Rural woes don't reflect overall practice sales market, brokers say
NATIONAL REPORT — Kanab, Utah, just got its second stoplight. And most people living in the community leave their doors unlocked.
Scenic and idyllic, the community is nestled in the shadow of Zion National Park making it a regular tourist stop during peak season.
And it is still not helping 42-year-old veterinarian Kathy Backus sell her mixed-animal veterinary practice. She bought the 23-year-old practice a decade ago and listed it two years ago, planning for a move to Salt Lake City to be with her new husband, whom she will marry later this year. She hasn't aggressively been trying to sell the practice but is ramping up her efforts now after having only one nibble and with time running out."I could close it down, literally, and board it up, or rent it out as a non-veterinary practice," Backus says. "The only thing keeping me from doing that is it feels bad to leave these people without access to veterinarians. I'm not totally ready to do that. I feel I need to make a much bigger effort."
But all effort aside, the quiet town Backus loves might be the very thing keeping potential buyers away. She made $75,000 last year and works alone, seeing an average of 12 patients a day during the four 10-hour days she is open. But the nearest veterinarian is about two hours away, and while she doesn't take emergencies, and 95 percent of her patients are companion animals, there aren't many buyers in this market.
"Are you where buyers want to go?"
That's the first question David McCormick, MS, of Simmons & Associates, a national veterinary practice sales firm, asks sellers.
"If you're a small-animal practitioner near an urban or suburban area, your practice will sell in a year or two," he says. "The farther away you get from there, the longer it will take."
"I'm selling everything I have listed," adds McCormick, who represents the mid-Atlantic region. "I have more than 450 people waiting to buy a practice."
Buyers are very particular about what they want, he says. The ones who are willing to go anywhere want a practice that will gross $1 million. Others don't want to relocate and may be restricted by non-compete agreements.
More programs are being initiated to help draw new veterinarians to reported shortage areas, like rural communities, but those programs target veterinary students and many lenders won't take a chance on a new graduate.
"Many lenders feel they don't have enough experience to buy a practice. Most want them out working three to five years," he says. "Any good consultant or adviser is really going to challenge them and say, 'Are you really ready?'"
Readiness was the problem keeping Backus' one nibble from buying her practice. He was fresh out of veterinary school with two young children and wanted a mentor. She's willing to stay on for a few months, but not the amount of time many new graduates would like to learn the ropes of practice ownership, Backus says.
And without veterinarians who are willing to work in "no-man's land," Backus says she is worried about the future of rural veterinary medicine.