Dr. Karen Felsted joins the podcast to explain the rollercoaster ride that has been the veterinary practice sale market over the last 5-10 years. If you are interested in understanding corporate consolidation in the veterinary industry, or in one day buying or owning a veterinary practice yourself, this episode is not to be missed!
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ABOUT OUR GUEST
Dr. Felsted is a CPA as well as a veterinarian and has spent the last 20 years working as a financial and operational consultant to veterinary practices and the animal health industry. She is active in multiple veterinary organizations, has written an extensive number of articles for a wide range of veterinary publications and speaks regularly at national and international veterinary meetings. In 2011 and 2017, she was awarded the Western Veterinary Conference Practice Management Continuing Educator of the Year and in 2014, the VetPartners Distinguished Life Member Award.
EPISODE TRANSCRIPT
This podcast transcript is made possible thanks to a generous gift from Banfield Pet Hospital, which is striving to increase accessibility and inclusivity across the veterinary profession. Click here to learn more about Equity, Inclusion & Diversity at Banfield.
Dr. Andy Roark:
Welcome everybody to the Cone of Shame veterinary podcast. I am your host, Dr. Andy Roark. I’m here with my good friend, Dr Karen Felsted said she is amazing. We talk all about what is going on with practice sales in vet medicine, meaning corporations buying practices, individuals buying practices, individuals selling practices, corporations selling practices. What does this all mean? Where is it going? What are the trends? What can we look forward in the future? Because guys, I really do think that ownership of practices, it shapes the culture of our profession in very profound ways. And so guys, Karen’s got some of the best insight that I have heard on what this really looked like, and she changed the way that I thought a bit about how ownership is shaping up in our profession. So anyway, really interesting conversation. If you’re interested in things, the economics of our profession, I’m so glad she was here. She’s really, really amazing gang. Let’s get into this episode.
Kelsey Beth Carpenter:
(Singing) This is your show. We’re glad you’re here. We want to help you in your veterinary career. Welcome to The Cone of Shame with Dr. Andy Roark.
Dr. Andy Roark:
Welcome to the podcast, Dr. Karen Felsted. Thanks for being here.
Dr. Karen Felsted:
Thank you for inviting me.
Dr. Andy Roark:
It is absolutely my pleasure. You are a legend in vet medicine. For those who don’t know you, you do many things. You are a veterinarian, you are Dr. Karen Felsted. You are also a certified appraiser for veterinary practices. You’re a CVPM, you lecture all over the world, you write all over the place. I read your column in the Fountain Report, which is a nerdy business newsletter that if you like business, you should get it. It’s called the Fountain Report. I’ll put a link in the show notes. You write for Today’s Vet Business as well. I think I see you in AHA Trends sometimes. You tend to write all over the place. I remember getting started as a speaker and you were already established, and I have seen you do presentations on industry research. I’ve seen you talk about buying practices, selling practices. I’ve seen you talk about key performance indicators. I’m kind of a fan boy, if you haven’t noticed, I celebrate your whole catalog. I’ve watched you for years and you just do great, great work. So thank you for being here.
Dr. Karen Felsted:
Thank you. It’s very high praise from you because you’ve certainly done a fantastic job in getting out there and talking to practices and sharing information and making it fun and interesting too.
Dr. Andy Roark:
Well, thank you. So I read a lot of your stuff. I saw something that you wrote recently and you were talking about the veterinary practice sale market. And this is just something that I’m just really interested in is the buying and selling of vet practices. I think that there’s real implications for our future of our profession in what that looks like and how that goes. I will tell you, I’m kind of a romantic in the way of, I want veterinarians to be involved in running veterinary medicine. That’s a thing for me. I like small businesses and small business owners, and I want to keep that in our profession to some degree. And so I’m just interested in that and all those things that come along with the selling and buying of vet practices.
And so I want to talk to you about that today, and I really want to try to get my head around where are we with the sale market of vet practices. So let me start out wide, and I just want to ask you, just pitch you softball, but let you kind of open this conversation up. Tell me the story of veterinary practice sales over the last, say five years or so. So jump back two years, pre-pandemic-
Dr. Karen Felsted:
Pre pandemic.
Dr. Andy Roark:
And talk to me about what’s going on and then just bring me up to speed with where we are.
