This Practice Owner is worried about their next steps after being with the practice for over 10 years. In this episode of the Uncharted Veterinary Podcast, Stephanie Goss and guest Bret Halishak discuss the challenges solo veterinary practice owners face when considering their exit strategy, and how to position their practice for future success. Bret provides valuable insights on maximizing practice value, operational efficiency, and the importance of team development. He emphasizes the need for practice owners to understand their financials, leverage their team's skills, and build a strong practice brand that is not solely reliant on the owner. By implementing these strategies, practice owners can create a sustainable and attractive business, ensuring a successful transition and preserving the legacy of their independent practice.
Bret Halishak is a practice broker with Total Practice Solutions Group, specializing in helping veterinary practice owners in the Great Lakes region navigate the complexities of selling their practice. With a background in practice management and a deep understanding of the veterinary industry, Bret is passionate about helping practice owners achieve their financial goals and find the right buyer for their practice.
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🌟 Level Up at the 2024 Practice Owner Summit! 🌟
Ready to take your practice to the next level? From December 5-7, 2024, the Uncharted Practice Owner Summit in Atlanta is the ultimate event for veterinary practice owners looking to grow their business and gain control over their future. This year, connect with Bret Halishak, a seasoned practice broker who specializes in guiding practice owners through buying, selling, and maximizing the value of their businesses. Join like-minded owners facing similar challenges, learn proven strategies from top experts, and work on your long-term goals in a collaborative, fun environment. Whether you’re looking to streamline operations, explore transition options, or reclaim more of your day, this summit will give you the tools and connections you need to thrive. Don’t miss out—secure your spot now and join a community dedicated to helping you succeed!
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Episode Transcript
Stephanie Goss: Hey everybody, I am Stephanie Goss, and this is another episode of the Uncharted Podcast. And this week on the podcast, I am joined not by my partner in crime, Dr. Andy Roark, but by my dear friend, Bret Halishak. Bret is a practice broker , which means that he helps practice owners find buyers for their practices.
He helps practices understand what their practice is worth long before they're thinking about selling. He works with Total Practice Solutions Group and he is in the Midwest. He is a dear friend. They are a supporter of Uncharted, but Bret is here today because he and I have had such great conversations over the years about how to help private practice owners stay private and be indie and have that rebel spirit. And we got a mailbag from a private practice owner who is a one doctor practice who maybe is asking some questions about Is it wrong if I want to stay a one doctor practice and is it wrong if I want to stay independent in this ever increasing consolidated world of veterinary medicine?
This was such a fun episode. Let's get into it.
And we are back. It's me, Stephanie Goss, and this week I am joined by my Dear friend, Bret Halishak. Bret is a practice broker with Total Practice Solutions Group, and Bret and I have known each other for a few years now, and we got a mailbag question from a practice owner who has some questions about exit strategy. And Bret was the first person who came to mind to talk this through. Bret, welcome to the podcast.
Bret Halishak: Long time. First time. I'm happy to be a part of it. Thanks for having me.
Stephanie Goss: I know. I'm so excited. Bret and I have had awesome conversations along the lines of this mailbag question before. And so I was really excited to bring him on to the podcast. Bret, do you want to introduce yourself to everybody and tell them a little bit about how we, you know, how we got to work together at Uncharted and kind of what you're up to because your role, you've been in the industry a long time in multiple facets and you your role has kind of changed in the time that we've worked together at Uncharted.
Bret Halishak: Currently I'm a practice broker with Total Practice Solutions. I'm in the Great Lakes, so I'm in the great city of Cleveland, Ohio. I know, I know it's not for everybody, but it's near and dear to my heart.
Stephanie Goss: Yes, I was just there this weekend. We were just talking about that.
Bret Halishak: Yeah. Everyone loves to come to visit. Everyone loves to leave sometimes,
Stephanie Goss: Yep.
Bret Halishak: but neither here nor there, there's obvious discourse on Cleveland.
But I've been a part wit h TPSG for almost two years now. And I love what I do. You know, sometimes practice owners are well prepared to exit. Sometimes they're not. So we meet in the middle, we help provide practice valuations so they understand the financial health of their practice, which is great.
Sometimes that can be eyeopening. Sometimes that can be reassuring depending on what side of the coin you're on. But ultimately we help people buy and sell their practices whether that's on a private sector or in the corporate world as well. We're a one stop shop for veterinarians, which is great.
Stephanie Goss: Yeah, you and I have had a lot of conversation because we met working together for our practice owner summit several years ago. And you've been kind of all over the map in different, in different facets of, of the industry, like we talked about, and you have such a unique perspective, I think, because you've, you've worked on both sides, like you've worked with practices not obviously at their end of life and trying to sell and get out of practice as a broker.
But and one of the first conversations that you and I ever had was about how often we have practice owners who get to a place where they are ready to get out of practice and they have no clue how many years of prep work they have in front of them. And they're like, okay, I'm ready to be done now, not realizing that they should have started that process of, okay, I'm ready to be done now, probably five, and even in some cases, 10 years ago, to get their practice to the place where they want it to be in order to get out of practice and maximize their sale. And so you and I kind of bonded over our desire to help practice owners understand their own finances, understand their own, you know, practice numbers and really help set them up for success so that they weren't in the position where.
Their only option was to sell to a low ball corporate offer or close their doors entirely because they were what's considered a no low practice. So no, or low value at the time of sale. And nobody wants to buy it from them or a bank won't fund the private sale to an associate if they find one or, or whatever.
So, I love your, passion for helping. Practice owners. And it's a big part of why we're going to have, we're going to see you. I'm going to get to see your face in real time in, it feels like just a couple of short weeks, but we're going to be together in Atlanta December 5th through 7th.
We have our, this year's practice owner summit, and there's still time. If you are a private practice owner and you want to join us and join other practice owners Bret is going to be there. You're doing a workshop, right. At practice owner summit.
