It\u2019s 3 in the morning, cold, dark and rainy. I\u2019m 3 or 4 years old and sitting in the backseat of my dad\u2019s truck as he heads out to deliver another calf or fix another prolapsed uterus. Fast-forward a few years and dad has traded in the life of a mixed-animal practitioner to build a small-animal hospital. My new memories are filled with me running around the clinic, locking myself in cages, and playing with puppies and kittens. Another year or so goes by and dad grows the hospital to the point that he has time for \u201cIce Cream Thursdays\u201d in the afternoon with me and my sister. He still works most Saturdays, but we are able to run our family\u2019s cattle operation and, during the summers, load the camper and explore the country.<\/p>\n
Not knowing any better, I assumed that all practice owners and their families enjoyed a similar lifestyle. I thought that veterinary medicine, while a passion, was just a career and that all practice owners built sustainable, profitable businesses that allowed them to enjoy the fruits of their labor.<\/p>\n
Unfortunately, the more immersed I became in our profession, the more I realized that what I saw growing up was more of an outlier than the norm. Whether it\u2019s practice owners I meet at conferences or veterinary students and friends interviewing for jobs and relaying their experiences, I\u2019ve seen the other side of the coin. For many veterinarians, practice ownership means long, grueling hours of managing a business and its employees, a responsibility for which practitioners tend to receive minimal, if any, formal training. They pour their heart and soul into a hospital, only to find that when they\u2019re ready to retire, their practice, because of years of poor financial management, isn\u2019t the nest egg they expected.<\/p>\n
For an article about practice ownership, I realize I\u2019m off to a dismal start. I\u2019m not doing the next generation of owners any favors. My point is that ownership is what you make it. It can be:<\/p>\n
Alternatively, it can be the pursuit of a passion that drains you, burns you out and leaves you holding an empty bag at retirement.<\/p>\n
Success, happiness and fulfillment come down to preparation and the decision to work on the business and not just in the business. The choice is yours.<\/p>\n
Speaking to a group of Veterinary Business Management Association students, I asked why they were interested in practice ownership. Readers, please take a moment to reflect on where you are in your career, what you love about it and what you feel is lacking. If you don\u2019t own a practice, think about what ownership could mean for you personally and professionally.<\/p>\n
The VBMA students listed these reasons that practice ownership is appealing.<\/p>\n
Most of the reasons are self-explanatory, but let\u2019s examine the last one. I\u2019ve rarely met anyone in our profession who got into it for the money, but that doesn\u2019t mean money isn\u2019t an important result. In other words, the financial reward of being a veterinarian might not be why we do what we do,\u00a0 but it is often a tangible benefit.<\/p>\n
The 2018 Well-Managed Practice Benchmarks Study showed that practice owners earned almost 25% more than associate veterinarians and that an associate with six to 10 years of experience and earning a median income of $93,000 took home $213,611 less a year than a practice owner. Where does all the money come from? I love walking practice owners through an exercise to convey just this.<\/p>\n
Start with this question: What do you get paid to do as an associate veterinarian? I\u2019m not asking how you get paid \u2014 salary, ProSal<\/a>, straight production or hourly \u2014 I\u2019m asking what you get paid to do. The answer: You get paid to show up and practice medicine. When you\u2019re not working, you\u2019re not getting paid. When you retire, what happens to your paycheck? It stops the day you stop.<\/p>\n Now, think about a practicing hospital owner. How does she get paid? If she\u2019s running a profitable business, she should be getting not only biweekly checks but several more. As a practice owner, you should be able to pay yourself through the following means:<\/p>\n At this point, you\u2019ve hopefully reflected on what practice ownership could mean for you. To those of you ready to take the next step, let\u2019s blaze a trail.<\/p>\n I suggest to veterinary students, and say the same to experienced practitioners, that they consider these steps:<\/p>\n As you map a path to ownership, realize that there is no rule of thumb as to a right or wrong time to act. Some associates practice for five or 10 years before leaping. I\u2019ve known a few who jumped into ownership the day they walked out of veterinary school.<\/p>\n Winding our way along the path to buying or starting a practice, let\u2019s explore three options: the startup, the buy-in and the buyout.<\/p>\n When many of my veterinary mentors graduated in the 1980s, the traditional path was to work for a couple of years and then create a startup. This remains a valid path. I\u2019m in the middle of doing it myself, so I can speak about the positives and negatives from experience.Let\u2019s begin by reviewing five advantages of a startup.