Dr. Karen Felsted:
Yeah, this is a great topic. I love talking about this topic because like you said, there’s just a lot of nuances to it and certainly had a major impact on veterinary medicine. Much of it good, some things I think are a little bit challenging. So it’s a good topic. But anyways, if we talked four years ago, five years ago, whatever, pre-pandemic, there were certainly a lot of corporate groups around then, you also had individual sales. And I think the biggest thing that we have to start off is by separating the sales market into selling a practice to a corporate group or selling a practice to an individual veterinarian, whether that’s an associate or somebody that you find through a broker and comes in and buys all of your practice because it’s the same in that you’re selling your practice, but the markets are very, very different.
If we’re talking about the really hot market these days, it’s the corporate sale market, and that’s certainly the one that gets all the discussion and that people talk about and the amazing multiples that get tossed around out there, the prices that people are getting. That’s from the corporate market. Certainly, corporate sales were very strong a couple of years ago, pre-pandemic, when finally the Coronavirus hit, I’d say there was a couple of months there, there was a little bit of a pause because nobody knew what was going to happen. And corporate groups and individuals for that matter were a little concerned about buying. Though I had a couple of individual sales go through at a time I would’ve considered the most risky, and those practices have done great. We got incredibly lucky in that we were designated in essential service. And so practices have done really well, as you well know, I mean sometimes almost too well. I mean, people are tired, they’re burned out. We struggle with mental health issues. But from a money standpoint, a business standpoint, it’s been great.
Dr. Andy Roark:
So hold on. I need to parse this apart a little bit. So convince me that there’s two different markets when you say selling to corporates and selling to individual people because I had not thought of it that way. I guess part of the thing I wrestle with is I look at corporations buying practices and I look at individual veterinarians wanting to buy practices, and I’m like, these are just different species. These are not remotely the same entities talking about this. So I just hadn’t thought of it as two different markets because if we’re buying and selling baseball cards, they’re just baseball cards. You know what I mean? And whether you are an individual person or a company, you’re still just buying a baseball card. So convince me a little bit more about these being two different markets. Help me crystallize that in my mind because that’s a different concept than what I’m used to.
Dr. Karen Felsted:
I think when I think about them being two different markets, there’s probably two major areas that drive that comment. So one is just if you sell to an individual, usually the practice is going to operate the way it’s always operated. Largely, I mean, it’s not that a new buyer won’t come in and make some changes, but it’s essentially going to operate the same way that it has. And you as the seller, sometimes you’ll stay in the practice, you may work full-time, you may work part-time, you may entirely leave, and the buyer, the individual veterinarian and the independent veterinarian buying the practice replaces you. Now, if you sell corporate, I mean, in many ways the practice operates the way that it has. It’s going to be in its same location. I mean, you’re still going to offer the same services. You’re presumably going to have the same client base, but there are some major internal changes there.
Probably the biggest area of changes, it’s not so much in the medicine side of it. I think most people that sell to corporate and most veterinarians who work for corporate are fairly pleased with how corporate approaches the medicine side. But there are definitely big changes in the management side. If you’re the practice manager, if you’re anybody in the practice who’s had a lot to do with the management of the practice, that changes. I mean, corporate’s going to have its own way of doing the accounting, its own way of the steps you have to go through to purchase supplies, drugs, equipment, whatever, their own ways of dealing with HR type issues. A lot of that is positive. A lot of that makes it very easy now. So practices get sick to death sometimes, or managers and owners get sick to death of having to do all that administrative stuff.
So now they don’t have to go out and find the best payroll service or find who should handle their retirement plan or whatever because there’s a group that’s helping them. Or I think corporate groups are better at finding veterinarians, although it’s hard for everybody right now. So the corporate group helps with that. They have definitely positive things that they do, but it absolutely changes what is done inside the practice. And people like some of that, but they don’t always like some of it and there’s no question that the corporate owners are going to do some things differently. So that’s one thing that to me makes this two different markets. And as a seller, you’ve got to make sure that you understand what your responsibilities will be going forward after selling and that you’re willing to do that. You’re almost always going to have to stay with the practice for X number of years, particularly in the smaller the practice is, the longer you’re going to have to commit to.
Whereas sometimes when you sell to another independent person, you can leave immediately. And now part of that is just because we have such a tight market for veterinarians, but the other piece, and this is probably the biggest one that I think drives that distinction of there being two different markets, is the price that’s paid. I would say typically when we talk about the multiple, that’s a translation of the profits of the practice into the price that somebody’s willing to pay. And the multiple is the number that gets you from the earnings, from the profits to the price. And I would say typically a multiple in an independent practice sale is somewhere from four to maybe not quite six.
