Set Yourself Up for a Successful Practice Transition

John Carmichael, Senior Associate, Capstone Financial By

Selling your practice will likely be a once-in-alifetime event. Whether you are considering retirement or exploring your options, we recommend that you take an active role in your practice transition. As you will see, this requires personal reflection and the advice/expertise of those who work on the business side of veterinary medicine.

Consider Your Feelings. The prospect of selling your practice will likely elicit strong feelings and emotions. You may have built your practice over many years, perhaps decades, and the idea of letting go may feel like an emotional rollercoaster. Your practice culture refl ects your personal values and ethics in providing the very best care for your patients. You may be most interested in “how much money will I get in return from the sale?” but it is important to acknowledge your non-monetary thoughts and emotions to avoid regrets.

Build Your Team. You will understandably have many questions and concerns about your present fi nancial condition and realistic transition options moving forward. Assessing your fi nancial ability to realize your vision of retirement is a critical step in determining a “treatment plan.” Key specialists who understand and work in the business side of veterinary medicine, such as consultant brokers and legal experts, can provide the guidance you need in the areas of fi nancial planning, accounting, and tax planning. You are the coach of the team, and your fi nancial and legal advisors are the players you send out onto the fi eld.

Most veterinary consultants/brokers recommend preparing for practice transition 3 to 10 years in advance. Because the value of your practice is based on profi tability, it can be benefi cial to begin working with a broker/consultant and accountant early on to examine areas of your practice that may need improvement. Advance planning can also provide a safety net if you or a family member has an unexpected change in health that necessitates the sale of your practice.

You may also seek advice from a fi nancial planner to help integrate the future sale of your practice into your retirement income plan. Obviously, it is common for small business owners to tie their personal wealth to their business venture. However, rather than relying on the sale of your practice to fund most of your retirement, we recommend fi lling several diff erent buckets during your working years to generate income. In addition to your practice equity bucket, you may have buckets for guaranteed income, including social security and investment vehicles like IRAs and 401ks. Not putting your eggs in one basket is still sage advice. for a profi t. If you are considering selling to a consolidation buyer, we recommend that you and your team assess them on a caseby-case basis. Because of the inherent confl ict of interest between the stakeholder’s fi nancial goals and the medical needs of the patients, this business model may make it diffi cult to fi nd an appropriate buyer. You may be enticed by a high off ering price, but it may come at a cost, with an employee agreement and/or noncompete clauses. Consolidation buyers are typically expert negotiators. Your team can provide invaluable support in working with potential consolidation buyers.

Considerations for the Sale of the Practice. As noted above, you may discover there is more to selling your practice than fi nancial considerations. Cultivating a healthy practice culture and earning your clients’ trust takes time and commitment. When you fi nally hand over your keys, do you want to feel that your staff and clients are in good hands for the future? Your plan may focus fi rst on making improvements to your practice, then grooming an associate as your successor over time. On the other hand, based on your fi nancial needs, you may fi nd that you are not in a position to be selective, so sales price is your overriding concern.

In order to facilitate a smooth transition, a reasonable expectation is that most buyers will want your continued engagement in daily practice operations. You could consider selling your practice in phases over time. How much of a commitment are you willing to make? Perhaps you enjoy coming into the hospital every day and would be willing to sign an employee agreement in exchange for a higher price. Or, you may be truly done and want the best sales price and terms that allow you to simply walk away.

Fit for Your Practice? A recent trend has been for consolidators to purchase practices well above what would be considered a fair price and still achieve their objective to maximize Return of Investment (ROI) for stakeholders by buying multiple practices and turning them over

Consolidation Buyers—Are They a Good

Conclusion. A successful transition takes many considerations into account. Nobody cares more about your practice than you, so staying engaged throughout the process will only work to your advantage. Working with a team—which may include accountants, legal professionals, brokers, and consultants—to develop and sustain a fi nancially healthy practice can allow you the fl exibility to command the highest sales price and select the most appropriate buyer.

John Carmichael

Mr. Carmichael is a senior associate with Capstone Financial and strategic partner with VISC, who handles life and disability insurance for CVMA members. John has enjoyed working exclusively with the veterinary community for over 12 years. He is known for his easygoing style and focus on education to help empower his clients to make informed decisions about their life and disability insurance programs. His commitment to conducting business with honesty and integrity is etched in the famous quote, “People don’t care how much you know until they know how much you care.” Mr. Carmichael can be reached at 800.544.6003 or at jcarmichael@capstonefinancial.net. (CA license #0F14121)

Wellness for Veterinary Professionals

This is the last article in the Renew series exploring physical, mental, and emotional health for veterinary professionals. We hope these articles have provided both insight and inspiration for your future wellness and renewal.

