TPSG buyer services include:
Associate buy-ins and partnerships
Buying into a practice can be complicated. We can help in structuring a fair brokerage for all partners because bringing in a partner is really a partial sale of the practice. Many of the same services that are required for a full-practice sale are needed to ensure a successful and enduring partnership. Some of the pertinent steps you should consider are the following:
- Tax analysis and (re) structuring for both the buyer and seller ensure the minimum tax consequences while assuring maximum tax benefits.
- Negotiating and drafting of all legal documents.
- Structuring withdrawal formulas for remaining partners.
- When desired, buyer assistance to acquire the needed financing.
- Compensation packages for each partner should be fair and incorporate several elements based on the responsibilities of each partner and the amount of time each person works each week.
- Fair compensation structure and steady practice growth ensure success for all partners.
Associate buy-ins normally proceed as follows:
- Determine the practice value. One of the most important factors for both principals is that they feel assured that
1. the buyer has not overpaid, and
2. that the seller has received fair compensation.
- Help negotiate a fair and equitable structure for buyer and seller.
- Structure agreements include compensation and exit strategies for all doctors.
- Discuss all financing options.
- Help with financial assistance for buyers when needed.
- Structure and prepare agreements for review by the buyer and seller attorneys and accountants.
- Interface with attorneys and accountants to complete financial documents.
- Assist and direct closing.
The final value of a practice based on an associate buy-in will differ from an outright sale in that the associate buy-in will normally assume practice liabilities with the seller.
Still, one of the most important principals is that the buyer feels assured that (1) the buyer has not overpaid and (2) the seller has received fair compensation. After all, both principals will be working side by side for many years and a positive introduction of the new partner can mean the success - or failure - of the new partnership, and thus the practice itself. Any animosity over a less-than-fair deal can negate the benefits of a flourishing partnership.
What is a practice merger? This is a transaction where one doctor wishes to sell his/her practice to another established doctor in the same area and merge the practices together in one office. The most successful mergers take place where the selling doctor can bring his practice and good will to a new location and participate for the first 6-12 months.
Thus, by merging the two practices, the size, financial efficiency, and use of practice resources are enhanced for the buyer. The seller, or retiring practice owner, will need to sell the real estate separately if real property is owned. However, selling the practice through a merger that otherwise might not have been saleable by itself is good business for the seller and buyer.
Keep in mind that a practice merger is the best investment the doctor buying the practice could ever hope to make to increase their practice very quickly. After all, investing in his/her own business is the best place to put his/her money. In doing so, it increases the buying doctor’s market share and provides more clients, more growth, and more profits.
The number one rule of thumb in investing money is invest in what you know and can control. If you invest in Ford Motor Company stock for example, and the U.S. auto industry tanks, you have no control over your invested dollars other than cutting your losses and selling. However, by putting those same hard-earned dollars into your own practice that you understand and can control, your investment is more protected. Investing in yourself, your practice, and your profession is good business for most veterinarians.
Having developed solid relationships with practice and real estate lenders over the years, we at TPSG are able to obtain acquisition financing and working capital. It is in obtaining financing that our experience and understanding of the veterinary practice industry that strengthens your chances. Financial institutions will look favorably when you come in armed with an accurate practice market value and a thorough report of the practice that has been conducted by brokers who are knowledgeable experts in veterinary practices. Read Practice Financing for more information.
Accountants, lawyers, certified financial planners, and practice management consultants who are familiar with the veterinary practice industry are an integral part of TPSG. Buyers and sellers may need the assistance of these types of professionals during transactions or be merely looking for a second opinion. We can arrange for these professionals to assist when their services are requested.
TPSG brokers help buyers ask the right questions, obtain the right information, and help make the right decision when it comes to buying a practice. When acquiring a veterinary practice, especially the first time, the decision process can feel enormous.
Demographics along with a marketing book concerning valuations, cash flow analysis, legal entities’ and tax allocation are but a few of the documents the buyer will need to review to come to the right conclusion.
read more about Buyer Representation >
Real Estate Services
As licensed real estate agents and brokers, we also provide assistance in financing and closing the real estate that the practice is located on.