I don’t really usually see them much over six, and five give or take a little bit is pretty typical. A multiple when you’re selling to a corporate group, and multiples are changing now, and we can talk about that as well. But instead of four to six, let’s say last year it was 15 to 20.
Dr. Andy Roark:
Yeah, that’s bonkers.
Dr. Karen Felsted:
So instead of getting a million dollars for your practice, you get four million dollars for your practice. I mean, enormous differences and the money that corporate can and will pay for it is different than what individuals can and will pay for it. In that regard it’s very separate markets, even though it’s the same practice.
Dr. Andy Roark:
Yeah. So when we talk about internal changes that we tend to see with corporates that will take over our practice, it’s been my impression that five, six, eight years ago, it seemed fairly rare that they would make significant internal changes or that those changes were few and far between. They would update generally the business operations, but left a lot of things alone. And it’s been my anecdotal impression that the number of internal changes have been increasing in recent years. And I don’t know if it’s because the market is becoming more mature. And again, I don’t have anything to back that up. That’s just me looking at practices and feeling like there’s a lot more change that tends to happen today than used to happen. And I think that’s probably a lot of the corporate groups figuring out how to run practices or how they want to run practices or their business is maturing. Does that resonate with you at all, or would you push back on that? Am I misguided?
Dr. Karen Felsted:
No, I think I could see that. It’s not the first thing I think of when I think of the corporate market, but I think that’s probably true. But I think it depends on the kind of practice you are. Largely, if you’re doing well, they’re going to leave you alone except for some of the things that are going to change. I mean, they’re going to change how you do the accounting, how bills are paid, how payroll’s done, how you order drugs and that kind of stuff. But a lot of the other stuff, they’re not necessarily going to change, but it does. If you’re doing well, they’ll leave you alone if you are not doing well, if the practice isn’t performing the way that they want it to or that it should, or there’s a lot of turnover in employees, or there’s a lot of customer pet owner complaints, then I do think they’re going to get involved more.
And I think that comes back to what you said. I think they’re learning how to run practices better, but I think they’re being forced to learn how to run practices better because it’s a challenging environment within the corporate world right now. And it used to be you could put together a small group and you could buy 100 practices and you’d flip it and you’d make a ton of money just through essentially the arbitrage effect. But now it’s not a guarantee that you’ll get this increased multiple when you sell your 100 practices or your 500 practices or whatever it is, and you’ve got to do better. And you may end up holding onto those practices for longer. And if you’re going to make any money out of it, it means operations have to be strong. And also with the prices that corporate are paying, profits have to be strong because they’re paying these enormous amounts of money even now with multiples coming down.
Dr. Andy Roark:
Yeah, I want to unpack the changes that we’re seeing in some corporate pressures, but first I just want to explore this. This is a little bit more in the two markets. In order to have a healthy market, you have to have buyers and sellers, that’s what makes a market. And so I understand who the buyers and sellers for the corporate market are. When you’re talking about the independent market, who are the sellers? Who are the people who are like, I’m-
Dr. Karen Felsted:
That’s a great question.
Dr. Andy Roark:
That 15 times multiple sounds high to me, I’d rather have four times multiples. How do I get in that market? Help me understand how that market survives.
Dr. Karen Felsted:
So it’s partially, I mean, probably the biggest distinguishing factor between the two markets is the size of the practice. And whether you measure that by revenue or number of veterinarians, that’s going to be the biggest. The corporate groups want a million and in half in revenue and two or three doctors at a minimum. A year ago, we were seeing corporate groups by practices that were, say a million in revenue and even one doctor practices, at least in my experience, they backed off a lot on doing that. And even that, I wouldn’t say was massively common. There were plenty of corporate groups that didn’t want to buy practices that small. So what, 50% of practices are still these tiny practices or relatively small practices. So those, they’re going to be sold independently because there’s no other way to sell them.
And then you do run into a few veterinarians who are just like, “I don’t like the corporate market. This isn’t where I want veterinary medicine to go and I’m going to sell it independently.” I’ve actually worked with two practices this year. One’s a big practice, I mean, close to five million dollars in revenue. They’d get a fortune if they sold it to corporate, but they’re not. He’s selling to an associate and another one that’s a little smaller, a couple million in revenue. Both of those though, most practices of that size, and similar to these practices, I’m thinking of sell to corporate, but you get a few that don’t, and honestly, those are really lucky associates that can buy those practices.
