A follow-up to the successful and sensible Building the Successful Veterinary Practice series, this new volume provides the business know-how needed to make today's emerging practices tomorrow's established practices. Author and consultant Thomas Catanzaro reveals his secret to building a business for the future: a strong succession plan. This book will help readers incorporate a defined leadership structure; address the internal and external legal issues of a practice; and understand the economic factors of owning and selling a practice.

Thomas E. Catanzaro, DVM, MHA, FACHE, and diplomate of the American College of Healthcare Executives, is the first veterinarian to receive board certification from the American College of Healthcare Executives. He has 30 years of experience as a practitioner, a hospital services director for AAHA, and a consultant. Widely published and in demand as a speaker, Catanzaro addresses areas of skill that are not usually included in a veterinarian’s formal education.

Robert W. Deegan, DVM, is the vice president for research and development at the Iowa JARD Corporation in Maquoketa, Iowa, which investigates agricultural options and develops commercial projects. He has worked with Catanzaro & Associates since 1993 to establish a valuation methodology to determine fair market values for veterinary practices.

Edward J. Guiducci, JD, represents veterinarians in business and real estate transactions throughout the United States.

Preface

ix

Introduction

xi

Succession Planning---Forces of Change

3

(40)

Dynamics of Change

3

(2)

Veterinary Medical Applications for the Ten Forces of Change

5

(5)

The Competitive Advantage

10

(1)

Evolution of Succession Needs

11

(4)

What's Your Practice Worth?

15

(4)

Annual ``Program-Based'' Budget

19

(1)

Beyond the $$$

20

(3)

Lease or Buy?

23

(2)

Other Factors

25

(1)

The Urge to Merge

26

(4)

A Dozen Signal Flares

30

(2)

Practice Valuation

32

(7)

Succession Planning

39

(4)

Risks and Demographic Demands

43

(40)

Assessing the Competitive Environment

43

(2)

The Challenge Presented

45

(7)

Bottom Line

52

(1)

Population Shifts

53

(6)

Veterinary Healthcare Shift

59

(2)

People Sense

61

(2)

The Integration Factor of Capitalization Rates

63

(2)

The Appropriate Compensation for Practice Team Members

65

(3)

Let the Doctors Earn What They Are Worth

68

(7)

Cooperative Practice Progression

75

(1)

Hot Buttons

76

(1)

Putting It All Together

76

(2)

Benefit Programs for Staff

78

(2)

Selecting the Right Future

80

(3)

Legal Issues of Veterinary Practice Succession Plans

83

(18)

What is a veterinary practice succession plan?

83

(1)

What are the four legal/economic benefits to creating a veterinary practice succession plan?

84

(3)

When should you create a veterinary practice succession plan?

87

(1)

What are your options in structuring a veterinary succession plan transaction?

88

(13)

Selecting the Appropriate Legal Structure for Succession Planning

101

(18)

Sole Proprietorship or Sole Ownership

103

(3)

Partnership/Limited Partnerships

106

(3)

Corporations

109

(4)

Limited Liability Companies

113

(3)

Limited Liability Partnerships

116

(3)

Contracts for Succession Planning Transactions

119

(20)

Buyers' and Sellers' Objectives in Succession Planning Transactions

119

(1)

Tips on Handling Preliminary Negotiations

120

(1)

Due Diligence in a Veterinary Practice Transaction

120

(2)

Letter of Internet

122

(1)

Contracts in Asset or Stock Transactions

123

(12)

Contracts between the Owners of Veterinary Practices

135

(4)

Solo Group Practice or Practice Affiliation: Is It Right for You?

139

(10)

Group Practice or Practice Affiliation

139

(2)

All Solo Group Practices, or Practice Affiliations, Should Have a Written Agreement

141

(5)

Additional Concerns for Veterinarians Entering into Solo Group Practices

146

(3)

Legal Relationships with Associate Veterinarians

149

(14)

All Associate Agreements Should Be in Writing

149

(3)

The Associate Should Be an Employee

152

(2)

Contract Terms to Protect Your Practice

154

(2)

Covenants Not to Compete

156

(4)

Tips to Conducting Negotiations with Your Associate

160

(1)

Your Remedies Against an Associate Who Violates the Associate Agreement and Covenants

161

(2)

Appendix A Personal and Practice Value Assessment

163

(10)

Appendix B Compensation

173

(8)

Appendix C Employment Agreement

181

(6)

Appendix D Bill of Sale

187

(2)

Appendix E Covenant Not to Compete

189

(4)

Appendix F Promissory Note

193

(4)

Appendix G Veterinary Practice Purchase Agreement

197

(10)

Appendix H Personal and Confidential

207

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Beyond the Successful Veterinary Practice Succession Planning and Other Legal Issues

9780813812090

0813812097

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Table of Contents

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