“You’ll never pay off your veterinary student loan debt.” We have all heard this at one point or another in school or post-graduation. My response: FALSE! As a veterinarian, you can take control of your career and earning potential through practice ownership or partnership. Owning a veterinary practice enables you to generate more while building equity. However, evaluating and understanding how to approach ownership can be difficult to navigate. In this blog, I’ll outline three ownership options.
Don’t Fear Business Debt
Before we look at ownership options, it’s important to address debt. We are all familiar with bad debt such as the kind you get from a credit card with a 23% interest rate. Alternatively, business debt is typically good debt. It allows you to leverage other people’s money to build the business of your dreams. This can benefit you and help to keep the veterinarian at the top of the industry, which is needed now more than ever!
Taking on business loans can feel daunting as an associate veterinarian already trying to tackle those student loans (that you were probably told would take you 20+ years to pay off). Do not fear – ownership is an excellent example of needed to spend money to make money. It allows you to build equity in your practice that increases your earning potential and builds wealth. In addition, there are no caps on how much YOU can earn. While ownership can seem intimidating, there are many ways you can enter this exciting and rewarding realm of veterinary medicine:
Option 1: Approach Your Current Boss About Partnership Opportunities
Independent veterinary practices have existed for as long as the profession has been around. However, as time goes on these practices will change hands as owners retire or pursue other interests. For business continuity and maintaining the legacy of the practice into the future, practice owners must have a plan. If you are happy with the practice that you are a part of and see yourself helping to grow the business, ask your boss to discuss partnership. This can be a mutually beneficial conversation to have. Not only will this help you enter ownership with a proven mentor, but it will also allow your boss to have an exit plan as they near retirement. They can ensure that the practice is left in good hands and the legacy will continue. There are many ways to structure a purchase like this. One way is to purchase the practice outright at a given time. You can also consider structuring it as a progressive buy-in where you gradually purchase larger percentages of the business. This can be less of an immediate financial strain as a young associate.
Option 2: Corporate and Non-Corporate Joint Venture Programs
There are multiple corporate groups that offer joint venture partnership opportunities. This is where you purchase a minority share in a hospital and share in the profits. This may be one of the easiest ways to get equity in a practice. Many times, these corporate groups will finance your portion as well, which can remove the stress from finding outside funding to buy into the practice. Additionally, in a scenario like this, you will have a lot of support on the business side, which will allow you to focus on practicing medicine and building a cohesive team. My caveat to buying into a model like this is that you must realize you will never own a majority stake in the practice. You will likely be maxed out to a 49% ownership portion. I personally think that investing in veterinary medicine is a very low risk investment, but an ownership model like this can present even less risk for the individual veterinarian.
Option 3: Bite the Bullet and Go All-In
This may seem like the most stressful option for a veterinary associate, but keep in mind this allows you to create the culture and vision of your dreams! This is your chance to brand yourself and your practice to what you want. It truly is a blank canvas! However, it does come with a bigger financial commitment. Plus, you will likely have to look for financing, outside council or consulting, real estate agents or builders, and companies to help outfit your practice. Unless you are bringing a partner in from the start, all the decisions are now yours to make. This can feel daunting for many, but for the entrepreneur at heart, this can be the most exciting option!
In Summary
Veterinary owned and led practices keep veterinarians at the top of the industry. As pointed out, there is not a one-size-fits-all ownership/partnership model. This is good because there isn’t a scenario that fits every associate when it comes to finding a way to obtain equity in your place of business. If you have questions about your path to ownership, contact us at True Vet Potential. We feel strongly about veterinary ownership for our profession and want to make it easier for you to navigate the road to building equity in the practice of your dreams!
I’d like to thank my friend, Dr. Pam Hale DVM,MBA for connecting with me following her article Insist on Veterinary Leadership and Ownership. We share similar views on how best to empower the next generation of practice owners.