Veterinary biz Q&A: Can I sell my goodwill?
Karen E. Felsted, CPA, MS, DVM, CVPM, CVA
Dr. Felsted is a CPA as well as a veterinarian and has spent the last 15 years working as a financial and operational consultant to veterinary practices and the animal health industry. She also spent three years with the National Commission on Veterinary Economic Issues as CEO. She has written an extensive number of articles for a wide range of veterinary publications and speaks regularly at national and international veterinary meetings. She is the current treasurer of VetPartners, a member of the Veterinary Economics Editorial Advisory Board, a member of the CVPM board of directors and the current treasurer of the CATalyst Council. In 2011, she was awarded the Western Veterinary Conference Practice Management Continuing Educator of the Year and in 2014, the VetPartners Distinguished Life Member Award.Dr. Felsted enjoys exotic international travel, and when the dvm360 team last heard from her, she was headed to the Galapagos.
Find out whether a practice owner looking to switch careers can fetch a nice price tag for patient records.
(Getty Images)Q. I have a small practice-established 30 years. I want to change my professional direction and have had the practice valued with real estate. The trouble is finding veterinarians who would like to practice solo like myself in a small town. I've had two independent veterinarians and a corporation express interest, but they would want me to stay on, which I don't want to do.
So, now I want to approach local veterinarians about merging or selling the goodwill from the practice. I can use my building and the equipment as a learning lab for training and a workspace for a nonpractice venture.
How do I go about selling patient records and goodwill?
A. This is a tough position to be in. If you haven't talked to a practice broker familiar with the area yet, I think you should. It would be worthwhile to get some input on the likelihood of selling the practice outright. You aren't typically required to stay on in those situations, although you may need to be available to answer questions for the buyer for a few weeks or months. Obviously, if you use a broker, you have to pay a fee, but a professional can often do a better job of marketing your practice and identifying potential buyers than you could do on your own.
Going beyond goodwill
Want more? Read our curated collection of articles on buying or selling a veterinary practice.
If you've already spoken to a broker and you've been told your practice will be a challenge to sell or you've already listed it and aren't getting any nibbles, then selling the records (goodwill) and the equipment and inventory can be a good option.
There isn't quite the established methodology for selling records that exists already for pricing an entire practice, but there are several ways to get to a reasonable number. Ultimately, the amount a local practice will be willing to pay depends on whether they need or want more clients and how confident they feel that your clients are a good fit for them and will actually transfer to their practice versus going elsewhere. Selling the records can be more difficult if the services you offer are unique. But if your practice won't sell, even if you only get a small amount for the records, it's more than you get from just shutting down.
Dr. Felsted is a CPA as well as a veterinarian and works as a financial and operational consultant to veterinary practices and the animal health industry. She has written an extensive number of articles for a wide range of veterinary publications and speaks regularly at national and international veterinary meetings.