Dr. Andy Roark:
Yeah, I have seen some of those. That makes sense to me. I’ll buy into that. I used to think that we were going in a direction where independent practices would either, if you wanted to be an independent practice owner, you were going to need a startup or you were going to need to do a turnaround. But what I’m hearing from you is you can probably buy a small place that’s doing okay. All right, that makes sense to me.
Dr. Karen Felsted:
Yeah, you can definitely buy a small practice. I think buyers have less interest in doing that, independent buyers, but you can definitely do that and you can build it. And if you’ve got the ideas of how to make this be a cool practice and attract pet owners to it, you can do amazingly well with it.
Dr. Andy Roark:
Yeah. How do you think these two markets balance out, Karen? Are we going to a 60/40 corporate independent ownership ratio, or can you prognosticate that?
Dr. Karen Felsted:
Yeah, I would say that if we talk about general practices, because we’re mostly talking about small animal, both general and specialty practices. But let’s talk about small animal general practices. Now, I would say somewhere between 25 and 30% of the physical practices, the locations have been sold to corporate. So let’s say a quarter, little bit more than a quarter, maybe. Now when you look at it from a revenue standpoint, it’s probably twice that it’s 45, 50%, because they’re mostly buying the bigger practices. So if we talk about specialty in emergency, it’s a much bigger number. 70%, 80% of those practices have been sold. So that part of veterinary medicine is very, very corporatized. General practices less so, but there’s still a fair amount there that have been bought by corporate, at least from the revenue perspective, not so much the location perspective.
Dr. Andy Roark:
Hey guys, I just want to hop in really quick and give a quick plug. The Uncharted Veterinary Conference is coming in April. Guys, I founded the Uncharted Veterinary Conference in 2017. It is one of a kind conference. It is all about business. It is about internal communications working effectively inside your practice. If you’re a leader, that means you can be a medical director, it means you can be an associate vet who really wants to work well with your technicians, it means you can be a head technician, a head CSR, you can be a practice owner, practice manager, multi-site manager, multi-site medical director. We work with a lot of those people. This is all about building systems, setting expectations to work effectively with your people. Guys, Uncharted is a pure mentorship conference. That means that we come together and there is a lot of discussion. We create a significant percentage of the schedule, the agenda at the event, which means we are going to talk about the things that you are interested in.
It is always, as I said, business communication focused, but lots of freedom inside that to make sure that you get to talk about what you want to talk about. We really prioritize people being able to have one-on-one conversations to pick people’s brains, to get advice from people who have wrestled with the problems that they are currently wrestling with. We make all that stuff happen. If you want to come to a conference where you do not sit and get lectured at, but you work on your own practice, your own challenges, your own growth and development, that’s what Uncharted is. Take a chance, give us a look. Come and check it out. It is in April. I’ll put a link in the show notes for registration. Ask anybody who’s been, it’s something special. All right, let’s get back into this episode.
Let’s talk about what you touched on earlier on. Let’s start to unpack some of the changing pressures on the corporate sides and the corporate practices. So you said that their position is a little bit different than it used to be. Yeah, talk to me a little bit about that with we have rising inflation, we have possibly some pressures coming from being a more mature market. I think there was a lot of money flowing into vet medicine, and I hear whispers now that people kind of want to know what their return on investment has been, and there’s things like that. Is any of that true and does it look like?
Dr. Karen Felsted:
Oh no. I definitely think there’s more pressure on corporate, and I think the bubble has, if not entirely burst, it’s leaking a little bit. And a year ago, there was so much competition amongst corporate groups for the good practices. I mean, some of the prices that I saw are beyond belief, and I stopped telling clients, “oh, that’ll never happen.” Because as soon as I said, “That’ll never happen,” they get this totally astounding offer and I look like an idiot. So I have tempered how I phrased things.
Dr. Andy Roark:
Yeah, I understand that.
