Divesting a Practice Over Time: Good for Both Buyers and Sellers

Karl Salzsieder, DVM, JD, CVA, owner of Salzsieder & Associates, TPSG, LLC / DBA Total Practice Solutions—­Northwest, says divesting a practice over time is a great strategy for an owner.

Interview Transcript (slightly modified for readability)

“Divesting in ownership over time is a very good plan for selling or succession planning, and you also then would consider the buyer—whether they’re willing to let that happen or they want you out—but most common-sense buyers would love to have the seller transition slowly to prevent exit migration of the clientele.

So, there’s the business-client relationship issue and there are also tax issues. If you do a time sale, you can pay taxes over time as the money is received rather than getting a large, large tax bill based on capital gains at the time of sale.

Divesting a practice over time is a great strategy for the seller because they can defer and spread out taxation effects or payouts, and it’s a great thing for buyers because the clientele can be transferred over time to decrease the loss of clients of a sudden change of ownership.”