As a veterinarian, the dream of owning your own practice often represents the pinnacle of professional achievement. However, venturing into practice ownership is a monumental decision that requires thorough preparation and strategic planning. Here’s a comprehensive guide to help you navigate this exciting journey.
First Things First: New Practice vs. Established Practice
Starting from Scratch – Opening a new veterinary practice means building everything from the ground up. This option provides you with the ultimate level of control over every aspect of your practice, it also involves substantial initial investment and higher risk, as you will need to attract a clientele from scratch and navigate the unpredictable early stages of business growth.
Purchasing an Existing Practice – On the other hand, acquiring an established practice comes with a built-in client base, experienced staff, and an existing revenue stream, which can significantly mitigate initial risks. Many lenders prefer financing acquisitions because they can assess the financial history of the practice to predict future revenue. However, you will inherit the existing business culture and practices, which may require time and effort to align with your vision. Potential downsides include staff turnover and adjustments in business philosophy.
Key Questions to Ask When Purchasing an Existing Practice
Once you decide to take the leap and purchase an existing practice there are a few questions you must ask yourself when evaluating the potential purchase which include:
- How did the seller arrive at the sale price?
- What all is included in the sale?
- Does the sale include any special conditions?
- Why is the owner selling, and what are his or her plans following the sale?
Due Diligence: Ensuring a Smooth Transition
Due diligence is a critical phase in acquiring a veterinary practice, requiring meticulous attention to detail and professional expertise.
- Compliance Documentation: Ensure all regulatory requirements are met. A compliance audit can prevent costly future fines and enhance the practice’s value.
- Non-Disclosure Agreements:
Protect sensitive business information with NDAs to prevent information leaks that could harm the practice’s value or operations. - Non-Compete Agreements
Verify that existing veterinarians have non-compete agreements to safeguard against them taking clients if they leave the practice.
Conclusion
Owning a veterinary practice is a significant milestone, representing either the start of an exciting new venture or the culmination of a dedicated career. Whether you choose to build a practice from scratch or acquire an existing one, being well-prepared and informed is key. By asking the right questions, understanding valuation methods, and ensuring thorough due diligence, you can set the foundation for a successful and fulfilling practice ownership journey.
Clients who work with the Florida Healthcare Law Firm are protected by deep healthcare industry experience and fully served by attorneys aligned with their success. The team here doesn’t dabble in healthcare law, we specialize in full spectrum representation of healthcare providers and nearly every type of healthcare business.