Bret Halishak: So yeah, we'll have a couple of my colleagues down there, but we'll be doing a workshop on just planning for your financial future. You know, for the first hour, we'll do some discussions around where your expense ratio should be. Some KPIs, some key performance indicators. And then the second half we'll be doing some applications.
So rather than just, you know, listening to the talk, we'll go through some numbers, see where you stand, see where we can maybe make some improvements. Some attagirls, some attaboys, you know, we'll make sure to cover the whole gamut to make sure everyone is on the same page with where they stand and where they need to be.
Stephanie Goss: That’s one of the things that I love about working with you is that you really want to help practice owners understand it and make it simple for them. And so I'm excited to, for them to actually be able to bring their own practice numbers and kind of dive into things in the workshop with you and with their your colleagues and we've got a great lineup for Practice Owner Summit. So if you're listening today and you're a practice owner and you'd like to join us, you still can and if you head over to the website at unchartedvet.com/events you can find the details for Practice Owners Summit.
Summit, and if you're listening today and you're like, but I'm not a practice owner. I think that if you have an interest in being a practice owner or really honestly, if you are a practice manager, this episode is also for you because one of the key functions for me as a practice manager always was to help my practice owner when I was in private practice.
But applicable I think to corporate practice as well. Like your job as a manager is to help the success from a business perspective of your practice. And so understanding what is required to get out of practice or to grow practice to that next level is really really important. And that's what we're gonna be talking about today.
So I got a mailbag letter from a practice owner who is a solo practitioner. So this is a private practice model. But again, I think this applies to corporate practices as well. Having worked in corporate practice as a manager in terms of leveling up and growing the practice to the next step. But this is a solo practitioner.
They've been in practice and out of out of school for about 10 years. And they said, you know, like, like many of us, I'm seeing a significant shift in our industry practices that used to be one or two vets and sell as a one or two vet practices seem to be growing to that three to five doctor model in order to sell.
And so they find themselves considering that what is the path forward? Is this the right path for their own practice? And they said, you know, I'm trying to find a single associate, but that's hard. And so. Growth is exciting and it comes with a lot of questions and what you know, especially as someone who is looking at continuing to be a private practice owner and their email was so great.
They had so much wonderful things to say about their clients and their team and the culture. That as a solo practitioner, they've spent 10 years building. And I can imagine in my head after reading this email, this practice, right? It's the kind where the doctor probably knows all of the clients. The team knows the client.
You walk in the lobby and you immediately get that. Everybody knows me here kind of feel right. Like that's what is so special about those smaller practices that really have that that strong culture where they have. built a little corner of their community. And so this doctor is like, look, I love that.
And I have been committed to building that kind of culture so that I could bring on an associate who would want to buy the practice from me. And they're feeling pressure because they're at a point where they are starting to think about what. Their exit strategy might be, and they feel like what they're seeing from their perspective, and I'm curious to hear, Bret, your thoughts on is this actually reality, or is this just their perception based on their seat where they are at the moment?
But they said, you know, it seems like banks are less willing to fund the sale of privately owned practices especially for smaller practices that they want to see the bigger returns that corporate Corporate practices are still offering significantly higher multiple multipliers compared to private practice sales.
And so they're like, you know, I feel this fear that the deck is stacked against independent. practice owners and future owners, and that I'm worried that if I do grow my practice and I become a three to five doctor practice or even a two to three doctor practice, that then my only option will be to sell to corporate because banks won't fund a single owner when you have that two to two to five doctor volume, gross volume, I guess, and revenue every year.
And so they said, how do I, how do we continue to support that midsize and very small practice model, ensuring that they can stay private when it feels like the financial barriers are stacked so high against them. And so they're asking like, how do we keep private practice ownership, attractive to people and feasible in rising corporate interests.
You know, we've seen the landscape shift significantly, even just in the last five years in terms of corporate versus private. And so I just thought this was such a well crafted question and ask and is really, really relevant in the landscape of the industry today. And I thought there was no one better for me to chat this through than my friend, Bret Halishak. So let's get into it, friends.
Bret Halishak: Absolutely.
Stephanie Goss: So what do you think like off the bat from a headspace perspective, because this is one of the things that you do so well, you have such a gift with empathy and really seeing the world from the perspective of the practice owner. So if you're this practice owner and you've been out of school 10 years you're probably in your, you know, I would say maybe mid forties, you're thinking ahead smartly to retirement.
Which is not imminent necessarily. So you're thinking ahead. What are some of the things that you should think about from a headspace perspective as you kind of approach this? Do I do the dance with the devil and grow and become corporate? Do I stay small and be an indie rebel? Like I love that spirit and I wanna, I wanna take care of my team and my clients.
And in the middle of that is this, the wrestling between the two sides of when you buy a practice and you are a practice owner, I don't care who you are. I don't care what you think your goals are. A part of that decision is this is part of the nest egg strategy for retirement. It may be all of the nest egg, or it may be part of the nest egg, depending on how well you've planned.
But no one gets into practice ownership without thinking about the return on the investment at some point down the line. So what are some of those things that this practice owner and all practice owners should kind of think about from a Headspace perspective?
Bret Halishak: Yeah, absolutely. And you know, that's a great mailbag question. So thanks for thinking of me and having me on again. But to your point, this conversation happens frequently, whether it's a phone call, you know, an email a trade show booth, you know, people walk by or just want to talk to say, Hey, I'm a single doctor.
What do I do? Like they're already maligned to the fact that they are on one end of the spectrum where they don't want to be, but they want to be somewhere else. So
Like you said, I like to be empathetic, but also comforting. Like you're not alone. There's a lot of people out there like this. And to your point, the question is, do I rip off, rip off the bandaid?
Do I jump in? Do I go, okay, I got to grow this by another doctor or two. What's involved in that? How do I do that? How's my staff going to react? Because it's going to be longer hours for them, potentially, you know, there's a whole not massive shift, but yes, there is, there's a paradigm shift involved with doing that.
And it all depends on the type of practice and the type of mentality that I find with the owners. You know, for this, you know, one specifically, you know, in their early, mid forties, you know, there's a lot of time left. It depends on when your retirement age is and what your goal is to your point. The nest egg, is it all?
