What is a practice merger? This is a transaction when one doctor wishes to sell his/her practice to another established doctor in the same area and merge the practices together into one office. Mergers offer a possible alternative solution to simply closing the doors on a low grossing practice.
In today’s marketplace, practices grossing under $300K have very few buyers and practices under $200K usually need special incentives to obtain any sort of an offer. Thus, what does one do with a low grossing practice?
If the practice has been established for a period of time and the veterinarian has a good rapport with his neighboring colleagues, merger is a possibility. The most successful mergers take place where the selling doctor can bring his practice and goodwill to a new location and possibly 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 was owned. However, selling the practice through a merger that otherwise might not have been saleable by itself is accomplished.
Keep in mind that a practice merger is the best investment the doctor buying a veterinary practice could ever hope to make to increase his/her practice very quickly. After all, investing in your own business is the best place to put your money. In doing so, it increases the buying doctor’s market share and provides more clients, more growth, and more profits.