Dr. Karen Felsted:
Because it was nuts, but I think multiples are definitely coming down and I think corporate groups are managing their risk a little bit more. And it’s all because of the things that you mentioned. I think it’s two big issues. We have the inflation, we’re unclear what pet owners are going to do as far as taking care of their pets, and we also have the hiring problem. And finding a veterinarian right now is an utter nightmare. Finding a registered technician is an utter nightmare. And this is not anything that anybody thinks it’s going to change any anytime soon. Matt Salois, who used to be the chief economist with the AVMA, he did a webinar a couple of months ago. He thinks this is a 10 year problem. And I’m like, oh my God. That’s a long-
Dr. Andy Roark:
He’s been on the podcast a couple of times. Yeah, I really appreciate his insight.
Dr. Karen Felsted:
He’s great.
Dr. Andy Roark:
He’s a smart guy.
Dr. Karen Felsted:
And I believe him when he says things. So that’s a big issue. So because of that, the corporates are paying less for practices. Though if you’re a good practice, I mean, you can still get a very nice amount of money, but as I said, they’re managing their risk a little bit more as well, which means when they’re buying a practice, they’re buying revenue essentially, and they are working hard to make sure that that revenue is going to be in place. So if that means an owner doctor maybe a year ago would only have to stay a year and now they have to stay two years, or maybe it’s not an all cash offer. Maybe what they want is a joint venture where the corporate group owns 60% of the practice, the seller continues to own 40%, but they have more skin in the game. The seller has more skin in the game to make sure that this still works well.
Or they have earn outs, which means that you’ve got to hit certain revenue levels or profit levels before you’ll get all of the purchase price. Or the non-compete is more stringent than it used to be. And I think sometimes sellers quibble about that, but it’s kind of hard to complain when somebody’s handing you bazillions of dollars. I mean, you can understand why the corporate groups are nailing that down.
Dr. Andy Roark:
That absolutely makes sense. Where do you see this going? As you look ahead in 2023 and… Yeah, I mean, I know my crystal ball, I thought it was good until 2019 and then it just fell apart and it’s got duct tape on it now.
Dr. Karen Felsted:
I agree.
Dr. Andy Roark:
But yeah-
Dr. Karen Felsted:
I think prior to the pandemic, we had a pretty good idea where veterinary medicine was going. And now every time I think, this is what’s going to happen, it doesn’t.
Dr. Andy Roark:
Yeah.
Dr. Karen Felsted:
Yeah.
Dr. Andy Roark:
Yeah, I agree.
Dr. Karen Felsted:
I think independent sales, they haven’t been as heavily impacted by the pandemic as the corporate sales. Are there fewer veterinarians wanting to buy practices? Maybe, but we’ve been saying that for 10 or 15 years and yet it still happens.
Dr. Andy Roark:
I wonder about that. I think that there’s a narrative that, and there may be a little bit of misogyny baked in here of, as pet medicine has gone increasingly female, people go, “Oh, well, veterinarians don’t want to own practices.” And I go, “Are you just saying that, or is that really true?” I’m not sure I’m on board with that. I don’t know. Some people can make a good work-life balance argument and say, “Well, the younger generation doesn’t want that type of ownership.” And maybe there’s something true. I’m just not sold on the idea that entrepreneurial spirit’s not there.
Dr. Karen Felsted:
I totally agree with you, and I saw a very interesting study, I probably read this 10 years ago, and it talked about how women’s career paths are somewhat different from men’s. So men come in early, charging ahead from the very beginning. Women come in at the time they’re starting in their careers, they’re also starting families. They may have parents that they have to take care of, whatever. So you sometimes don’t see women really surge forward and want to own practices or start their own businesses or whatever until later in their careers than men do. So when we’re all busy saying, “Hey, veterinarians don’t want to own practices.” And certainly we’ve had the whole feminization of the profession, but some of that is we’ve also had women in the early stages of their careers. So I’m not completely convinced about this either. I do think the rising salaries, some veterinarians are like, “Hey, it’s just easier to stay an associate because I’ve got a great salary, good benefits. I want to have family time. I want to have time to do whatever my hobbies are.” And that does make it easier.
Dr. Andy Roark:
I see that with some of the corporate groups that I work with where if you’re in a well-managed practice, and boy, especially as busy as we are, if you get paid on production and things like that, there’s a lot of doctors who generate a really good salary for themselves, and they wash their hands at the end of the day and go home and nobody calls them and they go, I don’t have to worry about making payroll. Yeah, I like this. I definitely get that. I think it’s interesting. It’s interesting kind of the decisions that people make. Let’s talk a little bit about best practices, pitfalls on both sides. So let’s say that you were someone who, say you own a practice and you’re considering selling. Give me some, let’s start with pitfalls, most common pitfalls I want to look out for, and then a couple best practices. How do I do this?
