Business financial planning: Incorporating personal finance goals with practice goals

Often, practice owners aren’t aware of how much risk is shared between their personal and practice’s finances. The life cycle of any good built-from-the-ground-up practice hopefully follows this pattern:

1. The practice depends on its owner to see patients and generate revenue.
2. The owner depends on staff to help generate more revenue.
3. The owner depends on newly hired veterinarians to take ownership of seeing patients to generate more revenue and allow the owner to focus on the practice’s growth.
4. The owner’s financial security for retirement depends on how much they saved during the years leading up to the eventual sale of the practice and the amount of the proceeds of the practice sale after taxes.

Meanwhile, the owner’s income is completely reliant on the performance of the business, and their retirement plan is, in many cases, nearly 100% dependent on the sale price of the business. If the owner’s retirement plan is not fully dependent on that sale, it’s because they own other assets that can generate income and the net proceeds from the sale of the business get added to that amount.

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Once the business’ value is turned into cash for the seller, they are faced with the reality that now that money must be an income generator. The total from the sale is often not enough to take them through retirement at the income level they desire.

What are your practice goals, if you have any, or are you living day-to-day trying to make it through while making everyone happy, checking off the things you need to do? Most of the time when I ask what practice goals an owner may have, it’s followed by a brainstorming session of what goals they should have. This then leads us to more soul-searching for what they really want.

Side note: We often find practice owners who are “ready to sell now” but are unaware they are not completely ready to sell. It’s scary and unknown. They know they are ready to sell but aren’t sure what exists for them post-sale.

So, what are some ways we can focus on the hopes, desires, and dreams of a practice owner so they can narrow down what’s important to them and, ultimately, line up the goals of the practice to ensure they are met?

There are many exercises that can help you narrow your focus. I will go through the one we most commonly use when we are coaching clients to find what they really desire.

Imagine yourself at the time that you sell your practice. It can be at the age of 45, 65, 85–it doesn’t matter. Forget about the financial numbers for a moment. You no longer see patients, and you don’t have any business messes to clean up. There isn’t anyone calling you with a need that only you can fill.

Think about what you are doing with your time and remember to think in the present tense. You have all the time in the world now. What’s on the list of things you now have the mental space and time to do? What is it that you’re emotionally gravitating toward doing? What gets you excited? Write them down and then prioritize them based on which ones are most important to you. What you listed as your personal goals will dictate how you accomplish them. However, the real question is, “how do I line them up with the practice goals?”

If you don’t have practice goals, the first place to start is imagining if you could snap your fingers, what would you change right now, and why? Sometimes the goals we hear from business owners are heavy. Sometimes they’re simple and easy.

The main goal for any business owner, veterinary or otherwise, is to create enough processes in the business that all employees can manage the practice entirely without the owner’s involvement, and the owner can have income that is truly passive, ie, income that pays the owner no matter what they’re doing with their time. The business continues to serve the community and run efficiently regardless of what the owner does with their time and attention.

After looking at your personal goals for after you’ve sold your practice, consider whether there is a chance you don’t have to wait until you sell the business before you can accomplish them. We often try to get our clients to take their list of personal goals and their list of what they’d change in their practice and start trying to connect the 2 lists. Creating a vision can give you the next clear steps to aligning the business’ direction toward accomplishing what you desire.

Securities products and advisory services offered through Park Avenue Securities LLC (PAS), member FINRA, SIPC. OSJ: 4200 West Cypress Street, Suite 700, Tampa, FL 33607, 813-289-3632. PAS is a wholly owned subsidiary of The Guardian Life Insurance Company of America (Guardian), New York, NY. The individuals associated with Florida Veterinary Advisors do not maintain specialized licenses or qualifications for the financial services provided to veterinary professionals. Florida Veterinary Advisors is not registered in any state or with the U.S. Securities and Exchange Commission as a Registered Investment Advisor. Florida Veterinary Advisors is not an affiliate or subsidiary of PAS or Guardian. 7856149.1 Exp 4/15/2027