While selling your veterinary practice to a current associate or partner may seem like a quick way to share some of your responsibilities, the truth is that these types of deals can be very complicated from both a financial and personal standpoint. Here are some of the pros and cons of selling your practice to somebody you work with already.
No Searching for a Buyer
The biggest reason that people try to sell their practices to an associate or partner is because it cuts down on the time and expense of marketing the practice to the outside world. It also minimizes the risk that there is an exodus of employees or that customers are turned off by the thought of new management by keeping the transition largely out of the public eye. Typically these kinds of sales take place after you have become comfortable with a particular associate over an extended period of time, and you're confident in their ability to lead the practice well in your absence.
Perhaps the hardest part of selling your practice to an associate or partner is the process of relinquishing control. Whether you choose to divide responsibilities or simply transition control over to the other party over time, this can be difficult because you are used to having authority regarding how and when to do things. Instead, you'll have to get used to them also calling shots and making decisions and perhaps dealing with a different style of management. In most cases you can solve this by working together to make decisions for some period of time before turning over control to the other party .
Another major challenge is determining how much to sell and how much the buyer should pay for their share of the practice. When you are making an internal sale, it can be much harder to set a fair price than if you were negotiating with an objective third party. If you do plan on selling your practice a little at a time, you need to be sure that the buyer is getting enough of a share of the business to feel responsible to and for it. If you sell too little, they could be left feeling indifferent about the investment they've made.
Lastly, the pay structure of your practice will change in varying degrees as you add a partner. In an outside sale of 100% of the practice, this change in income tends to be much more abrupt and clean cut. With a partial sale, you will likely find that you continue your usual work work schedule and your customary amount. Since you have sold part or all of the practice, you're profit from the ownership will be decreased.
These are just a few of the biggest hurdles you will face if you choose to pursue a sale to an associate.