Choosing the right partner for a practice transition is one of the biggest career decisions a veterinary owner can make. In 2023, there’s no shortage of options for owners from 100% sale, to JV, to selling to an associate.
At EverVet, we’ve been working with veterinary owners for years helping them determine the right next steps for their practice. What advice do we give to owners who are exploring potential partners before signing their LOI?
Check references… All the references.
Ask for a list of references, and be specific in your ask. If a company doesn’t want to provide a list of all the partner doctors, it could be a red flag about their relationship with their partners. Be wary of any organization that wants to cherry-pick its reference list!
Make sure you choose a partner you want to be next to in the good times and bad.
You know the saying… when the going gets tough the tough get going. When you sell your practice you’re committing to working alongside a team of folks for the long haul. As you go through the process, you should ask yourself: “Is this the team I want beside me in the good times AND the bad?” Remember, that super-friendly sales director you had dinner with isn’t your long-term partner in this arrangement… for that you’ll need to chat with the ops, marketing, and finance teams. Make sure you have a healthy understanding of who they are, and what they’re all about.
Understand how the company is capitalized.
Better yet, ask to see a balance sheet. In a time of rising interest rates, a looming recession, and industry headwinds, you want to make sure you’re partnering with a group that has a healthy balance sheet. If you’re going to be sticking around for a number of years in the practice, you’ll want to look for minimal debt, plenty of runway on the investment horizon, and a group that isn’t undergoing a recapitalization or seeking new investment partners any time soon. Again, this criterion is especially important if you’re planning on practicing for longer than the 2 years most companies require.
Take the temperature of the corporate culture.
Is there alignment between the culture of the corporate group and the culture of your hospital? Do your core values align? Partnering with a corporate group is a big change, but the shock, and therefore attrition, of the change, can be lessened by partnering with like-minded people to those in your practice.