Veterinarians, investors, and others who wish to take their practice a step further or add to their existing portfolio may choose to purchase an existing veterinary business. It’s an exciting and potentially lucrative move that could allow you to both serve the pet-owning community while growing your professional credentials and personal wealth. However, it’s not a decision that you should make lightly and without careful input from experienced counsel.
Buying a veterinary practice opens the door to potential losses and liability risks. But with the right legal team by your side, you can overcome these challenges and make a successful and prudent purchase. When you’re ready to buy, let the attorneys of Mahan Law guide you from the beginning to the end of your deal.
How to Know You’re Ready to Buy
Whether you are a veterinarian or an investor, you must make a careful determination as to whether buying a practice is the right decision. Working with our experienced legal counsel, we can help you evaluate:
- How many clients and patients you currently serve: If the number of clients and patients keeps you pretty busy, you may be ready to expand your operation by purchasing your own practice and moving your customers to it. Buying your own business also allows you to hire employees to help with your customer and patient load.
- Your financial preparedness: Buying a practice requires diligence in the way of finances and money management, and you will need to have a full picture of your credit score, existing debt, savings and resources, and financial literacy. We can discuss potential financing options with you and the financial side of what owning a veterinary practice looks like.
- The current market: With pet ownership at all-time highs, ever increasing numbers of services and specialties available, and market conditions that make property ownership and leasing much easier, this could be the time to move forward and purchase. Let us review the specific market in your area and provide you with a comprehensive analysis.
- Your professional objectives: Are you a veterinarian who wants to operate a small, community-focused clinic or do you want to open several different locations? Perhaps you are an investor wanting to capitalize off the trend towards veterinary specialists by purchasing a practice in that space. We can help you define your goals and then work to achieve them.
Steps to Buying a Veterinary Practice
When you’ve decided that you’re ready to buy, we will walk you through the following steps:
Consult with knowledgeable professionals
Having an industry specialist, an accountant, and a veterinary lawyer in your corner is going to take your purchase decision to the next level. Working with these individuals can help you avoid common mistakes and minimize your liability as you move along the purchase process.
Research the practices you may want to purchase
You will need to tap into your personal and professional networks and conduct ample research to see which practices are on the market. Using such factors as patient and customer size, available services, and geographical location, we can help you put together a list of potential target businesses to acquire.
Initiate contact and conduct due diligence
Reach out to the practices on your list and begin the process of evaluating their financial viability and long-term profitability. You will likely need to enter into confidentiality agreements which will allow you access to each practice’s tax returns, profit and loss statements, customer lists, and other information. We can assist with drafting these agreements and reviewing the information that you obtain through them.
Learn about the team and the company’s values
Every veterinary practice has its own employee dynamic and culture, much like a family might have. If you are buying the practice, therefore, you are buying into a family of people who work together and maintain certain ways of doing business. You need to know whether there are problems like low employee morale or opportunities like strong work ethic.
Negotiate the price and other terms of purchase
This, especially, is where having an attorney is indispensable. Your lawyer will consider all of the above factors in determining an appropriate offer price, terms and conditions of the purchase, and plans to transition. It will also be essential to execute ancillary documents such as non-compete and non-solicitation agreements.
Secure financing
You have various options for purchasing the practice, including bank loans, Small Business Administration (SBA) loans, seller financing, and others. The best financing choice is the one that meets your personal goals and financial position, so discuss this with your attorney as well.
Closing the deal and making the transition
Once a deal has been successfully negotiated and the final purchase agreement is drafted, it’s time to close the deal and ensure all post-closing matters are properly handled. Some examples include reviewing and updating policies and procedures, meeting with and reviewing the performance of each employee, and completing any asset purchases that were a part of the transaction.
Common Mistakes When Purchasing a Veterinary Practice
Partnering with your attorney, you can avoid some of these common mistakes that veterinarians and investors make when buying a practice:
- Rushing or skipping due diligence for the sake of closing the deal
- Not conducting a thorough market and personal financial analysis
- Overlooking the concerns and interests of existing staff and the culture of the practice
- Choosing an unsuitable financing option with undesirable terms
- Failing to mitigate risks and protect yourself from unnecessary liabilities
How Having an Attorney Will Enhance Your Deal
Mahan Law takes your purchase of a veterinary practice seriously. That’s why, when you retain our firm, you get the following benefits:
- Experience with the relevant laws and regulations that govern the purchase and operation of a veterinary practice
- Understanding which permits, licenses, registrations, and other government permissions you will need, and how to obtain them
- Knowing which business and vendor contracts that you will need to protect your rights in purchasing and running a practice
- Effective negotiating, drafting, and execution of contracts and agreements
- Assistance with each step of the due diligence and purchase process
- Guidance concerning financing options that best fit your deal
- Implementing an effective transition strategy that minimizes the risk of employee turnover and business disruption
- Long-term legal advice as you encounter challenges and opportunities for future growth
Contact Our Experienced Nationwide Veterinary Practice Purchase Attorneys
Our dedicated law firm is ready to work with you on structuring and executing your purchase so you can have the peace of mind that legal, financial, and personal concerns and goals are being addressed. Are you ready to begin the process of buying a veterinary practice? Connect with Mahan Law today to get started.