Dr. Karen Felsted:
Yeah. I mean, you want to have a well run practice. Because I mean, everybody, whether it’s an independent veterinarian looking to buy a practice or a corporate group, the better run the practice is and the more profitable it is, the better that’s going to be for the seller. The more profitable it is means the more money you’re going to get for it, and the better managed it is, you’re just more likely to have more potential buyers. And so that comes down to all the usual stuff, better inventory control, expense control, a well-organized team, a well trained team, a well managed team, obviously good quality medicine, but I almost think that’s kind of a given. Good customer service, people like you, they come back to the practice. It’s all that same stuff we’ve talked about in management for as long as I’ve been doing this. And those are kind of the core basics, but I think they’re more important now than they used to be.
Dr. Andy Roark:
Yeah, that totally makes sense to me. All right. Let’s flip it to the other side and just say that you are a young doctor or a doctor practice management dynamic duo who I love to see. I love to see a technician and doctor buy a practice together. I’ve seen it a number of times. God, it just makes me happy for some reason I can’t explain, but I love it. So say we have our young entrepreneur or entrepreneurial partners and they want to do their thing and they would like to buy an established practice, give me pit pitfalls to look out, for best practices. What do you say to these people as you ride in the elevator with them?
Dr. Karen Felsted:
Obviously, it’s due your due diligence. And I know it sounds self-serving, but you need an advisor. Particularly on the financial side, because if you’re going to buy a practice, and this is whether it’s a veterinarian or a veterinarian and a non-veterinarian or whatever, but you need to thoroughly understand the price that’s being asked for the practice and whether that’s a reasonable price. And just because somebody puts a price out there doesn’t necessarily mean it’s a reasonable price. And sellers need advisors too, because they need somebody to help them decide what is a reasonable price. So you need financial and legal due diligence, and it doesn’t mean… You can find a practice that has some problems and as long as it’s low-hanging fruit, it’s things you feel like you can really make a change on, as long as it’s priced fairly to recognize the fact that the practice has those problems, that can be a great opportunity.
You don’t want to buy a practice that has some really significant deal breaker kinds of things. It has a terrible reputation in the community, or it’s going to take a fortune to buy the equipment that you now need or renovate the facility or something like that. I mean, there’s some practices out there that… There’s a situation I’m aware of where, I mean, there’s a veterinarian in a smaller community can’t even give this practice away. I mean, it’s too bad. It’s a sad situation when a veterinarian who’s had a decent practice for years and years and years ends up in that situation.
I will say if you’re a seller, and there’s not a lot you can do about this at some point in your career, but buyers are more interested in practices that are located in bigger communities. So urban areas, suburban areas. If you’re in Timbuktu, Texas, it’s a little bit more of a challenge to find an individual buyer or find a corporate buyer. But what do you do about makes sense that if you’re 55 and this has been your practice for 30 years? Then what you do about it is you focus on making the money you’re going to need for retirement before selling. And hopefully-
Dr. Andy Roark:
Yeah, I was going to say.
Dr. Karen Felsted:
[inaudible 00:30:42] You sell the real estate.
Dr. Andy Roark:
There you go. I mean, that’s really it, hope for the best and prepare for the worst to say, “Well, I’ve got 10 years before I’m out of here. I need to look at my cash flow and make this happen.” And the other thing I do see people doing, which I think can be a beautiful thing, is if you’ve got some time, is to build that pipeline and mentor somebody if you can. And say, “Hey, I know it’s going to take me a long time to find someone, so I’m going to go ahead and start 10 years early trying to bring someone in.” I’ve seen that that work for people if you can find the right person.
Dr. Karen Felsted:
If you can find the right person and somebody that wants to be in the community that you’re in, if you’re in Timbuktu, Texas, but you find somebody that grew up in Timbuktu, Texas and wants to come back there. Yeah, exactly.
Dr. Andy Roark:
I think it works better if you can also do the cash flow thing as well. Because when it gets sad is when people are desperate to bring someone in and it’s just a painful situation. It’s not good for anybody.
