My wildest dreams?

Consider all the components of owning a practice – and which you still enjoy – when deciding if selling it is a good idea for you. Photo: Vector Point Studio/Bigstock A couple of months back, I read an article on practice valuation that began with a pretty impressive claim. According to the author, the market for veterinary practices is so supercharged, those of us who bought medium-sized small animal practices just six years ago are seeing our “wildest dreams” come true. As I said, it’s an impressive claim. More so since I find it challenging to put a finger on my own wildest dreams, much less someone else’s. But I get the point. As a practice owner who employs three other full-time veterinarians at a suburban practice she bought in 2015, I can see where he’s coming from. Practices like mine are easily worth 20 times their original sale price (and possibly a lot more given our profession’s feverish practice transaction climate in many suburban markets). Trouble is, I have such mixed feelings on the subject of selling that I do not even want to know my practice’s current market value. Sure, I can have a proper valuation done, but do I really want to go there? I mean, I already have a fairly good idea what it is worth based on the basic bit of formal finance training I have had. So why go there if I’m kinda already in the ballpark? Here’s a good reason: The standard calculus for practice valuations seems to have been thrown out the window in some markets. Yes, it is a great starting place, but I’m confident even the wonkiest practice valuation expert’s calculations are of limited value. After all, some markets are supporting selling prices often stratospherically beyond standard valuation rates circa 2015. Moreover, it has been changing quickly … both upward and down. To know what my practice is really worth right now, I’d have to put it on the market and actively solicit bids based on comparables. I’d also have to employ a serious broker with proven negotiation skills in this industry. Do I really want to put myself through all that? Not really. It seems like a slog. Then there’s the really hard part: If I did all that I’d actually have to make a decision at some point. And I’d have to be willing to absorb any cost my curiosity might incur along the way. (Psychologically, it can often be hard to say no to a sunk cost.) Still, there’s a part of me that itches to know. In fact, there is even a piece of me that desperately wants out. Not out of the profession, mind you, but off the tedious hamster wheel of practice ownership in the age of COVID, corporate medicine, supplier consolidation, and increased client pressure. Maybe it is the limited time I’ve had to clear my mind (no vacation since 2019), the impossible hiring climate that makes HR such a nightmare, demanding team members who behave more like Romper Room inmates than true professionals, or my diminished tolerance for clients who expect so much and behave so badly. Who knows? One thing I do know is it is not the job of a veterinarian. I’m finally at that stage in my career where I no longer harbor demoralizing doubts about my knowledge base or skills (mostly). I have the ability to refer cases to my in-house colleagues or to amazing specialists if I’m feeling overloaded or clinically out-gunned. I can even fire clients at will. It is an enviable place to be. More importantly, the creatures are still lovably entertaining, the challenging cases are every bit as compelling, and the clinical wins are, if anything, even more satisfying than they ever were. What’s more, the knowledge I’m “essential” to my community is undeniably gratifying. Hell, I’ve even paid off all my loans! Am I not at the top of my game? So why would anyone in my shoes choose to sell? I started pondering my position more actively in recent weeks after learning a local colleague sold her practice to a corporate player. She’s negligibly older than me and has owned her practice for less than a decade, which is probably why it never occurred to me she would sell so soon. But, she must have had a good reason, right? Why should I cling to this thing by my fingernails when the getting’s apparently so good? Reasons to sell—and reasons not to Apart from the stressful, above-mentioned, day-to-day stresses, here are three quick reasons I came up with in favor of selling right now: 1. This may be the top of the curve, price-wise. I may never be able to get this good a deal ever again. 2. I want to write for a living, and travel. Why the hell am I still practicing so many hours a week? 3. Wouldn’t it be best if I sold now––while I’m still so motivated to say no to an unenthusiastic offer? Then there are the three primary reasons not to sell: 1. The kind of buyers willing to pay top dollar are not my ideal candidates. I’d prefer to sell to my associates, or to other veterinarians. Trouble is, my associates cannot pay anywhere near what multi-practice corporations run by non-veterinarian investors are willing and able to pay. While I’ve finally made peace with the fact very few veterinarians are even interested in buying a practice like mine, it is still selling out. 2. I’d probably have to work for someone else for a few years. Talk about my worst nightmare. After a bad experience in corporate practice’s middle management (albeit 20-plus years ago), the last thing I want is to hit replay. 3. I’ll never be OK with throwing my team members and associates to the wolves. It would hurt … no way around it. So what’s a veterinarian in my position to do? You might argue I’m agonizing altogether too much over an enviable decision most veterinarians will never have the benefit of making, and you’d be right. But that does not mean you should not care. After all, you deserve to know how corporations have come to dominate our industry, how these transactions come to pass, and what that means for you. This is not to say there is little room for veterinarians in independent private practice ownership. There will always be a market for clients who prefer smaller independent practices and the veterinarian-entrepreneurs who either start them up, or buy out the small-fry corporate castoffs before either building them into pickings for big corporations, or handing them off to other veterinarians similarly interested in more boutique-sized small animal practice ownership. Wherever you fall on the veterinary entrepreneurial spectrum, you should know you have real choices. After all, most veterinarians selling out right now bought practices no one else would buy at the time, or started them up from nothing. So, spread your veterinary wings, go forth, and hopefully help build more independent practices. Patty Khuly, VMD, MBA, owns a small animal practice in Miami and is a passionate blogger at drpattykhuly.com. Columnists’ opinions do not necessarily reflect those of VPN Plus+.

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My wildest dreams?

Khuly’s take on the current state of practice ownership

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