Is it some of it? Hopefully it's not all of it. You know, that's one thing we encourage practice owners is, you know, don't bank on your, your exit strategy being your loan nest egg to fuel your future. You want to make sure that you're doing some other things that you're not put in that situation. But in this situation, I would definitely say go for it.
You know, there's some things that you got to make sure are in line, like I mentioned staff and some other things. But the one thing that I constantly see with some single doctor practices that are on the cusp of do I grow or do I stay the same, you know, the Indy model, like you mentioned, it's one of those where how can I invest in the practice without disrupting the practice?
I think sometimes that's where a lot of practice owners get wrapped around the wheel is I have to do this. I have to do that. Well, let's take this apart piece by piece. What can we do here? What can we do there? Where's some short term gains and where's some longterm gains? What are some things that I can implement with my staff?
That's not going to disrupt everybody. That's the low on a change management dial. And, you know, to your point, being in the industry for 16 plus years I've had a wealth of knowledge with practice, workflow, practice, efficiencies, things of those natures that can help aid to that growth before you actually take the rip at the mandate off and say, okay, let's go find an associate.
Let's go find a partner, a co-owner, all depends on what type of structure that you're looking to implement in your, in your practice. Again, you know, for this type of question and this type of, you know, where they're at in their career, hopefully they're working with some type of externship or internships where they're able to get some more newer potential opportunities in the, in the practice.
You know, I think that's where a lot of people have had success that I've worked with some operators throughout the country and, you know, specifically in the great lakes, you know, luckily, you know, we're in big 10 country where I'm at. So there's a lot of veterinary schools around us, which is, you know, very fortunate for a lot of people I'm talking to, but, you know, making sure you're engaged with those communities is huge, whether it's the technician school, whether it's, you know, with the school itself.
You know, there's a lot of different students that are looking to come back to where they're, you know, where they're from and try to see what they can do. It's one of those where again, if you're able to implement, you know, some minor items to help make your practice attractive, that's huge.
Stephanie Goss: There's a couple things that you just said that I want to, that I want to pick apart. And I want to, I want to go back to one of the, one of the first things you said, because I think for a lot of people there is this question of should I grow? And when we ask ourselves that question, one of the things that we're doing is comparing ourselves to others, right?
And Andy and I talk about this on the podcast all the time. Should is a very dangerous word. And I think there is this perception and I got this sense from this mailbag letter. There is this perception in our industry that everyone has to grow or you're going to die, and I think one of the headspace pieces that's really important, and one of the things that I love about your what you just said, and this is the second piece I want to pick apart, is that No one is telling you, no one is standing over your shoulder saying you have to grow and I think that there's this perception for practice owners that like the idea is you're going to always grow incrementally year over year over year and I think one of the things that I love about the uncharted community and being able to connect with so many different people in so many different geographic areas.
I mean, we have members across the entire world which big shout out to our Australian members who listen in what is like the middle of the night or the middle of the night, their time in the middle of the night, our time. But you know, we have people in all different demographics and the reality is there always have been and always will be practices of different size and The should is really dangerous here because I think from a headspace perspective, I think it's okay to spend some time wrapping your head around, what is it that you actually want?
Like, stop comparing yourself to everybody else. Stop worrying about what you think you should do. And I think the question from a sales perspective, and this was, this was a question you and I talked about the very first conversation we had, where we had practice owners who were all fired up and had no clue about their practice finances was like, let's stop thinking about the should and think about what is it that you want?
Number one. And then the second question, which is a very separate question, is what is it that you need? And so I think those two are really important because you do this work as a broker now. But it's like, what do you want? Okay. If you want to stay in an independent practice, if having the culture, if having the team taken care of, if those things are high on your list.
You got to write those down. That's important. It's important to know what are those things that you want and what are the things that you need is the secondary question because you may want to stay in independent practice, right? You may want to take care of your team and you may need to get the highest amount of sale possible because you haven't planned for your future. Knowing the answers to those two questions, you're never going to be able to walk yourself easily down a sale path and figure out how to get the best possible sale. But the other piece of that, that from a should perspective that I think is really important is I can't tell you how many times I talk to owners who are comparing themselves to their peers, to the other practices around them, who feel like they should grow and that all they're seeing is this emphasis and I see it as a manager, our industry puts a significant emphasis on growth, year over year growth, revenue growth, change in the number of doctors, change in the size of the staff, all of those things, and it is perfectly acceptable to lean back and say, I don't want to grow, right?
Like, and I think that's the big, the big scary that people are afraid to say no. And so I, I think it's really important to tease that out from what you were saying, because there is a path. forward for all size practices that have to your point. And this was the other piece that I want to get into. You can make changes, especially now, if you're a younger practice owner, you can make changes that allow you to say, you know what? I want to stay a one doctor practice. Like maybe the thing that you want. Yeah. is to sell to an associate who is going to have the practice be their baby the way that the practice has been your baby.
You can do that. And to your point, that still involves making some changes. It still involves workflow analysis. It still involves the prep. Because when you sell as a one doctor practice, It is going to be, and correct me if I'm wrong, from your experience as a broker, it is going to be light years easier to sell to a new grad if you have an electronic medical record system versus paper records.
If you have a team that is efficient and effective, if you have a staff training program in place where you are investing in to your point, whether it's an, an extern program, or you're bringing people in from the outside to develop them as, as licensed technicians, whether it is training from within and supporting and, you know, pouring back into your team.
Practice owners. There are practice owners, potential practice owners out there who desire every size practice and every look practice under the sun. There are people out there for you. And I think I'm curious about your experience with this as a broker. Like the magic is in creating the appearance. The picture and painting that picture for your potential buyers so that the matchmaking happens significantly easier.
Is that accurate in your, in your perspective?
Bret Halishak: Yes and you just took the words right out of my mouth. You know, you can take a step back a little bit. I know the Uncharted communities, you know, very supportive of the V BMA as am I you know, for college students, the Veterinary Business Management Association being Andy's you know, a co-founder or
Stephanie Goss: Yes.
