Reliable veterinarians and veterinary support staff are an important part of running a successful veterinary practice. These employees are the backbone of your business, and there is often a strong bond among the team that works together to run a practice. The team learns to do things a certain way and losing any member of that team can throw off team dynamics and productivity.
For this reason, veterinary practice owners are often most concerned about their veterinarians and support staff when they are considering selling their veterinary practice: what will they think? Will they quit? How will the practice be run if they do? Further, many practice owners are aware that the cost to hire and train an employee can be high, and these costs will add up quickly if multiple employees are leaving at the same time.
Tell Your Employees When the Time is Right
One of the first concerns in the mind of a veterinary practice owner looking to sell their practice is when he or she should tell the practice employees that he or she is planning to sell. This is typically done by calling a staff meeting, where the practice owner can explain the sale and answer any questions the veterinarians or staff may have. In the case of alerting the veterinarians, sometimes they must be notified even sooner, as the veterinarians will often have to sign a new employment agreement with the buyer of the practice.
While many buyers will want to get this meeting out of the way as soon as possible, it is important that employees are not told about the sale too early in the process. In most cases, practice owners should not begin notifying their employees until they are sure they are going to sell, as this helps to avoid leaving employees with unanswered questions. Further, by waiting some time before telling their employees about the sale, the practice owner may be able to avoid unnecessarily worrying their employees if one of the parties backs out of the sale before the closing date.
However, it is equally important that the practice owner does not tell the practice employees too late in the process either. Transparency and honesty with employees throughout the selling process often lends itself to a smoother transition after the sale, and it is in both parties’ best interests that employees are afforded the opportunity to ask questions. In the case of the veterinarians, it is also important that they receive adequate time to hire independent counsel and negotiate their potential new contracts with the buyer.
Offer Retention Bonuses
A popular way of ensuring that valuable veterinarians and staff members stay with the practice after the sale is to offer retention bonuses. These retention bonuses can either be paid out at the time of sale and/or scheduled to be paid out some time after, whether it be on the three-month, six-month, or one-year anniversary of the sale. By structuring retention bonuses this way, employees are given an incentive to stay with the practice, and these retention bonuses can also offset any raise or sign-on bonus that employees would receive by leaving the practice and finding employment elsewhere. Additionally, some buyers will agree to match these retention bonuses, thus providing even greater encouragement.
Set Up a Smooth Transition
As mentioned, honesty throughout the selling process often leads to a smoother transition in practice ownership from seller to buyer. Employees tend to feel less anxious about the ownership transition when they have their questions answered and are not afraid of being let go or their job duties changing substantially.
Additionally, practice owners should continue to offer employees the same support that was being offered before and after the sale. When possible, practice owners should continue to work the hours needed to support patient and client needs, help the practice manager develop a good working relationship with the buyer, and keep lines of communication open after the sale. If the buyer will be offering employees completely new benefits from what was being offered before the sale, practice owners should ensure that employees are fully aware of this and are clear on what their new benefits package includes. Practice owners should also work together with buyers to go over all the practice’s existing employee benefit plans, ideally offering as many of these same benefits as possible.
Finally, and in many ways most importantly, practice owners should ensure that their staff feels appreciated both throughout the selling process and after the sale. Practice owners may want to recognize the contributions of various employees at a staff meeting before the sale or may want to plan a group outing to celebrate the team’s success. Even a simple thank you note or gift can go a long way to show employees just how much you value their support throughout the selling process.
By notifying veterinarians and veterinary support staff members of the sale at the right time, offering retention bonuses, working to provide a smooth transition, and showing appreciation toward loyal employees, veterinary practice owners can ensure that their valued team stays in place for a long time, even after the sale of their practice. With its extensive experience in the industry, the National Veterinary Law Group at Mandelbaum Barrett can help negotiate with buyers to provide the best possible outcome following the sale of your veterinary practice.