There is a trope in comedic television shows and films fondly called “the lookie-loo.” The lookie-loo is the man who goes to the car dealership every weekend to look at his dream car. He talks to a salesperson, circles the car to admire its style and features, goes out for a test drive, but, when it comes time to sign on the dotted line, he just can’t do it. He leaves the dealership just as he came in: driving an old car that he doesn’t like but is resigned to keep—at least for another week.
When it comes to buying a veterinary practice, there are many associate veterinarians who could fall into the category of lookie-loos. They know what they want, maybe even aren’t happy with their professional life as an associate, but they just can’t make the next move into practice ownership. Perhaps they lack a financial skillset, aren’t ready or willing to do what it takes to move into practice ownership, and/or are just risk averse. We as a profession appear to have failed to give these associates the skills, confidence, and/or assistance to make the leap and reap the rewards of practice ownership.
How do you get past the real and perceived hurdles and transition from a want-to-be owner to a serious buyer? Here are five steps to take to help you get off the proverbial fence.
- Educate yourself on the advantages of practice ownership. If you aren’t yet a serious buyer, you likely have a long list of reasons why now isn’t a good time to buy a practice. But what you might not know are all of the reasons why now might be the perfect time to buy. I recommend that you consider the wisdom conveyed by one of my colleagues in this short video. Still not convinced of the value of owning a practice sooner than later? You may consider reading this article by another one of my colleagues.
- Get your finances in order. Here’s the good news: you don’t have to be debt free, independently wealthy, or save for 30 years to purchase an animal hospital. Unlike a home or vehicle purchase, the cash flow from the veterinary practice pays the debt service on the practice purchase, and real estate if applicable. Thus, your personal financial situation is only a part of the financing picture along with the financial performance of the practice. Furthermore, according to a 2023 analysis of data from the Small Business Administration, Veterinarians have one of the lowest default rates of any industry. That makes many banks eager to loan money to veterinarians to buy practices. A conversation with a bank/lender or veterinary practice broker will give you an idea of what, if anything, is needed to get your finances in order. A non-obligatory, complimentary conversation can go a long way towards your future financial freedom.
- Understand the cost of the type of practice you want to buy. If you are only willing to pay for the cost of a Chevy, don’t expect to drive off the lot in a brand-new Lamborghini. Too often, buyers want to offer half of the listing price for a practice even after a professional valuation has demonstrated that the practice is worth more than the sellers are asking. While we all want to get the best deal possible, disregarding reality isn’t going to get you what you want. Serious buyers make serious offers that are at least in proximity to actual value. Learn why the practice value is what it is and how it is supported in commercial financing. Remember, this isn’t a vehicle or home purchase. The practice supports the debt service and is an investment in your future.
- Talk to those who have already made the transition to ownership. If you have questions about transitioning to ownership, there are many online discussion boards where you can post questions anonymously or read previous conversation threads on the subject. Also talk with classmates who have purchased a practice, mentors & former employers, and even other small business owners you may know. Be sure to seek multiple viewpoints to get a clear understanding of the challenges one may face and benefits that have been realized. We are seeing more experienced veterinary practice owners team up with first-time buyers to purchase practices. This may be an entry strategy you could explore, especially if you are risk averse.
- Remember that you have done scary things before. There’s no point in sugar coating it: buying a practice is a big step in your career. Of course you are nervous about it! But you were probably nervous about other big decisions in the past and survived to tell the tale. In fact, you were likely better for it! Don’t let fear of the future—or complacency with the present—keep you from achieving your dream.
If you have spent a long time thinking about ownership, perusing online practice listings, or making one low-ball offer after another, it is time to move from lookie-loo to serious buyer. And when you are ready to get serious about buying a practice, know that you don’t have to go it alone.
