Selling your veterinary practice is fraught with excitement and anxiety. And, amid what should be a joyous time, complications and issues can arise that make the process downright stressful. However, by anticipating potential problems and planning ahead, you can reduce your anxiety and ensure a smooth transition. Here are five tips to make your transition stress-free.
#1: Choose the right buyer
Choosing the right buyer for your practice can eliminate many problems from the start. When selecting a buyer, ensure your practice philosophies align as much as possible. Conduct meaningful conversations prior to entering into a buy-sell agreement, keeping in mind that a new owner will have the right to change anything they want about the hospital at any time. Some points to consider include:
- Will the buyer allow the hospital to continue practicing the same type of medicine?
- Will the buyer maintain the same business hours?
- Will the buyer provide equal or greater pay and benefits for veterinarians and support staff? (Corporate buyers can often offer more than a private buyer in terms of salaries, benefits, equipment and facility enhancements, and hospital marketing.)
- If the fee structure requires updating, will the buyer change it all at once, or gradually to ensure client retention?
Chances are, if you sell to an associate or private buyer, you will be more involved in helping them transition to ownership, and you may need to mentor them through the transition process. Corporate buyers, on the other hand, often have systems in place to help with a smooth transition.
#2: Transfer all business accounts
To prepare for a smooth transition, organize all business records, and work closely with your accountant and lawyer to ensure nothing is forgotten. Keep all vendor records for the year prior to the sale, to reconcile bills and ensure you have paid all of your final invoices. On the day of the sale, transfer the following to the new owner:
- Business licenses —Transfer all business licenses to the new owner, including your tax EIN.
- Utilities — Transfer all utilities, including electric, water, and internet services, to the new owner.
- Payroll — Run a final payroll and pay out any unused PTO.
- Credit card processing — Change your credit card merchant processing and care credit accounts to the new owner.
- Vendor accounts — Contact all merchants and vendors shortly before the sale so that the new owner can receive new account numbers, and everything can be transferred to the new accounts on the closing date.
Additionally, cancel your business insurance policies, including workman’s compensation and unemployment insurance, and close state and local sales tax accounts. Keep your business bank account open until all of your bills have been paid, but stop all automatic payments from credit cards and bank accounts, and close your credit card accounts once all bills and credits have been accounted for.
#3: Prepare your staff (and clients?)
Many sellers struggle with how to inform staff and clients about the change. Oftentimes, if the day-to-day operations are not going to change, there may be no reason to inform your clients. If patients will receive the same quality care and clients will receive the same customer service, telling them about the sale may lead to unnecessary anxiety.
A fear of the unknown can cause significant anxiety for your staff, especially those who have worked for you for a long time. If you plan to retire after the sale, it is probably best to not let staff know until a few months prior to your retirement. It is also important that you work diligently to make the transition as easy as possible for everyone involved. Ways to do this include:
- Continuing to work the hours needed to support patient and client needs
- Continuing to help team members grow
- Helping the manager develop a good working relationship with the new owner
- Helping to choose and mentor a new medical director, if necessary
Regardless of when you choose to tell your team, it is imperative to keep the lines of communication open, both before and after the sale.
#4: Clarify your post-sale responsibilities
Consider the post-sale medical duties that will be required of you, and ensure you have adequately communicated your wishes prior to the sale, which will help alleviate any ambiguity during the transition. If you are the current medical director, you will need to appoint an associate as the new director, unless the buyer is a current associate or an outside veterinarian. Ensure you devote adequate time to mentoring the new director. Things to focus on include:
- Leading the team
- Developing or enhancing medical protocols
- Overseeing staff training, if needed
- Conducting veterinarian interviews
- Working with the hospital manager
- Managing schedule II-controlled drug logs and ordering
- Mentoring new veterinarians
#5: Determine your new role
The above information is critical to a smooth transition; however, I don’t want to overlook a very important factor—your transition into a new role. Many owners have worked to build a legacy over many decades, and this is not something they take lightly. A variety of emotions go into the decision to sell, and when to take down your shingle as a practicing veterinarian. Many owners who sell are content to stay on in a part-time role indefinitely if it is a good fit for them, the new owner, and the practice, whereas others have a predetermined time frame. Ultimately, there are no right or wrong decisions. However, it is important to do everything in your power to ensure success for the new owner, and the hospital as a whole, while working in the practice after the sale. This will allow you to walk away with no regrets when the time comes.
Selling your practice does not have to be stressful, especially if the new owner has the right priorities. Contact Inspire Veterinary Partners to learn about our high-value purchase structures, and customizable compensation packages for veterinarians who choose to stay on after the sale.