3 Ways to Prove You’re Ready for Practice Ownership
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Are you ready?
Most veterinarians thinking about practice ownership consider themselves veterinarians first and business owners second. That attitude makes for great doctors but timid entrepreneurs.
When veterinarians get a chance to acquire their own practice, then, dealing with the business side of things can feel intimidating. Nowhere is this clearer than when veterinarians start to deal with the lenders who might help them finance their acquisition.
If you’re in this situation and you’re worried, take a deep breath. On one hand, lenders don’t bite: they’re here to help you figure out what you need to do to make your business successful. On the other hand, there are lots of things that you can do to impress the lenders that you deal with. Here are three concrete ways you can knock the socks off of your veterinary acquisition lender.
1. Take control of your personal finances
Unless you’ve owned a business before, lenders will turn to your personal finances in order to evaluate your financial strength and character. They won’t expect you to be perfect (after all, most veterinarians are swimming in student loan debt), but they will be looking for signs of discipline and responsibility. There are a few ways to demonstrate this kind of financial literacy.
Pay off your credit cards (as much as possible)
Minimizing credit card debt shows that you have your financial house in order and that you’re able to live within your means. If you have a lot of cards with outstanding balances, though, paying down this debt can seem overwhelming.
The key is strategy. With a plan in place, you can think long-term and make responsible choices about paying off your debt. While there are plenty of guides on how to do this out on the web, we liked how simple and clear Student Loan Hero’s guide to paying off credit card debt was.
Build a personal budget (and stick to it)
Coming up with a realistic budget and holding yourself to it is a lot harder than it sounds. First, you need to be able to come up with a comprehensive look at your income and expenses, even though those two numbers might not be fixed. Then you need to figure out how much you’ll allow yourself to spend and how much you should save, a number which might seem arbitrary at the beginning. Most importantly, once you build the budget, you have to stick to it. In a world that’s constantly encouraging us to “buy buy buy,” that can be a real struggle.
If you can’t handle a personal budget, though, how can lenders trust you to run your own business? Trust us: the momentary bliss of an impulse buy is nothing compared to the freedom of financial stability. Pick something out from this list of budgeting tools from U.S. News & World Report and start planning today.
Be honest about the good and the bad
Even if you can pay off your credit cards and stick to a budget, there’s a good chance that your whole financial picture isn’t all wine and roses. And that’s ok. Lenders know that you’re human and most of them will genuinely want to help you if they can.
With that in mind, don’t hesitate to share the good and the bad when discussing your own financial history. If there are less-than-stellar moments in the past, chances are the lender might stumble across them anyway. It’s far preferable to bring these moments up on your own terms, early on in the process, so that you and your lender can work through them and build trust.
2. Build your advisory and support team
One of the best ways to show lenders that you’ll be a successful business owner is to anticipate and address your blind spots. You might be the best veterinarian in the world, but chances are that you have very little experience in areas like accounting or law. By building a professional advisory and support team, you show that you understand what it takes to run a business the right way. Here are a few professionals you definitely need on your side:
Veterinary CPA
Certified Public Accountants (CPAs) are much more than just the people that do your taxes. A good CPA is a business strategist and a partner that understand where you’re at, where you’re going and can consult with you on how to get there.
For this reason, we suggest that practice owners work with industry-specific CPAs whenever possible. The better that your CPA understands the veterinary world, the better they’ll be able to advise you on running your business.
Attorney
Don’t wait to start building a relationship with an attorney who understands your business. While working with an attorney (and paying regular attorney fees) is likely not the most exciting prospect in the world to you, it’s far preferable than trying to navigate the legal world yourself. Attorneys can deal with questions of business and liability, prepare and respond to contracts and help out with any real estate dealings that might come with acquiring a practice.
Mentors
While mentors aren’t technically a part of your business team, they’re an invaluable resource when you first start to run your practice. No one has insight into your situation quite like another, more experienced veterinary practice owner. If you don’t know of any potential mentors offhand, you might be able to meet someone through a professional organization, or even online.
3. Articulate your business model and vision
The beautiful thing about becoming a business owner is that you’re able to create and pursue your own vision of the future. The hard part is figuring out how to capture your vision in a realistic and concrete business model. Here a few things to keep in mind:
Define the seller and staff transition
Above all else, lenders need to feel certain that you’ll be able to pay off your debt. Figuring out who you’ll be keeping on payroll is a major part of anticipating what kind of revenue you’ll be able to generate.
First, figure out if the person you’re buying the practice from will be remaining on staff. If so, define what their role will be and how much they’ll cost. Often, former owners stay on in a reduced role. If that’s the case, you’ll want to spell out who will be taking on their former responsibilities and at what cost.
Identify opportunities
Part of your vision should be concrete ways to improve the practice that you’re acquiring. No practice is perfect, and in a rapidly changing veterinary industry, you need to be able to articulate a vision for your business that embraces the future as an opportunity. Where will you grow the business? What will you change? How will you differentiate yourself from the competition?
Conclusion
You’ve trained for a long time to become the best veterinarian that you can be. Chances are you didn’t have much time to think about running a business, and that’s totally okay. Lenders know that you’re a human being with limited time and specialized expertise. They don’t expect perfection. By showing that you’re a financially responsible individual with an expert support system and a vision for the future, though, you’ll show them that you’re an entrepreneur worth investing in.