Bret Halishak: You know, I love speaking to them. I love interacting with them. They're a great bunch. Even if you're not a VBMA member, right. You know, it's always good when I go back to schools and talk to them. And it's one of those where you don't know what you don't know. So what I usually educate them on is yes, practice ownership is a reality.
It's not as hard as it may have been in previous decades, you know, whether it's, you know, financing some other opportunities, you know, there's a lot of different opportunities that prior generations did not have that they have, and we don't know that. So I always have a survey at the end of every session just to say, Hey, listen here, you know, where are you located?
Do you need help finding a clinic for an externship? And more importantly, are you interested in ownership? And usually, you know, depending on how many students you have attend those lectures, you I hate calling them lecturers because you don't want to, you know, you know, talk like that to them. It's more of a conversation.
But anyways, you know, they usually say yes from 60 to 80 percent of the time, yes, I want to be, you know, so that's a great start is yes, they want to do it, but how does that become a reality? So to your point, You know, when I'm working with single doctor practices and we go through an office tour or whether it's, you know, me seeing the practice for the first time or a potential buyer seeing the practice to your time, the first time you're right, they go through and there's almost like a checklist.
Does it have this? Does it have that? Does it have this? And if there's a lot of no’s the back of their mind, they're like, well, I got to spend money here. I got to spend money there. I got to spend money here. So it was almost like a laundry list of improvements that they think they have to make day one is almost insurmountable in their eyes.
They listen, you know, this practice is, you know, doing great profitability. It's, you know, it's doing great for the community, but I already have to fix up the exam room. I have to fix up the break room. I have to do this. I have to do that. And it can be overwhelming to a potential buyers. So to your point, you want to illustrate or paint that picture.
As well as you can so that it's not turnkey. We know You know, we, we know that every clinic or every practice cannot have all the bells and whistles. You know, we can't have all the diagnostic equipment they want and depending on their budget and, you know, how they've, you know, they've kept up with the facility over, you know, over the last couple of years.
But at the same time, if you minimize that punch list of things that need to be improved upon or planned out. That helps exponentially for a lot of single doctor practices and even, you know, bigger practices than that, you know, that's the unfortunate part is, you know, I'm a numbers guy. I know numbers are not for everybody, but it's one of those where numbers tell a lot.
You can tell a lot through the numbers. You can see how a clinic operates even without getting in there, but then once you get in there, you can say, okay, you know, this is good. This is good. This needs work. You know, so on, so forth. So the more that you're able to have that picture as completed as possible puts you in a way better position than a lot of other still not to practices you know, on the flip side, you know, when I work with some, some practices, I walk in and say, okay, this is needs a drastic overhaul.
Then that's where, you know, a lot of people are like, okay, do I do a startup? Do I do this? Do I do that? And we all know that with the cost of materials, startups are maybe not as cost effective as they used to be. So it's one of those where you have to weigh all the pros and cons. And the more that you set yourself up to make yourself attractive to a lot of different associates or new grads, that's huge.
It really sets you up to make sure that you're set up for success.
Stephanie Goss: Are there other questions, I guess, because you, you know, you, you have worked with practice owners throughout your career. The different facets of your career. Are there other questions besides asking yourself, what do I want and what do I need? Are there other questions that someone who is in this practice owner shoes and thinking about, you know, how do I figure out which path forward?
Right? And that's what I loved about their question is I imagined this person standing and they've got, they see multiple paths laid out in front of them. They're not pigeonholed into one, necessarily into one path. They're like, oh, well, I could find a single associate and sell to them. I could grow to a two doctor practice.
I could, you know, like they're seeing the potential and they're young enough in their career that they're like, okay, let's do it. I have all these paths in front of me and so doing the work to ask yourself, what do I want, what do I think I need at the end of this, if I was this practice owner and I came to you as a broker and I said, hey, I'm interested in knowing what the value of my practice is currently because I'm thinking ahead, I'm, you know, planning ahead, I've got plenty of time until retirement.
Here's my wish list of the things that I want to get out of the sale of my practice. Eventually, you know, I want to take care of my team. I want to take care of my clients, whatever that list looks like. And here's the list of the needs. I need to sell my practice for X number of dollars, or I need to sell it for X multiplier, or I need to make sure that I keep the real estate or whatever that list is.
And it's going to look different for every practice owner based on the setup of their practice. Are there other questions off the top of your head that you can think of that someone should ask themselves before they start digging into the actual action steps and work that they need to do to prep themselves for potential sale someday?
Bret Halishak: I mean, I think we'll, we'll start with what you said first is just, you know, do they understand their practice financials and does it support potentially the growth, you know, We all know that the cost of labor is increasing, the cost of, you know, goods sold is increasing, you know, whether it's distributors or manufacturers.
You know, it used to be promised that there was, you know, one price increase a year, and now I'm talking to clients that they're incurring anywhere from, you know, two to three to four price increases a year. And, you know, one of my first questions I always ask an operator or an owner is, when is the last time you had a price increase?
And I'm not here to say that, you know, price increases are mandatory, you know, yes, they should be strategic and they're not something you should be doing once a year. But at the same time, there's costs being injected into the practice all over the place. You need to plan for that. And to your point, you know, it's one of those, okay, I've established my want list.
I've established my need list. How do I go from here? You need to make sure that you have a practice evaluation done every so often, because if you don't understand your own practice expense ratios or where you are aligned with some certain items, your projected retirement could be way further out than you think.
So to your point, it's one of those where if I say, okay, I'm ready, I'm, I'm grossing just over a million dollars, you know, we're turning away clients. I'm booked out of surgeries, you know, three or four weeks. We hear this all the time. What do I do next? Well, it says, okay, how is your cost of goods sold compared to everything else?
How is your, your support or your lay staff? Because unfortunately, you know, what we've seen a lot is those numbers have ballooned up and they haven't fixed the other things around them to make sure that it's offsetting those, those increases.