<\/p>\n Now, here are some hurdles if you opt for a startup.<\/p>\n A startup can be a thrilling ride, but if you\u2019re looking for something a little less risky, the next option might be for you.<\/p>\n For the purpose of this article, when I write about a buy-in, I\u2019m talking about acquiring a minority or majority stake in an existing hospital. You have at least one other partner. The appeals of a buy-in are:<\/p>\n Here are the potential downsides of a buy-in.<\/p>\n If embarking on a startup or buying into a hospital isn\u2019t up your alley, consider the last option.<\/p>\n A buyout, also known as a turnkey deal, refers to purchasing an existing veterinary practice in its entirety. You could do this as the new sole owner or in partnership with someone. Here are the positives.<\/p>\n As for the negatives, the market for veterinary practices is cut-throat. Three associate veterinarians who took jobs at clinics where the owners were committed to selling to them called me to report that the owners reneged and instead decided to sell to corporate consolidators. As a private practice owner, I know the difficulty of buying a hospital at fair market value when a corporation is ready to offer a price you can\u2019t match.<\/p>\n Also, assuming you can land a hospital you want, know that investing in a buyout tends to cost more than when you buy in. Unless you\u2019ve got a partner, you\u2019re responsible for everything, so make sure you\u2019ve got the money to cover the monthly mortgage payment.<\/p>\n Another potential risk of buying a hospital outright is client and staff turnover. If you\u2019re like me, one of the reasons I love buying a hospital is for the challenge and reward of watching what happens when we improve the culture, quality of care and management. Unfortunately, if change happens too fast or is implemented incorrectly, you risk losing staff and clients. I\u2019ve never seen an ownership transition where some of that doesn\u2019t happen.<\/p>\n Regardless of your path to ownership, I encourage you to examine the value of partnering with a colleague. Just like practice ownership isn\u2019t for everyone and everyone isn\u2019t right for ownership, the same rings true with partnerships.<\/p>\n A mentor once told me that a partnership is like a marriage. I\u2019ve found it to be true. When you approach a commitment like marriage, you\u2019d be wise to explore shared values and philosophies. It\u2019s the same way with a business partner. From medicine to management to communication, the conversations with a partner should occur before you sign on the dotted line. Getting into most partnerships is easier, friendlier and cheaper than getting out of one.<\/p>\n If you decide you can do more with a partner than alone, you will enjoy a host of benefits. These range from complementary strengths, shared responsibilities, shared financial risk and more upside potential in growing the hospital when two or more people are working not just in the business, but also on the business.<\/p>\n On the other hand, having the wrong partner is just as impactful. Working with a maverick, a control freak or someone who doesn\u2019t value you and what you bring to the table will create a nightmare for everyone.<\/p>\n Whether you choose to pursue a startup or purchase all or part of an existing practice, due diligence is paramount. Consider the practice team, the market, the local demographics and the hospital\u2019s financial health. Practice ownership only pays off financially and in other ways if you have the right practice at the right time and at the right price.<\/p>\n Making an educated business decision and preparing for the demands of ownership can be among the most rewarding decisions you make professionally and personally. Practice ownership can deliver freedom, flexibility and fortune.<\/p>\n Veterinary and non-veterinary resources abound for the aspiring and current practice owner. I recommend these books and websites:<\/p>\n Practice ownership only pays off financially and in other ways if you have the right practice at the right time and at the right price.<\/p>\n","protected":false},"author":102,"featured_media":10012,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"iawp_total_views":0,"footnotes":""},"categories":[328],"tags":[],"class_list":["post-10011","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-april-may-2021","column-features","clinical_topics-practice-ownership"],"acf":{"hide_sidebar":false,"hide_sidebar_ad":false,"hide_all_ads":false},"yoast_head":"\n\n
How to Get Started<\/h3>\n
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The Startup<\/h3>\n
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The Buy-In<\/h3>\n
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The Buyout<\/h3>\n
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When to Partner<\/h3>\n
What\u2019s Your Path?<\/h3>\n
\nLEARN MORE<\/span><\/h3>\n
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