Dear Neuroticism: What Have You Done for Me Lately?

by Alex Miller, VMD By

Have you ever marveled at how naturally athletic dogs are? They seem built for speed and agility, darting and dodging with aplomb. Whether it’s a Border Collie wrangling livestock or a Yorkie stalking a mouse, it’s plain to see that diff erent breeds are suited to diff erent tasks.

Some researchers suggest that human personality traits serve similar roles. Like physical traits, there are no inherently good or bad personalities, just those optimized for certain conditions and situations. The key lies in understanding our individual personalities and recognizing when they’re serving us well and when they may be leading us astray.

Despite phenomenal advancements in medical research and an everblurring boundary between neuroscience and psychology, the concept of the Big 5 personality traits has remained relatively static and substantiated for decades. Four of these traits—openness, conscientiousness, extraversion, and agreeableness—are generally considered positive and desirable.

But the fi fth, neuroticism (sometimes described as low emotional stability or negative emotionality), mars the others with negativity. Neuroticism is of particular interest for veterinarians, as we hold the distinction of ranking signifi cantly higher in neuroticism than the general population. Do any of these descriptors characterize you, your vet school friends, or current/ former coworkers?

1. High stress or anxiety when others are relaxed

2. Prone to anger, frustration, or excessive worry

3. Getting into bad moods and staying stuck there

These behavioral characteristics, along with the physical and mental repercussions of a personality high in neuroticism, help account for the epidemic of general unwellness facing our profession. Numerous studies have demonstrated a negative correlation between neuroticism, workplace satisfaction, and overall quality of life. In veterinary medicine specifically, a UK study found that, when it comes to predicting our overall stress levels, personality eclipses environmental factors. And what personality trait was the most significant predictor of occupational stress? You guessed it—neuroticism.

But it can’t be all gloom and doom, right? After all, if the Big 5 are heritable, as research indicates, there must be some behavioral advantage conferred by neuroticism. Indeed, there are multiple proposed advantages to a personality characterized by higher-than-average neuroticism. These include:

1. Quicker response times and avoidance of dangerous situations

2. Higher competitiveness, leading to greater academic achievement

3. Creativity in problem solving

So now what? I’ve told you that our personalities are largely fixed, and that neuroticism has some serious downsides but also some evolutionary advantages. How does that help anything? What impact does this have on our everyday lives as we work through callbacks, hop from one allergic pet to another, and cram lunch into our stomachs like topping off the gas tank on a long road trip?

First, come to know and understand your personality. There are multiple online resources for this, such as openpsychometrics.org. Even a cursory awareness of our predominant traits can set us on the path to emotional awareness and improved relatedness with others.

Next, armed with this knowledge, start to take conscious note of your thoughts, feelings, and physiologic responses in a variety of settings. Are there any patterns, external circumstances, or settings that tend to lead to certain patterns of thinking or behaviors? Mindfulness apps, like Headspace or Calm, can be particularly helpful here.

To use an analogy, if we spend most of our lives on stage, playing out personal and professional situations like scenes, a mindful appreciation of ourselves helps plant us in the audience, affording us the ability to see our point of view as just one of several. Using this technique might allow us to reevaluate a pet owner’s scowl as not anger or disengagement, but possibly sadness or confusion. Our short-tempered coworker may be experiencing a personal hardship. And most significantly, perhaps we’re sending misinterpreted signals to others without even realizing. You see, since personality plays such a critical role in our response to situations and subsequent worldview, the key to relating to others is understanding they may experience situations fundamentally differently.

Most importantly, fight the tendency to compare yourself to others. I could devote every waking moment to running for speed, but I’ll never even approach the level of Olympic athletes—not to mention your average toy breed. Yet I still took up running, and I’ve gotten faster over the years. Just as you’ve perfected your surgery skills or diagnostic capabilities over the years, so too can you recognize and appropriately leverage your personality traits.

In short, don’t be best in show. Be best in breed. Trying to be someone we’re not is a recipe for failure. But through knowing ourselves, with hard work and dedication, we can work towards being the best versions of ourselves. A path to a fulfilling career may very well depend on it.

Dr. Alex Miller, the New England area veterinarian with Boehringer Ingelheim Animal Health, believes that veterinary professionals are as deserving of health and fulfillment as their patients. He graduated from the University of Pennsylvania School of Veterinary Medicine, worked at veterinary facilities in Barcelona, New Jersey, and Sonoma County, and is currently pursuing a Master’s degree. He lives in Massachusetts with his extraordinary wife, indefatigable daughter, and tiny adult cat.