Stephanie Goss: I love that you said that because I think we both know most people get to that place where they're booked out, you know, a month or further, they've got clients coming out their ears. The team is running from the minute they open the doors until the minute that they close.
And the first thought that goes through everyone's head is I need another doctor. And the smart question that should run through our head is, have I maximized efficiency in the other areas of my practice? To your point, have I looked at my numbers? And that's scary for a lot of people who don't understand how to approach Even tackle it, what the numbers mean, how to approach them, what do you look at?
How often, all of those questions. And the other piece of it is have I looked at our efficiencies and processes? And I love that you bring that up because if you haven't looked at those two things, no matter how busy you are, you're not actually ready for another doctor.
Bret Halishak: Yeah. And, you know, unfortunately when I talk to clients, it's like, Oh, my top line revenue, it's growing. It's growing year over year. I'm, I'm above 10%. I'm like, that's great. That's great. But do you know if it's a leaky bucket if our ratios and our expenses aren't where they need to be. Sometimes it doesn't matter how much you grow revenue.
You're still having problems with the infrastructure. So if you're, you know, there's all these different key performance indicators, depending if you're rural or suburban or, you know, whatever different types of area where your lay help or your support help support staff help percentage should be, you know, it can range in a wide variety and also the type of practice, whether it's, GP, whether it's, you know, ER, so on and so forth.
So it's one of those where if you don't know, you don't know, you could just you can just literally be losing everything out the bottom of it, just because you don't know how the infrastructure is set up, how it's maintained and what you need to do to make sure it is maximized efficiently.
Stephanie Goss: So I want to be Mythbusters here for a second because I think that this is really important and this is, this is important especially for my practice managers who may hopefully are still listening to this because I as a practice manager knew that one of my areas getting into being a practice manager one of my areas of weakness was I didn't understand the business financials.
So I took business classes and I did education. I went to CE and I soaked up like all of the financial lectures. Denise Tumlin, Karen Felstad, they became like my financial gurus. And I learned so much and I am that kind of person where I'll talk to anybody. And so as a young manager, I remember very distinctly going up to Denise after one of her lectures and saying, Hey, I have a bunch of questions. Can I, I don't know if my practice owners know the answers to any of these. And so can I pick your brain? And so I formed relationships with her and Karen over the years and I learned a lot by asking them.
And so as a manager, that's how I learned from the two of them, this myth busting, which is, I think a lot of practice owners and practice managers think that the only time That you do a practice valuation and a lot of people are like what is even a practice valuation and at its simplest and correct me if I'm wrong the practice valuation is someone a professional sometimes it can be a CPA someone that sometimes it can be a broker someone helping you look at your practice on a working level the valuation looks at your practice looks at the numbers and says if you were to sell your practice today this is the ballpark.
Now, if you're not doing evaluation for a sale, it's not as fine tuned. If you're doing a working valuation, it's more of a ballpark range, but it gives you an idea of, to your point, do I really have the option to sell in the next five years? Or is this forecasted 10 to 20 years down the road?
Because I have the leaky bucket and I may be making the top line revenue, but it's not trickling down to the bottom line. And so I am currently sitting on a very low return practice because the growth is not trickling down to the bottom line. And you can do that. You like, this is a service that you guys provide.
And so that was as a manager, like I learned this and I, who knew that was a thing. And I remember the day that Karen, Karen looked at me and she said, well, when is the last time that you practiced at evaluation? And I was like, okay. I don't think that they even know what that is. So I'm going to say never.
So she's like, okay, step one let's start there. And so I learned as a manager, like you, like you had said earlier, this is something you should be doing periodically. And so from that point forward, generally every two to three years. I was having our practice evaluated and getting that ballpark of what is our actual growth, not what do I think the growth is, how do I interpret the numbers as a person working from inside the practice, but how does someone on the outside who would be helping either to find a buyer or helping us sell the practice.
How does a professional value this? And that way I'm armed with more information when I have conversations with, let's say that young associate that I found through an intern program. And now they're asking me about what is the potential for me to buy in as a, as an owner someday, or, you know, I'm like, well, Sutton, something has happened in my personal life.
And now I need to, Get out of ownership and I'm going to go to the table and do the dance with a corporate group. Information is power. And so that's I think one of the things that I love that you're such a strong advocate for is know what you don't know what you don't know. And so let's start with that before you go You know trying to figure out how do I add another doctor?
How do I hire another associate like let's start with the things about the business that you may not be comfortable with
Bret Halishak: yeah. And I, I'm a big proponent of working backwards. So, you know, to get into this, let's say this, you know, we go back to the 40 year old owner that we talked to over mid forties. It's one of those, well, let's say hypothetically, they did find someone that was wanting to come on on their staff and we don't know their ownership ambitions, you know, playing that seed or having that conversation, not right away.
Like, you know, day one, say, Hey, do you want to be an owner? You know, obviously it'll let them get acclimated to the practice, but eventually having that conversation and establishing timelines is crucial. So again, going back to that mid 40 owners, let's say hypothetically that new grad wants to buy in with the next five years after they get their feet wet, they understand the practice, they understand the community that puts you at 50.
Let's say now you grow in the office. Let's say you have maybe an expansion. You go from three exam rooms to four just because you guys are busting at the seams and you need more room for the staff. You know, that's another five years. And then the conversation becomes, okay, what is your goal? What, what do you want to become?
So now just, and again, I know this is all hypotheticals. We've already advanced almost a decade from our original conversation. We're in our mid fifties. You know, if they have a family of their own, maybe they're off to college, they want to go support them in college. You want to be able to go there on the weekends for football games, whatever that, you know, whatever the scenario is, you have to work backwards and establish that timeline.
And I think you, you really struck a chord that really resonated with me and, you know, I love my job. I'm a glass half full person. I wake up every day and say, Hey, we're going to change the world today. Um, Obviously, you know, there's some, there's sometimes where you're put back in your seat and say, listen, today's not that day we'll, we'll take that on another day, but it's one of those where, you know, some phone calls I get is, you know, Hey, something happened to either me, my spouse, my partner, and I need to sell the practice today.
