The ownership crisis in veterinary medicine - Pt 2
Part 2
In Part 1 we discussed the need for ownership models to evolve in veterinary medicine. They must adapt to the modern veterinary professional, her needs and her values. We discussed different ownership models that have been adopted in other industries, and how they make ownership more accessible.
Specifically, we addressed stock option plans, leveraged equity plans, and profit sharing plans, along with some of the pros and cons of each. Now we delve a little bit further into the key considerations of building up an ownership stake in your practice.
There are an infinite number of ways to structure these plans and arrangements. What’s most important is a strong alignment between you and your soon-to-be business partners. Some key topics of discussion should include:
Timing: will ownership be transitioned over time, in chunks, or all at once?
Price: what valuation will be used to transition ownership and how often will it change? (for example, employees at Facebook, if given a fixed annual bonus of $20K of stock options each year, given a stock price that continues to increase, the same $20K would result in a smaller and smaller incremental percentage awarded with each subsequent year).
Decision-making: how will big decisions evolve over time as you own more and more of the practice? How transparent will the current owner be about the inner workings of your practice, its finances? How will you decide on future hires and part-owners?
Investment: Will ownership be made via a purchase of shares, as a grant of options, or simply a gift made over time? What will be required from you, and how can you finance it?
And beyond all of that, it is important to remember that equity ownership goes best with operational ownership. Meaning that a small stake in a practice will do far less to engage you and your fellow employees, if it is not accompanied by a sincere culture of empowerment, autonomy and transparency. The more a member of a team is empowered to think like an owner, the better the decisions they will make on behalf of the entire practice. The more a team identifies with the values and mission of your practice, the more engaged and successful they will be in working together.
If you are thinking about ownership, Vesta would love to help! It is never too early to start thinking and understanding about what the ownership path can look like.
Whether you are looking to buy into the practice you work at, acquire an existing practice, or open a new one, our door (or zoom line!) is always open to help you make that decision. And if you’re just curious about ownership, come join one of our existing practices and we can teach you all about the rewards of an equitable, transparent and inclusive ownership model with a front-row seat!
