"Help! I need to sell my practice"
Don't panic: You don't necessarily have to delay retirement due to a struggling economy.
If you're a practice owner thinking of selling, a recession can make you feel like a high-schooler all dressed up for prom—without a date. But you're not doomed, says Dr. Karl Salzsieder, JD, a Veterinary Economics Editorial Advisory Board member and owner of Salzsieder Consulting and Legal Services in Longview, Wash.
Dr. Salzsieder has been facilitating practice sales before and during this recession, and he's a breeze of calm in the storm: "There are still buyers out there waiting for good practices to buy and banks and lenders waiting to give financing to veterinarians." Here's what Dr. Salzsieder says to keep in mind if you're planning to sell soon:
Show financial health. Be ready to demonstrate to lenders and practice buyers that your clinic is profitable. Ideally, you'll be able to show positive cash flow for three years prior to a sale. If not, consider fine-tuning and improving your practice until things look better.
Be prepared to finance the sale. When a buyer can't afford the full down payment, the lender may ask you to carry some of the debt. That means the buyer will write two checks every month: one to you, and one to the bank. This isn't an ideal situation since it increases your risk exposure, but it may be necessary if you're ready to sell now.
Confront low practice value. If you or an appraiser discovers that your practice doesn't have positive cash flow, you can still improve. Your first steps? Work up your cases thoroughly, charge for all your services, and make sure your fees are set appropriately.