And it's just like, okay, to your point, when's the last time you had a practice valuation, never had it. And that's where I'm always like, okay, we're going to get, we're going to be in for a bumpy ride potentially. And obviously you're hoping for the best, but it's one of those where you always want to be ready.
And it's not something you want to say, you know, you have to be extra vigilant to say, Hey, we can't do this. We can't do that. You know, there are some certain things that you don't want to make sure you want to make sure you don't do if you're ready, if you're getting ready to sell, you know, is it the smartest thing to sign a five year agreement?
If you know you're going to sell in two to three years, not necessarily because you don't know if those are reassignable, if those could be assumed to the new owner things of that nature. But ultimately you always want to stay ready because you never know when you're going to get that phone call to say, listen, you know, life's changed.
We need to do the X, Y, Z. And that's what, you know, the unfortunate part of my day is, you know, when I have that phone call, it's like, okay, listen, I have to reset expectations. You know, if we do sell your, your, your life's work, it's not going to be worth the value you think it is. You know, sometimes there's the misnomer out there.
It's, you know, I do a million dollars in sales. You owe me a million dollars for my crack. And to your point, you know what, that's what we do with the valuation is we go through tax returns, we go through W2s, payrolls production reports, you know, all these litany of reports to help us come at an adjusted EBITDA, earnings before interest, tax depreciation, amortization.
So I don't work for the IRS. I don't, I'm not a CPA. You know, what's your CPA helps structure for your tax returns is one thing. You know, what we help provide is what that true adjusted income or profitability of your practice is, you know, so we go through our bags. So there are, you know, we'll start soft and hard and backs, you know, do you, do you offer health insurance?
Do you do this? Do you do that? So that's where we come up with our adjusted EBITDA and that helps us let us know what your practice is worth.
Stephanie Goss: Let's take a quick break and then I want to jump in here with your, like, tips for, how do we plan to keep private practice ownership feasible?
What are those things that you need to do? to keep that private practice ownership feasible for the next generation who you're hopefully going to attract to your practice, whether that's as an associate, you know, who works for you for years and buys in or someone who walks in the door and says, Hey, I would love to buy your practice tomorrow. No matter how that looks, that we're doing the things that we need to do in laying that groundwork to keep private practice ownership feasible.
Does that sound good?
Bret Halishak: sounds great to me
Stephanie Goss: You know, Andy and I have both been doing this a long time, and I think the collective years in vet med across our entire team is like a billion. It feels like most days. And one of the number one things that all of us, especially in an, I get asked when we go to conferences. When we talk to our colleagues, when we talk to peers, how do I teach my team how to handle conflict?
How do I teach them to talk to each other? How do I teach them to manage the TIFs, the beefs, the front versus back, all of that. And, we have been working so, so hard as a team for a new certificate set up for y'all and I am so excited to say it is. Almost here. I can't entirely spill the beans, but I can tell you that the uncharted team has put together an awesome certificate on the foundations of how we handle conflict.
And I don't mean how you, as the manager solve everyone's problems or you as the practice owner. I mediate the conflict in the practice. I mean, how do you as a person learn how to approach other people, learn how to talk through conflict and learn how to lean into healthy conflict in the practice. I have been waiting years for us to be able to do this certificate. And it's almost here. I can't tell you more, but head over to the website unchartedvet.com forward/conflict. Our team has put a mail list, sign up. Sign up for that mail less because you will be the first to get all of the details.
As soon as the certificate is ready to drop. And it is. Almost here. And now. Back to the podcast.
Let's talk about those action steps that we need to think about. Whether you're a manager, whether you're an owner. And if you're one of those, if you're a medical director and you're thinking about like growing your size, this still is, a lot of these tips are still relevant.
You may not order a valuation the same way that a private practice would, but knowing the numbers and, and, you know, let's, we, we talked to a little bit about that and starting with the valuation. So top line steps, if you are in your mid forties, you're this practice owner, you want to stay independent.
You want to keep the independent model alive. How do I make private practice ownership attractive? Step number one is we, we talked about in Headspace is knowing what your needs and knowing what your wants are because, and being crystal clear on that, right? From a very early point in time. And then we also talked about what are some of the things that we need to do to keep it attractive?
One of those is we've got to understand what our opportunities for improved efficiencies and effectiveness in our practice is. It's not just getting to the place where the schedule is booked out and we can't get clients in. So we just add another doctor. That's what a lot of practices do. They're like, hey, my top line growth is really heavy.
I can't get clients in. I'm going to add another doctor or I'm going to add more staff. And a lot of practices don't do that homework to look at the efficiencies, the effectiveness, cost of goods, other costs that you can control to see is that top line revenue growth trickling down to the bottom line.
So we talked about that. We also talked about You know, this idea that valuation and look and what that is, is and what that is looking at the formal value of your practice to your point. And I think that this is so, so important. I can't tell you how many practice owners I've met and worked with over the years who have the idea and I can understand why it's how I thought it worked when I started as a manager where whatever my top line revenue growth is, if I gross a million dollars a year or two million a year as a single practitioner, that's what my practice is worth. Some multiplier of that. It's gonna, I'm gonna get two million dollars plus for my practice when I sell it someday. And I think that there are a lot of practice leaders out there who don't understand what we just talked about in terms of the adjusted EBITDA, the, that bottom line number, where it comes from, how it's made up, all of those things.
So homework, they need their wants and their needs. They need to understand what their practice is. actually worth, they have to look at those efficiencies. And so they've got, they're at this point, they're probably working with someone, whether it's a CPI, a broker, to get that bottom line dollar.
Once we've done that work, what do you think from your perspective as a broker are the top things, like the top two or three things that a practice owner could do? To make their practice look most attractive, to keep it as a private practice.
Bret Halishak: Absolutely. You know, it all depends, you know, if they have an existing associate there or if they have someone that's in the wings at school that's waiting to graduate. But you want to make sure that you're operationally set up for growth. And I know that sounds maybe just, you know, like jibber jabber or just, you know, just something off the tongue,
Stephanie Goss: Yeah, I was gonna say, tell, tell us, unpack that a little, tell us what you mean by that.