Are you ready?
Most veterinarians thinking about practice ownership consider themselves veterinarians first and business owners second. That attitude makes for great doctors but timid entrepreneurs.
When veterinarians get a chance to acquire their own practice, then, dealing with the business side of things can feel intimidating. Nowhere is this clearer than when veterinarians start to deal with the lenders who might help them finance their acquisition.
If you’re in this situation and you’re worried, take a deep breath. On one hand, lenders don’t bite: they’re here to help you figure out what you need to do to make your business successful. On the other hand, there are lots of things that you can do to impress the lenders that you deal with. Here are three concrete ways you can knock the socks off of your veterinary acquisition lender.
1. Take control of your personal finances
Unless you’ve owned a business before, lenders will turn to your personal finances in order to evaluate your financial strength and character. They won’t expect you to be perfect (after all, most veterinarians are swimming in student loan debt), but they will be looking for signs of discipline and responsibility. There are a few ways to demonstrate this kind of financial literacy.
Pay off your credit cards (as much as possible)
Minimizing credit card debt shows that you have your financial house in order and that you’re able to live within your means. If you have a lot of cards with outstanding balances, though, paying down this debt can seem overwhelming.
The key is strategy. With a plan in place, you can think long-term and make responsible choices about paying off your debt. While there are plenty of guides on how to do this out on the web, we liked how simple and clear Student Loan Hero’s guide to paying off credit card debt was.
Build a personal budget (and stick to it)
Coming up with a realistic budget and holding yourself to it is a lot harder than it sounds. First, you need to be able to come up with a comprehensive look at your income and expenses, even though those two numbers might not be fixed. Then you need to figure out how much you’ll allow yourself to spend and how much you should save, a number which might seem arbitrary at the beginning. Most importantly, once you build the budget, you have to stick to it. In a world that’s constantly encouraging us to “buy buy buy,” that can be a real struggle.
If you can’t handle a personal budget, though, how can lenders trust you to run your own business? Trust us: the momentary bliss of an impulse buy is nothing compared to the freedom of financial stability. Pick something out from this list of budgeting tools from U.S. News & World Report and start planning today.
Be honest about the good and the bad
Even if you can pay off your credit cards and stick to a budget, there’s a good chance that your whole financial picture isn’t all wine and roses. And that’s ok. Lenders know that you’re human and most of them will genuinely want to help you if they can.
With that in mind, don’t hesitate to share the good and the bad when discussing your own financial history. If there are less-than-stellar moments in the past, chances are the lender might stumble across them anyway. It’s far preferable to bring these moments up on your own terms, early on in the process, so that you and your lender can work through them and build trust.
2. Build your advisory and support team
One of the best ways to show lenders that you’ll be a successful business owner is to anticipate and address your blind spots. You might be the best veterinarian in the world, but chances are that you have very little experience in areas like accounting or law. By building a professional advisory and support team, you show that you understand what it takes to run a business the right way. Here are a few professionals you definitely need on your side:
Veterinary CPA
Certified Public Accountants (CPAs) are much more than just the people that do your taxes. A good CPA is a business strategist and a partner that understand where you’re at, where you’re going and can consult with you on how to get there.
For this reason, we suggest that practice owners work with industry-specific CPAs whenever possible. The better that your CPA understands the veterinary world, the better they’ll be able to advise you on running your business.
Attorney
Don’t wait to start building a relationship with an attorney who understands your business. While working with an attorney (and paying regular attorney fees) is likely not the most exciting prospect in the world to you, it’s far preferable than trying to navigate the legal world yourself. Attorneys can deal with questions of business and liability, prepare and respond to contracts and help out with any real estate dealings that might come with acquiring a practice.
Mentors
While mentors aren’t technically a part of your business team, they’re an invaluable resource when you first start to run your practice. No one has insight into your situation quite like another, more experienced veterinary practice owner. If you don’t know of any potential mentors offhand, you might be able to meet someone through a professional organization, or even online.
3. Articulate your business model and vision
The beautiful thing about becoming a business owner is that you’re able to create and pursue your own vision of the future. The hard part is figuring out how to capture your vision in a realistic and concrete business model. Here a few things to keep in mind:
Define the seller and staff transition
Above all else, lenders need to feel certain that you’ll be able to pay off your debt. Figuring out who you’ll be keeping on payroll is a major part of anticipating what kind of revenue you’ll be able to generate.
First, figure out if the person you’re buying the practice from will be remaining on staff. If so, define what their role will be and how much they’ll cost. Often, former owners stay on in a reduced role. If that’s the case, you’ll want to spell out who will be taking on their former responsibilities and at what cost.
Identify opportunities
Part of your vision should be concrete ways to improve the practice that you’re acquiring. No practice is perfect, and in a rapidly changing veterinary industry, you need to be able to articulate a vision for your business that embraces the future as an opportunity. Where will you grow the business? What will you change? How will you differentiate yourself from the competition?
Conclusion
You’ve trained for a long time to become the best veterinarian that you can be. Chances are you didn’t have much time to think about running a business, and that’s totally okay. Lenders know that you’re a human being with limited time and specialized expertise. They don’t expect perfection. By showing that you’re a financially responsible individual with an expert support system and a vision for the future, though, you’ll show them that you’re an entrepreneur worth investing in.