PetDesk has had many customers sell practices to corporate buyers – and many of our clients are corporate themselves! As a result, PetDesk has amassed a vast amount of experience interacting not just with corporate buyers, but also with practice owners and employees who want to learn new ways to communicate with their customers. Selling to a corporate buyer typically comes with a number of advantages, one of which is better communication methods that increase your practice’s appeal even further.
Why Sell to a Corporate Buyer?
When a veterinarian becomes a practice owner, the thought of selling to a corporate buyer doesn’t generally cross their mind. The practice becomes their life’s work, and many worries arise regarding the sale to a corporation in the future. Concerns about the practice being fully redesigned in an inconvenient way for the veterinarians, staff, or clients are common.
Corporate buyers today are very different from those ten years ago, and they often take a different approach than they did in the past. If purchased by the right corporation, practice owners can focus more on the medical side of the business rather than the administrative side, easing a significant amount of stress. The buyout amount is also generally higher than that of a traditional buyer.
Choosing the Right Buyer
You may have already been contacted by at least one, if not multiple, corporations offering to purchase. It’s critical to look at each of these corporations individually and ask questions prior to making a decision. Several questions you should ask include:
Benefits for the Staff
What benefits will be offered to the staff? Will their benefits remain the same; will you offer more to my staff members? What will your paid time off or shift requirements look like? Healthcare policies? What other perks will you offer?
As far as recruitment, will there be incentives offered to future doctors and technicians? Many practices are losing prospective doctors due to better incentives offered elsewhere. Some incentives help with student debt, provide a sign-on bonus, or discuss the potential for growth each year.
You may also want to ask the following questions:
- Will there be a team dedicated specifically to recruitment? Will the practice have the support of a human resources department?
- As the practice grows, what type of support will I receive when searching for and screening potential employees?
- What does your hiring process entail?
You will want to ask what the business structure will look like. Will the corporation be part or full owner in the practice? Will you build up equity over time? Who will make business decisions?
Some companies tend to purchase the practice outright, while others propose a joint venture. You hold a certain amount of the joint venture and sell the remaining portion when the consolidator recaps in the future.
Regardless of if this is a joint or single venture, questions you may want to ask include:
How are decisions communicated to current/former owners and staff? What should be expected in terms of weekly meetings, emails, and general practice updates?
Lack of effective communication between the corporation, the doctors, and the staff can cause a major headache in the future if there is no understanding prior to purchase. Knowing the facts ahead of time will make a big difference in how well the process operates with new ownership.
Maintaining Client Communication
Vet-staff-client relationships are among the most essential factors in a successful veterinary practice. If you’re like most practices, you have likely put a great deal of effort into ensuring a happy, healthy relationship among your doctors, staff, and clients to keep morale up and develop trust. Consistency is key here and we want to ensure consistency is maintained through the transition.
If you already have a communication system put in place, that should be discussed with your corporate buyer. Will they allow you to continue utilizing this communication system? Or, if you haven’t been able to afford it prior, will they allow you to purchase a better system to communicate with your clients once you ‘go corporate?’
A system like PetDesk, if you don’t already have an automated communication system in place, could offer significant benefits to your team and even enhance the relationship you have while reducing stress on all parties involved. The ability to message clients, send out reminders digitally, and implement telemedicine could greatly improve your practice.
Operational Changes in the First Year
Since they oversee many activities, consolidators often have operational standards that apply to their practices. Some of these modifications are positive, and the operation will assist you by making your decision. New equipment and tools will go a long way towards improving the staff’s ability to care for clients. If they update your practice’s tools regularly, this is a great way to get the employees excited about the contract.
Some improvements, on the other hand, may be harder to implement. Changes to practice management and client communication software, for example, can cause a disturbance in your staff’s workload and client expectations, so knowing the buyer’s plans can ensure you have the correct expectations and communicate with clients and staff.
Nobody wants their pet’s wellness app to become unusable for no apparent reason. If their pet’s information is removed from the system they’re reviewing, there may be a serious problem, resulting in a loss of trust and credibility between the client and the practice.
The Effect on the Team
Some consolidators offer incentives to associate veterinarians and veterinary technicians. Understanding and communicating these benefits is particularly important for associates who have ownership aspirations. You should understand the associates’ expectations, so you’re able to facilitate their questions in the process as well- or better yet, include them in the process!
Veterinary technicians, receptionists, kennel employees, and the rest of the staff are usually curious about how this decision will affect their careers, whether they will feel heard, and if they will maintain autonomy in their workplace.
Legal and Accounting Team for the Sale Process
Whether you’re selling to a corporation or a veterinarian, you should put together a team to assist you. Be sure to consult with your accountant to ensure that the transaction is completed in a tax-efficient manner. It’s also a good idea to hire an attorney to help you determine and understand the complicated obstacles that lie ahead. The cost of including a team may seem to be substantial, but what is gained is well worth the investment.
Your team should point out possible risks that you may not have seen on your own. Your team can also assist you in deciphering all of the legalese thrown at you. There may also be strict requirements to fulfill to sell for the price offered by the corporation. Putting together the right team would help you achieve the objectives set out by the organization you have selected.
The tax on the sale of your practice is also something to consider. The Internal Revenue Service can request tax from you as a result of the transaction. Your accountant will assist you in determining and planning for any tax that may be due on the transaction, helping you to comfortably plan the next steps.
It’s critical to get a better understanding of the company you’re planning to sell to before making your final decision. Inquire about their track record; you’ll want to know the pros and cons of working with them. One of the most important sources of this knowledge is the vendors you know and trust.
You can also do your own sort of background check on the corporation you are looking into. There are background checks done on employees you are looking to hire, so why not conduct a background check on a corporation you are looking to sell to? You can also ask other veterinarians and staff members if they have any experience with the corporation in question.
The Bottom Line
There’s no question that selling your practice will be a difficult process for you. But, it could be your best option, and it’s definitely worth considering a corporate buyer if you’re looking to focus on medicine without administrative hassles. Your practice has more than likely become your life’s masterpiece, and you’ll want to make sure you investigate all options prior to selling.
You don’t want to choose the wrong buyer who doesn’t align with your goals. The right buyer can provide you with a significant number of benefits, including more incentives for yourself and your staff while relieving the stress of business burnout. Choose wisely and reap the benefits of the sale.