Bret Halishak: Yeah, absolutely. I mean, I can't tell you how many doctors I still talk to that don't maximize technicians in the exam room. It's one of those where. You know, it's one of the first questions I, I, yeah, exactly is when I ask, I say, Hey, you know, how do you, how do you operate an appointment? What's your head to tail?
And if they don't say, well, my technician goes in there or my assistant goes in there and grabs the history, I kind of stopped them there. I said, well, walk me through the workflow. Why are you not maximizing your staff members to help you? No offense. You are the highest producer in here. You are the person that is their time is invaluable.
You need to be your heads everywhere. You need to be focused on the client patient in front of you. But what are you doing with those staff members to help free you up to do something else? You know, there's some great studies
Stephanie Goss: Yeah so taking yourself in, making sure, so step number one, and I love that you started here, that you have to be the doctor. Get yourself out of the technician nursing role. Stop doing the things that other people on your team should be able to do. And if you don't have people on your team who can do them, and that's why you're doing them, because sometimes solo practitioners find themselves in that position because they haven't been able to train their team, they haven't been able to find licensed techs, whatever the reason is.
Step number one, start with getting yourself out of the nursing seat and into the doctoring seat. And invest in the training and leveraging your support staff to the top of their abilities and licensure.
Bret Halishak: Absolutely. And that's why you pay them everything you do. I mean, payroll is, you know, is the top expense in the clinic. So you want to maximize that. And I'm not ashamed to say my personal veterinarian, he's been paperless now for geez, more than 10 years. And it's one of those where I see his staff more than I see him or his associates.
Whenever I'm there to go see him, I would love to sit there and talk to him, chat his ear off and everything like that. Trust me, you know, we've been friends for a long time. But it's one of those where I spend more time with his team members than him or his other associates, which is fine with me because I know I'm still getting the standard of care.
I'm getting all the items that are recommended, but at the end of the day, his staff members are able to get his history, his objective. He's literally going out doing his act is the rest of his soap and he's hopping to the next appointment. So it's one of those where whether you're staggering your appointments.
You're hopping room to room, however your appointment schedule is set up. You need to realize that your time is the most important time in the, yes, you're not neglecting the staff, but you can't be everywhere at the same time. You should be hopping in and out of exam rooms, taking care of those patients, coming up with your assessment and your plan and moving on.
So, and that's where, you know, back to the whole, you know, crux of the conversation is. If that's not set up day one, your associates can be flustered. They're like, well, what, what, what goes over here? What goes over there? What goes here? And it's one of those like, oh, don't worry about it. We'll just roll with it.
We'll get, we'll talk at lunch. And then next thing you know the emergency patient comes in. So lunch is now that lunch conversations now scrap. Oh, don't worry about it. We'll catch up after hours or, you know, coming to work early tomorrow as a new associate, you know, coming into a practice, you know, just coming into work early to catch up, sound great?
It might be okay the first couple of times, but then the next time, okay, what are we doing here? Are we are we do is this how everyday operates? So it's one of those where if the infrastructure doesn't support the growth It's good The house of cards is gonna fall quickly and then at least a frustrated staff members frustrated associate and eventually the owner has to you know face, you know face the facts say listen we need to take a step back.
We need to make sure we're operationally set up for this. I don't think we're ready to see appointments both the same time. You know, we need to restructure this to, you know, make sure we're all on the same page, make sure everyone knows where the left and the right are doing so that we can make sure that this looks great to us and also to our clients as well.
Stephanie Goss: I love that. And I think like I, I meant it like a breach, you know, the best thing we can do is support and leverage the paraprofessional staff as an independent practice that being able to leverage the team, invest in them. support them in their training and skills acquisition that in and of itself builds tremendous culture.
And I think for me as the manager and I don't know if you have anything else besides what we've already talked about, but for me, the last thing in terms of making yourself attractive as an independent practice is the brand cannot be your face, like as a, especially as a solo practitioner, if the brand to this point has been you, Dr. Smith, and everybody knows you and everybody loves you and you can't get out of the exam room because to your point, like you are in there chatting with all of your clients, that is going to be the, it doesn't matter how profitable you are. That is going to be the single biggest barrier to independent sale and corporate sale.
To be honest, because that is a complete turnaround as a manager. I have to walk into that practice and that certainly as someone, a prospective buyer, I have to walk into that practice and look at this not as a, I can walk in day one and start working, but as a. This is a two to five year turnaround because I have to build the trust bank with the clients.
I have to build the trust bank with the staff. I have to do all of those things that I would have to do in a sale anyway. And I have to completely rebrand the practice in that image that I want as a new owner, because most new, it's like paper records, right? New younger doctors, they don't want to necessarily be, you know, The solo owner, they have a vision for where they want to go in the future.
And it usually involves a leverage team that clients can talk to just as easily as they can talk to easier than they can talk to you. To your point, that vision of your own, your own family veterinarian that you experienced, Bret, like, that's what independent owners want. And so if the, if you are the brand, I think that's the last thing that I would say is that you've got to work, look very critically at that and start undoing that and you can do it gently.
I'm not saying like radical, like stop seeing clients, stop returning phone calls, none of those things, but it goes back to your point, investing in the team and getting them the skillset from the front desk to the kennels and everywhere in between, to getting them the skill sets so that they can serve the clients as much, if not more than you are serving the clients.
That is often the biggest hurdle and the one that takes the most time because you can't go from being the doctor that has done all of the things for 10 years to being the doctor who now suddenly leverages their team overnight. That is a long, that is the long game and that if you do find yourself in those circumstances where you have to suddenly make a change in your long term plan and sell the practice tomorrow, that's where so many people find themselves at your doorstep going, what do I do?
Bret Halishak: Yeah, right.
Stephanie Goss: And they're just, and they're devastated because they know that they are not going to get that maximal return on investment when they, that is a two to five year turnaround project for whoever walks in the door behind them.
