Negotiating with Corporate Buyers: What Every Vet Practice Owner Should Know

Selling our veterinary practices to corporate buyers is one of the biggest decisions most of us make in a lifetime. Such a transaction would be overwhelming and certainly very tough especially since you are venturing through the complex corporate buyer landscape.

Knowing how to effectively negotiate will ensure you get the best deal, whether you want to retire or pursue something different.. If you are considering selling your practice, you should realize that corporate buyers are a special type of buyer. 

Their interests may not align with yours, and the overall goals and strategies may be different as well. In this chapter, we will walk you through the basics of negotiating with corporate buyers, but also cover some critical strategies that every vet practice owner needs to be aware of.

Key Takeaways from Understanding Corporate Buyers

When you’re looking to sell my veterinary practice, it’s essential to know who you’re dealing with. Corporate buyers are typically large companies or investment groups looking to expand their portfolio. They may have multiple veterinary practices under their management, and they often have the resources to offer higher prices than individual buyers. 

However, their focus tends to be more on long-term profitability rather than the sentimental value or unique aspects of your practice. Corporate buyers might be interested in making the practice part of a larger network, and this would influence the negotiation.

Private buyers have fixed processes and offer terms that fit their business model, unlike corporate buyers. They may quote you a good price, but be sure to pay attention to the terms of the sale, what happens to your practice once you sell it, and how much influence you’ll have over its future.

Preparing to Sell My Veterinary Practice

Before you get to the negotiation table with the corporate buyer, prepare yourself and your practice. A ready-to-sell practice has an increased chance of appeal and, therefore, perhaps higher chances of getting your preferred deal. 

Begin with having all your financial information arranged and updated. The buyers will have an interest in seeing the history of the practice’s healthy finances. And equal to this is also, post having a plan on what one wants after the sale is equally important. Do you want to be involved in the practice or to altogether go away? 

Your answers shall shape your negotiation and hence what you get offered to you. The goal gives you a knowledge base wherein deciding on the involvement needed from you post sale. Understand current market conditions for veterinary practices. Corporate buyers pay a premium in good markets, so timing could play a role. 

You can even consider consulting a business broker or financial advisor to access the market and get the best possible offer.

Negotiating the Sale

Once you’ve found a corporate buyer and are ready to negotiate, the first thing to remember is that negotiation is a process. It’s important to approach it with a clear understanding of your priorities and an open mind. 

Corporate buyers often begin with an initial offer that may seem low, but it’s usually just a starting point. Don’t get intimidated to counter their offer if they are not on the side of your expectations for pricing or terms.

During negotiations, remember that the price is not everything; there are other aspects, like the terms of the deal, including payment structure, post-sale involvement, and future employment opportunities.

Be sure to scrutinize any contract or offer that comes from the buyer, and if necessary, seek legal advice to ensure you fully understand what you are agreeing to. Do not rush the process; take time and ensure the offer meets your goals.

Safeguarding Your Interests

If you are selling to a corporate buyer, then you have to safeguard your personal and financial interests. Of course, one of the most important ways to do this is by knowing the terms of your employment agreement if you are going to stay involved in the practice after the sale. 

Corporate buyers may offer you a job in the new organization, but you must ensure the terms of employment are clear, including salary, responsibilities, and duration.

Additionally, you should ask how this change will affect current staff and clients. Often, corporate buyers will have the business’s method of doing things restructured, even change completely after a business purchase, so it could be significant for your employees to understand that things might be changing. 

You’ll want to discuss how such change will occur if you have an excellent relationship with staff or a loyal clientele base. Corporate buyers may also have different policies or approaches in matters of client care and hence ensure that your values blend well with theirs.

Other areas where a good sale agreement should offer you protection include clauses related to future legal or financial liability. This may include guarantees for the status of the assets of the practice or any unknown issues which might arise after the transaction has been completed. A very well-written contract can even safeguard you against those future surprise problems.

Conclusion

Closing the deal will be the final stage in the negotiation process, during which the details will be finalized and ownership of the practice will be transferred. Review the closing documents carefully to ensure all terms and conditions align with what was agreed upon during negotiations. 

After the closing of the deal, the corporate buyer will assume responsibility for the practice’s operations, and your status within the business will be altered. Selling a veterinary practice is a long-term decision, so it’s important to be involved in the process and ask questions. In other words, ensure that you are getting a fair deal that suits your needs and expectations. 

All this is possible when you take your time to understand the process, prepare your practice, and negotiate appropriately to make sure the sale of your veterinary practice goes on without any hitch.

FAQs

1. What is the time frame before selling a veterinary practice to a corporate buyer?

The time taken can range anywhere from several months to even one year, depending upon the complexity of the deal and the requirements of the buyer.

2. Do I need a broker to sell my veterinary practice?

Yes, working through a broker can make that happen, locate the appropriate buyer, and help deliver the best possible outcome.

3. Am I automatically expected to stay working for the corporate buyer that acquired my veterinary practice?

This will depend on your agreement. Some corporate buyers might be interested in having you stay on post-closure while others may not have a need for you.