In my experience, sellers get concerned with the “correct” time to tell their team about the transition. We recommend informing them when all documents or some are signed and there is no doubt the sale will go through. It may be 2 weeks or 2 days before closing, it depends, and your transition advisor will assist you.
If you tell your team too early, they may become stressed, confused, and unsure of their future, so they may panic and find another job and possibly tell clients or other veterinarians. None of this is good! Your team and clients are important to the goodwill of your practice.
When you do announce the new buyer, remind the team that they love their teammates and patients and that isn’t changing. Explain a bit about the new veterinarian and schedule time for them to meet. Help them feel confident that the transition will be great, and the new veterinarian will need their assistance for everyone to be successful. If you are going to continue to work for a period of time in the practice, let them know that and say, “I’ll be here to assist in the transition to make sure it goes smoothly”.
A letter to clients is typically sent from the seller with the buyer’s approval. Depending on both the buyer and seller and the unique area, a newspaper ad can be placed, and an open house can be scheduled. The letter should emphasize your appreciation of serving them as their veterinarian over the years and also tell clients how happy you are that you found a great veterinarian, or group if it’s a corporate buyer, to take as good of care of the clients and patients as you did. Your transition advisor will provide ideas and examples to help you choose the best method for announcing the transition.
Clients may be unsure of the new buyer, so if you are in the office “brag” him or her up a bit. Post the letter at the front desk and have copies on tables so the clients can read about the new buyer while they wait. It’s important that the buyer of your practice not make any large changes in the practice and mirror you and your philosophy as much as possible. This will help make the transition seamless.
The new team will be concerned about the new buyer’s expectations so consider not changing much in the practice for a while, so they have a chance to transition and become comfortable. Provide information they won’t know such as how to schedule and what instruments you need for each procedure. Help everyone to be successful in their position.
Remember to remind your team often that everything is ok. Consider having one-on-one meetings with each new team member and ask specific questions. “What keeps you coming here every day? What’s one thing you would change in the practice if you could? Can I count on you to bring questions and concerns to me rather than involve the entire team?”
Transitions can be stressful. Work with your transition advisor that has many experiences and ideas to share to help everyone be successful.Read More
A recent and insightful Forbes article, “Study Shows Why Many Business Owners Can’t Sell When They Want To” penned by Mary Ellen Biery, generates some thought-provoking ideas. The article discusses an Exit Planning Institute (EPI) study that outlined the reality that many business owners can’t control when they are able to sell. Many business owners expect to be able to sell whenever they like. However, the reality, as outlined by the EPI study, revealed that the truth is that for business owners, selling is often easier said than done.
In the article, Christopher Snider, President and CEO of EPI, noted that a large percentage of business owners have no exit planning in place. This fact is made all the more striking by the revelation that most owners have up to 90% of their assets tied up in their businesses. Snider’s view is that most business owners will have to sell within the next 10 to 15 years, and yet, are unprepared to do so. According to the EPI only 20% to 30% of businesses that go on the market will actually sell. Snider believes that at the heart of the problem is there are not enough good businesses available for sell. In short, the problem is one of quality.
As of 2016, Baby Boomer business owners, who were expected to begin selling in record numbers, are waiting to sell. As Snider stated in Biery’s Fortune article, “Baby Boomers don’t really want to leave their businesses, and they’re not going to move the business until they have to, which is probably when they are in their early 70s.”
The EPI survey of 200+ San Diego business owners found that 53% had given little or no attention to their transition plan, 88% had no written transition to transition to the next owner, and a whopping 80% had never even sought professional advice regarding their transition. Further, a mere 58% currently had handled any form of estate planning.
Adding to the concern was the fact that most surveyed business owners don’t know the value of their business. Summed up another way, a large percentage of the business owners who will be selling their businesses are Baby Boomers who plan on holding onto their businesses until they are older. They have not charted out an exit strategy or transition plan and have no tangible idea as to the true worth of their respective businesses.
In Snider’s view, the survey indicates that many business owners are not “maximizing the transferable value of their business,” and added that they are not “in a position to transfer successfully so that they can harvest the wealth locked in their business.”
All practice owners should be thinking about the day when they will have to sell their practice. Now is the time to begin working with a broker to formulate your strategy so as to maximize your business’s value.Read More
You’ve heard the stories of people doing their own electrical work on their house only to be electrocuted when they try fixing the bathroom light while standing in the bathtub full of water. Or the person who decides to fix his brakes on his car only to accidentally cut his brake line and end up driving off a cliff. They have awards for some of these mishaps. They’re called the Darwin Awards.
Deciding to sell your own practice may not give you a fate as extreme as the Darwin Awards, but it could cost you money, your staff, lose patients for the buyer, or end up in a lawsuit. That’s if the sale even makes it all the way to the closing table. I have been selling practices for 15 years. I keep thinking I have seen it all, but then something out of the blue pops up. For example, I was called as an expert witness to review agreements in a prior sale where the buyers were suing the seller. The buyers thought they were buying a practice and a building. They wanted to save money and not use a broker, or an attorney. The buyers showed up at the practice after closing only to find an empty space. It turned out, they just bought the building and not the practice. The agreement used was a real estate purchase and sale agreement and was not for a practice sale – a big and costly mistake on both sides.