Bret Halishak: Yeah. I mean, people used to make fun of me all the time and they still make fun of me. But anyways, I always have this motto of one team, one dream. Like we're all in this together. It's not just me. It's not just you. It's we're all in this together. And to your point, I'm a huge advocate of development and I know some people are not complacent.
They're okay with where they're at. They don't want to be, they don't want to have benchmarks. They don't want to have here or there. But to your point, You know, whether it's Karen Felstead or, or Denise Tumlin or somebody else, I love, I mean, even Andy I, after he's done speaking, I usually be line up there and say, Hey, listen, you had two or three nuggets that I want to talk to you about.
He's like, Bret, we're in the middle of a workshop. I was like, okay, okay. I'll talk to you later about it. And I mean, I want to talk to you later, but it's one of those where if you're only developing in it for yourself and your top line revenue, it's going to show in your staff. You need to believe in your staff and you need to empower them.
I know that's, you know, some things that, you know, you write on a chalkboard or a dry erase board, you know, you know, and it just stays there. But you really need to practice what you preach because there's, there's something that I love whenever you can tell a lot about a practice from their website, you know, for better or worse, you know what, and I'm not even talking about Yelp reviews and Google reviews.
This is outside of that. Some of the best things that I can see when I look at a practice is if I go there and I see the office manager has worked there for 20 years, but not in the same role. He or she or they started as a boarding person or kennel person, and then they went to a technician school and then they did this and then they did that speaks volumes to me or, and this is applicable to anybody.
And that's where the message needs to get out there is, you know, again, I work in the Great Lakes, you know, Minnesota, Wisconsin. Some of these areas are very rural. It's not easy to find people, but again, going back to what I just said about an office manager, there's nothing better to see when there's an associate doctor that said, yes, I worked here as an assistant when I was in high school and I knew I wanted to be.
Stephanie Goss: Yes.
Bret Halishak: And then that clinic or that staff supported him or her or they throughout the whole process of going to undergrad and postgraduate. And then you know what? Maybe they want to move back home. Maybe they don't, maybe they go somewhere for a little bit and then they come back, whatever the scenario or situation is, it works itself out.
But again, like to read that on a website, like how do you not as a client? Say, wow, I don't want to go here. Like someone that spent their whole life working at this clinic that doesn't even own the clinic wants to be a part of this. Like that speaks volumes for somebody. And you can't, you can't teach that.
You can't buy that. You can't go to a lecture and say, you know what? I'm going to, I'm going to do that in my clinic. It happens because you reinvest yourself in the staff and you empower them and you develop them. So
Stephanie Goss: Oh, man. I love that so much and it speaks to it speaks to my, honestly, to, to my own story and I'll I'll leave us there because it's so funny that we, unintentionally got here because I've had this letter sitting in the mailbag for so long from someone who said, you know, I I'm just a you know, I'm just a team member, but I would love to become a practice manager someday.
And like how, you know, what kind of education should I do for myself? And they were like, how did Stephanie get to where she is? And I'm the example of that. I didn't come from the, I was not one of those people who said, I want to work in a vet practice one day. I, my background, my degrees are in theater and music.
I was a teacher and I fell into the vet fields and I was really lucky to be in a practice who had practice owners that invested in me. And I went from that front desk person and it was like getting the education they put me through tech school. I was one, I went through one of the first aha. At the time it was the aha program with Cedar Cedar Valley in Texas.
I went through one of the first online tech programs. I became a technician. I learned about that aspect of the hospital. I earned about, I learned about animal care and then it was like, okay, well, I don't know anything about finances or business or any of the stuff that I can pull out of thin air now, 20 years I didn't know any of that when I started.
It started with a desire for me to learn because I loved what we were doing and I fell in love with the profession and practice owners who supported my development and said, yes, we want the hometown kids working in our practice. We want our clients to see the neighbors, the kids that their kids went to school with.
We want that feel, and we're going to invest heavily in that. And they, you know, that was that practice's growth story. It was my own growth story. And so, I love. I love that you ended us there because that is, I think, such a wise piece of advice for this practice owner and any practice owner is like, invest in your team, get yourself out of the exam room, teach the team to be the face just as much as you are, but more.
And I love your point about the website, get them out there, get rid of the stock photos, get your team on the website, give your clients and prospective buyers a sense of what would it be like to walk in the door. to this practice today. I want to know what that's gonna, I want to know what that's going to feel like.
Thank you so much, Bret. This was so fun. If you, I hope that our writer got something out of it and you know, the recap of our, our, we covered, I think the top tips so, so well. And those will be in our, in the show notes in bullet point format for my note takers. And if you are like, I am, I would love to potentially be a practice owner, I'm on my way to practice ownership.
If you are a practice owner whether you're in the beginnings of ownership and have no idea what you're doing, or have the drive to go from the one doctor practice to the ten doctor practice, whether you're thinking about your exit strategy, especially if you're thinking about your exit strategy, You can come join Bret's workshop when we are in Atlanta in December the 5th through the 7th and get some help and hands on experience with our Uncharted community.
But regardless of how you approach it, I think you've given us some wonderful tips, Bret, for where to kind of get started. And get started early. Early, early, early, early, like as soon as the thought occurs to you, start planning.
Bret Halishak: Exactly. Well, thanks again for having me, Stephanie. It was a blast.
Stephanie Goss: Thank you so much for joining me. Take care everybody and we'll see you next time.
Thanks so much for listening to this week's episode. We really enjoyed it and we hope you did as well. I just wanted to take a quick second and say, if Stephanie Goss: Thanks so much for listening to this week's episode. We really enjoyed it and we hope you did as well. I just wanted to take a quick second and say, thank you to Nationwide, Hill's Pet Nutrition and Pet Desk for being our Anchor Club Sponsors for this year's Practice Owner Summit. And I also want to say thank you to the practice owners who are joining us this year in Atlanta, December 5th, through 7th. Thanks so much for joining us today. We'll see you next time!
