expanded list of things to work on, give us a call at 877-866-6053.