What Is the Best Exit Strategy for a 1 to 1.5 Doctor Practice?

It is true that smaller veterinary practices are not typically targets for corporate consolidators. The main contributing factor to this is the concern around replacing a primary revenue producer. “When Dr. Smith leaves Smith Animal Hospital, can we find another DVM to step in and keep revenues in place?” So, what steps should a small practice owner take to prepare for retirement?

Your first, and most important step, is to start thinking about this five years before your planned exit. One reason for this is it might take that long to sell or find the right buyer. There is no guaranteed supply of potential buyers who are looking for a clinic in your area. Starting early will help you put a plan in place to help maximize revenues and get your books in order. One final consideration is that part of the deal may require you to stay on board for a few years to help with the transition. All things considered, that five-year period isn’t as long as it initially sounds.

Another strategy would be to try and grow the practice into a two-DVM or larger practice. A second full-time veterinarian could change the situation and make you a candidate for a corporate buyout. One suggestion to help make this happen would be to offer some equity to the new associate. The associate veterinarian supply is limited. Offering equity could help you not only find an associate but could also help ensure stable production and longevity in the practice. Who knows… they may be the one that ultimately buys your practice.

There are so many factors to consider when thinking about an exit strategy. Contact one of our Veterinary Practice Brokers today to start the conversation and get some expert advice.

Dr. Len Jones and Will Cannon
Southern Region of TPSG

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