Dr. Salzsieder has been a practicing veterinarian for 29 years, a practicing veterinary consultant for 27 years and a member of the bar in Washington and Oregon for 14 years. He does employee contracts, practice valuations, management consulting and facilitation of practice sales. He is a founding member of the AVMLA and the AVPMCA where he is president. He is also a founding member of the Washington State Bar Association Animal Law Section, formed in 2002.
Exit strategy or practice succession planning can include every aspect from financial planning for retirement to where will I find a buyer. This retirement financial aspect would include planning for the future practice sale value. That is another session not covered in this topic.
A lower risk practice purchase means the buyer and seller both win and the practice sells. It may be obvious that win-win is best, but sales are made that are not win-win or low risk. The practice sale may be to an independent third party or to an inside person, usually an associate doctor.
A buy-sell agreement or shareholder's agreement or operating agreement is a written statement of plans about how owners can slow down or get out of the practice at a set time or occurrence. It is the shareholder's agreement for a corporation or an operating agreement for an LLC.
The time for a practice sale depends on the following items: timing, personal health, interest in work, motivation for work, age, stress, funds, alternative investments and alternative activities. Some say you need 15-20 times your current earnings in investment funds for retirement.
Employment contracts exist even if they are not in writing. The problem with oral contracts is in trying to enforce them. Contracts require a meeting of the minds of two persons followed by some form of payment for enforceability. Employees, although commonly intimidated, must realize they are on equal footing with the employer.
Non-DVM practice ownership has long been the standard in most states. This is because the practice acts require it in slightly more than half the states. The remainder of the states may or may not allow non-veterinary ownership of a veterinary practice, but do not directly address the issue in their practice acts.
Staff management can be a fun cooperative project or it can be a daily drudgery depending on the cooperation and staff participation in discussions and agreements on the staff culture or some would say corporate culture.