Who's buying?

Women now buy half of all practices sold in some parts of the country, and prospective women buyers are on the rapid rise nationwide. The Northeast, mid-Atlantic and the Southeast contain the largest concentration of female buyers, according to brokerage statistics, and national trends have begun to mirror the general doctor population, too.

"The East Coast and West Coast seem to have the highest percentage of women looking to buy, and the number of women who bought externally during the past 24 months in the Southeast are 50 percent," says Doyle Watson, DVM, president of Simmons & Associates Inc. and Simmons & Associates Southeast. "On the Eastern seaboard, between 50 to 60 percent of all purchasers were women in the past 24 months, and the percentage of internal buyers were considerably less for women, so that pulled the total number of buyers down to 39 percent nationwide."

Simmons & Associates is a veterinary practice sales network with 10 offices nationwide; each office is independently owned an operated, but they share revenue for sales, marketing and promotions. The combined companies commonly sell between 75 and 100 practices each year, including internal sales—which occur when an associate buys into a practice where he or she already works—and external sales, which include transactions where the buyer has no pre-existing relationship with the seller.

In the pipeline

Simmons' combined offices show 39 percent of all transactions in the trailing 24 months were to women, but the percentages of prospective women buyers are rising rapidly on the coasts.

"We have a database of prospective buyers for internal transactions, and 64 percent are women in the Southeast," Watson says, adding that many of those pending transactions will close by the end of the year. "The average of all the offices is 34 percent, which includes women who are actively looking on the open market, as well as women interested in an internal sale."

Sales to women are nearing parity with men in other sales networks, too.

"It's about half for prospective buyers, and it's close to half in actual sales as well," says Kurt D. Liljeberg, DVM, president of Superior Business Brokerage in Cleveland. He also is president of Veterinary Practice Sales Group (VPSG), a marketing cooperative with 11 offices nationwide. The VPSG network closes about 40-60 transactions each year.

VPSG member Michael Kovsky, DVM, president of IBA Business Brokerage, conducts between eight and 10 transactions each year in the Pacific-Coast states.

"I've been doing this since 1990, and it appears that women are the majority of buyers out there these days," Kovsky says. "Because there has been a trend in the veterinary schools to admit and graduate more women, the number of women with three to five years of experience have increased; subsequently, so have female buyers."

Simmons shares a similar notion in its Northwest territory. David Gerber, DVM, president for Simmons & Associates Northwest, which comprises Alaska, Washington, Oregon and Idaho, says seven of his past 15 practice sales have been to women.

"The trend didn't surprise me because it's been my impression for the past few years. It likely is beginning to mirror the actual amount of veterinarians in total," says Gerber, who has been a practice broker since 1993. "Because the gender shift is occurring—and we really don't know where we are in that gender shift—there still are more men out there now, but if you look at the age groups, there are a lot of young women and a lot of older men."

Statistics gauging owners in the new-build sector were not available at presstime.

Critical mass

With admission to many veterinary schools wildly weighted in women's favor for several years, KPMG's Mega Study from 1999 projected that the percentage of women doctors will surpass men this year.

"In five years, the 39 percent who bought probably will be more like 50 percent, and the 35 percent who are looking to buy likely will be more like 50 percent nationwide," Watson speculates. "If we advance that notion, the sellers will increase, too, and the 20 percent who are trying to sell nationwide will increase significantly."

Though sellers nationwide predominantly are men, women comprise more than one-quarter of all sellers in four Simmons' territories.

Sales in general are attributable to the baby boomers starting to retire, Watson says, and the sheer volume of practices that retirees plan to shop during the next five years—coupled with the explosion of stable financing—likely will open doors for many recent graduates and soon-to-be doctors.

True of buyers in general, lenders typically require three to five years practice experience with clean credit—besides student loans—to give a candidate the best chance to secure a loan. And for the right applicant, lenders are doling out between 85 percent and 100 percent financing.

"About 65 percent of the buying community are first-time buyers; they are carrying between $40,000 and $65,000 in student-loan debt, and they generally don't have two nickels to rub together for a down payment," says David Green, past president of VPSG and a licensed broker with Medical Practice Brokers in Colorado Springs, Colo. "So we usually are able to secure 100-percent financing from folks like Matsco, Professional Practice Capital and a few other specialty lenders."

Motivational sales

As the concentration of women increase among the buying and selling communities, many marketers and brokers are trying to determine why women buy and sell practices. Not surprisingly, the motivations for both might be the same: freedom.

"I hear it from the selling and owning communities: Women are really looking to work part-time, and the reason usually is so they can spend more time with their family or start a family," says Green, who sells practices in Colorado, Texas, Wyoming and Louisiana; his prospective buyers are two-thirds women.

"They are smarter than we were," Gerber concurs.

Women today are much more educated, and they realize that freedom in their family life is just as valuable—if not more valuable than their work, but they still don't want to work for someone else, says Shawn Henriksen, administrative director for PS Broker on St. Simons Island, Ga.

"The majority of people on our active-buyers list are now women," she says. "We notice that many of them want to tag team with other women to buy practices; they want to be an owner instead of an associate so they can share responsibility with a partner and still have their family, and that's a big market area for us now."

Henriksen and partner Pennie Freeman launched PS Broker Sept. 11, 2001, and though the business might have had a slow start, she says the company's empathy for women's lifestyle concerns gives them an advantage in recruiting and retaining potential buyers and sellers.

"There are more and more women in the market; the old school is out, and there is a whole new trend in the way people are running their practices and how they evaluate equipment and staff," she says. "They are very busy, and they prioritize the way their clients and staff are treated instead of putting all the revenue in their pocket like the old-school model. They are reinvesting into the practice, and that's better business; it's better for our pets, and it's better for the industry."