Dr. Karen Felsted:
It’s painful. Those are the worst situations when I get somebody call and they’re like, “I’m a one doctor practice and I could even be a very profitable one doctor practice, but I can’t find a buyer.” Or it’s a one doctor practice and it’s not as profitable as they thought it was. And it’s like, you should have thought about this 20 years ago.
Dr. Andy Roark:
Yeah, I know some very profitable, very good practices from a cultural standpoint, meaning they’re very happy and their teams are very happy. Don’t get the impression like, oh, if they had a great place, someone would want to come there and work there. Geography is a powerful motivator and moving to someplace that someone doesn’t have any roots and there’s not a lot of nightlife or opportunities for a spouse, those things are hard. Nobody’s doing anything wrong, but those are obstacles. What are your favorite resources for somebody who’s interested in this? They want to learn more about how veterinary markets work or what’s going on in our profession, or part two, if they’re interested in buying or selling a practice, where do you send people just to get started reading and learning more?
Dr. Karen Felsted:
So certainly if you look at many of the conferences that are out there, whether we’re talking in-person or virtual, there will often be a session or a couple of sessions on buying or selling a practice. That can be useful. Look at some of the major publications out there. So you mentioned the Fountain Report. You mentioned Today’s Veterinary Business. They will regularly have articles on buying and selling practices. That can all be very useful. Like I said, again, I understand it sounds self-serving, but I strongly believe that you need a good team when you’re buying a practice or selling it, either way. And you’re going to need a financial advisor to help either put a price on the practice or evaluate an offer being made. And you are also ultimately going to need a legal advisor as well, somebody to help with the contracts for that.
I think that that is critically important for any practice, purchase or sale, especially important on a corporate sale because they have fleets of Wall Street lawyers who are protecting them, the corporate groups. And so a seller needs that as well, but it’s important all the way around. And then ultimately they’re going to need, everybody has a strong sense of how to run a practice once they come in. And so when you talk about getting up to speed and resources and stuff, a ton of what’s available out there at conferences and in publications and webinars and whatever, it’s just about how to manage a practice. And so thinking about, okay, what do I want this practice to be like once I own it? And that’s a little bit farther down the line, but you can’t start too soon on that.
Dr. Andy Roark:
Yeah. Karen, where can people find you online? How can they reach out if they have questions, things like?
Dr. Karen Felsted:
That? They can reach out to me. My company name is PantheraT, which is P-A-N-T-H-E-R-A-T. It’s short for Panthera Tigress, which is the genus species of tigers. And I just picked it because I wanted kind of an interesting and fun company name, but when I called GoDaddy, the guy said, “Pan the Rat, is that really what you want for your domain name?” So that was an unintended consequence.
Dr. Andy Roark:
Oh, that’s so funny. Pan the Rat.
Dr. Karen Felsted:
But people remember it.
Dr. Andy Roark:
I thought it was, I was Panthera. I thought you were big into eighties heavy metal. That was-
Dr. Karen Felsted:
No, it’s the genus and species of tigers. So like I said, I like tigers. Just wanted to do something fun.
Dr. Andy Roark:
Pan the Rat.
Dr. Karen Felsted:
So you can Google PantheraT, you can Google my name, it’ll come up. But love to talk to people about anything that they’re dealing with in their practices.
Dr. Andy Roark:
Well, you are amazing. Thank you for being here. I’ll put links in the show notes for the references that we talked about. I’ll put links for-
Dr. Karen Felsted:
Pan the Rat.
Dr. Andy Roark:
Now all I can see is Pan the Rat. That’s all I can see when I look at it. Anyway, I’ll put links to Karen and Karen’s practice as well. And yeah, guys, she’s wonderful. If you have questions, definitely reach out. Gang, take care of yourselves, be well everybody.
And that’s it guys, that’s our show. I hope you enjoyed it. I hope you got a lot out of it. Special thanks to Karen for being here. She is amazing. If you enjoyed this show, as always, tell your friends, share the podcast. Leave me an honest review wherever you get your podcasts. It’s how people find the show. It means the world to me. And if you’re like, God, that Andy Roark is so awesome, I’d love to hang out with him.” Check out some of my online training courses for teams. I have a Charming the Angry Client course and a Exam Room Communication Toolkit course. They are on-demand courses. They’re made for teams to take and for groups to take together. It’s all about discussion questions and I’ve got some goofy video examples and things like that. But anyway, you guys be well, take care of yourselves. I’ll talk to you soon. Bye.
