Ready to Own? Not Until You Count The Cost
I recently coached a doctor contemplating ownership, and it reminded me of my decision, over 25 years ago, to buy a practice.
Had I engaged an advisor or coach, I might have passed on the opportunity, recognizing my lack of readiness and the challenges of that particular business, which led to additional and unnecessary stress.
Even so, I don’t regret doing it because it’s now a part of my journey and story.
It’s also the reason I do what I do today, helping those who desire to own and need advisors or a coach to make the best decisions.
Dr. Harper in my story below is not a real person per say but reflects a mash-up of many new and aspiring practice owners, with eagerness and vision, a desire for independence, and a family and debt to juggle.
Everyone will be in a slightly different place when they want to start the process of practice ownership, so I’m sharing my initial steps to coach clients regardless of where they are.
If you’re in the practice ownership mindset, I hope you’ve thought through some of these details or that this inspires you to do so.
Assess Readiness and Vision
Dr. Harper wants to start her own veterinary practice. It’s something she’s always wanted, and she has a great opportunity to do so.
She called me to discuss the situation and explore the pros and cons to determine if she was ready.
I was excited to help her because we need more independent practice owners and I love seeing someone taking risks to grow and achieve their dreams.
I asked Dr. Harper questions to understand her motivation, priorities, and values. Then we discussed her leadership and business experience and details of the purchase.
Here is a summary of what she shared:
She believes ownership will provide the autonomy and financial freedom she craves.
She values work-life balance, three-day weekends, and the ability to travel.
The business model will deliver high-touch, high-quality care, staffed by one doctor – herself.
She is a recent graduate with $250,000 of student debt.
Her spouse works full-time, and there are two school-age children at home.
She is pre-approved for a $750,000 loan with a 10% fixed-rate APR and a 15-year term.
The available leasehold is in a new shopping center and will cost $7,000 per month.
The bank requires 10% of the loan as collateral and to use as working capital. She has just that.
Fostering Success: Balancing Enthusiasm with Pragmatism in Veterinary Practice Ownership
Do You Think This Is The Right Move For Dr. Harper?
In my commitment to see her succeed and be happy, I had some concerns, the biggest of which was her readiness for the realities she was about to embark upon.
I get it.
I’ve been there.
You get so excited about the future possibilities that putting reality into the equation is a buzzkill you prefer to avoid.
Well, I’d much rather you have it now instead of when you’re almost $1 million dollars in debt.
Wouldn’t you?
Navigating the Path to Veterinary Practice Ownership: Considerations and Insights
Here are my takeaways from our discussion and some ownership “truths:”
She has great energy and motivation to start a practice. Great – check!
She has a lender and a location. That’s good news, but is it good timing?
Like many veterinarians, she has little experience in business and people management. While that’s not ideal, there will be an unavoidable crash course in both, so resilience and learning on the fly will be critical skills to have.
She has yet to calculate what it will take to repay the loan, pay herself, meet expenses, and pay taxes. While we want to hope that everything will work out fine, financial preparation is what will matter most, so this is a must-have before signing any documents.
Practice ownership is no guarantee of financial freedom and could compound financial troubles, at the minimum, adding plenty of stress from worrying.
Practice ownership doesn’t always align with a desire for work-life balance and travel, especially in the early years when the business will consume a lot of time and energy.
While I would love for Dr. Harper to achieve ownership, more information is needed before any contracts are signed.
What I find myself repeatedly recommending and teaching is to start with the finances and production needs, to count the cost.
The nice thing about data and finance is that it is black and white, it is neutral. It tells a story and provides perspective.
So, I sent her several resources on practice finances and benchmarks and am here to help if she wants to dive deeper and discuss the realities of ownership.
In the meantime, I wish her the best.
If you would like help figuring out if you’re ready for practice ownership or are curious, and need some outside and experienced perspective, then please reach out and book a (free) discovery call with me.
I have many tools and resources for where you are in your ownership journey!