Lenders and attorneys report that practices that are sold without a broker have a 50% chance of failing before the practice closes. I believe the failure rate to be higher than that. Reasons they fail include buyers losing interest, seller and buyer can’t negotiate a disputed item or clause, seller and buyer don’t know the steps to the transaction, and confidentiality is breached by one of the parties. A failed sale can disrupt a practice if the staff leaves knowing the practice is on the market.
When selling a practice, you need to wear a lot of hats and possess expertise in a wide variety of areas. Transition consultants need to be knowledgeable in law, accounting, tax, real estate, valuations, psychology, negotiations, design, equipment, technology, software, project management, sales, analysis, practice management, human resources, and mediation. In addition, you need to have a lot of extra time. On average it takes 200 hours to sell a practice a lot more if the sale is to a corporate buyer. That time includes gathering data to do the valuation. Putting the valuation together. Developing a prospectus or offering. Creating advertising, placing the ad, taking phone calls, meeting prospective buyers, doing background checks on buyers, talking with lenders, assisting buyers in due diligence, working with attorneys, negotiating bumps in the road, reviewing agreements, and more.
You also run a financial risk. You could undervalue your practice or get taken by a buyer who is good at talking and negotiating a good deal for themselves. If there is a corporate buyer involved, you need a broker even more. Brokers can assist in negotiating amongst several corporate buyers to ensure you get not only the best value for your practice but also the best terms. Corporate transactions require a lot more scrutiny, due diligence, negotiating, and time. Done right and with patience and you also can reap the reward.
Selling your practice on your own may not get you a Darwin Award. But, doing so comes with a lot of risks and requires a lot of time and expertise. Why risk the equity you have built up over the years to save money? Pennywise and dollar foolish could cost you thousands, if not hundreds of thousands of dollars as well as non-monetary losses.
Give Omni a call today for a free consultation and learn how we can help. Call 877-866-6053 or email us at firstname.lastname@example.org.Read More
At OMNI Veterinary Practice Group, maintaining seller confidentiality is one of their highest priorities. Deciding to list a Veterinary practice for sale a major career move, regardless of the reasons behind it. When confidentiality is breached, the practice risks losing valuable patients and employees who would otherwise have remained during and after the sale, which reduces the overall value of the practice. For this reason, the professional team at OMNI Veterinary Practice Group have dedicated themselves to becoming experts at maintaining complete confidentiality throughout the process, while ensuring high listing exposure.
Even the most profitable Veterinary practices for sale can sit on the listing pages indefinitely when marketing efforts are lacking. At OMNI Veterinary Practice Group, this is not an option. The OMNI team of professionals has extensive experience and formal training as marketing experts to ensure the highest exposure for the listing as possible without risking the seller’s confidentiality. Each practice is listed across the nation in over 30 locations, including:
- Social Media Platforms
- Online Marketing Efforts
- And More
To better expose Veterinary practices for sale, OMNI Veterinary Practice Group has built strong lasting relationships within the field. These relationships, which also help in speeding up Veterinary practice transitions, include:
When you are ready for a career move involving the selling of your current practice, you can trust the experts at OMNI Veterinary Practice Group to maintain your confidentiality, while marketing your practice to a large group of potential buyers. To better assist you in the transition, OMNI Veterinary Practice Group is a leading provider of a wide range of services to Veterinary professionals, which include:
- Practice Sales or Transitions
- Real Estate Service
- Buyer Representation
To learn more about listing your Veterinary practice, please contact the expert team at Omni Veterinary Practice Group. OMNI specializes in Veterinary practice sales, and are dedicated to ensuring your success throughout the entire process.
By Corey Young, MBA, CEPA, CVA, ABI
Congratulations, you just accepted an offer on your practice! With all the emotions associated with the transition, when to notify your staff is surely at the top of your “to-do” list. Telling employees that you are selling your practice is an extremely delicate process. Breaking the news too early can come with many risks, so best to wait until all final closing documents are signed by both parties and no more than one week before the new owner takes over.
So, what are some potential risks?
One of the primary risks is that employees will naturally be worried about their job security the moment you make your announcement. Oftentimes if they have too much of an advanced notice they may start searching for other opportunities. Staff leaving could negatively impact the transition and patient experience because of how instrumental they can be in helping the buyer and the patients adjust to new ownership.
The other major risk is that nothing is final until its final. Veterinary practice sales are extremely complex and can be delayed for a multitude of reasons or fall through completely. Making the announcement before the sale is complete will cause stress and heartache amongst your staff during a time that you will be preoccupied with navigating a significant professional milestone. If the staff were to find out before closing was final, you wouldn’t be able to offer any reassuring answers because of unforeseen changes to the closing timeline.
Finally, regardless of your views of your staff’s maturity level, gossip will ensue. I have seen it countless times where a veterinarian tries to provide honest reasons on why they are selling, only to have their words misconstrued. Comments such as, “I’m selling my practice to focus on my health” can quickly morph into, “S/he is selling because the practice is going under,” or lead to unfounded conclusions such as, “After the new guy starts, we will all be replaced.” This kind of fear and uncertainty will have a profound impact on staff morale during a time where they will be needed to ensure a great patient experience during the transition process.
In the end, you probably have a deep and meaningful relationship with your staff. They deserve to know about ownership changes as they will be impacted, but it is best for them (and for you) that they be kept out of the loop until you have concrete answers to provide them.