Pulse - March 2021 - 21

TOOLS FOR SUCCESS

Exit Planning Considerations for
Veterinarian Practice Owners
Andrew Barrier

What is exit planning?
Exit planning is the process of gaining freedom from your
practice. Whether your intention is to transfer your practice
to your children, sell It to key employees, sell to a competitor, or just wind it down, having a plan in advance improves
your opportunity for success. When the practice owner fails
to plan, even the most successful practices can become a liability to the owner or to his or her heirs.

What are the benefits of having an exit plan?
A well designed plan can help the owner to achieve a variety of goals depending on his or her specific situation and
objectives. For example, an exit plan may allow the practice
owner to:
*	 Monetize value that is locked inside the practice
*	 Gain personal freedom from the day-to-day obligations of
running the practice
*	 Share the responsibility and rewards of ownership with key
employees or family members
*	 Reduce gift, estate and income taxes related to any transfer
of ownership
*	 Maintain family harmony
*	 Preserve a legacy via practice continuity

The Exit Planning Process
Practice owners need to ask themselves: " After all of the
effort I've put into building my practice, what will I ultimately be looking to get out of it? " Once this question is
answered, factors like retirement age, family considerations
and specific financial goals begin to take shape.

PULSE

MARCH 2021

There are many tools to help individuals get into practice,
but few to help them get out. The exit planning process is a
customized, comprehensive approach to designing a practice
owner's successful exit from the practice and incorporating
unique personal objectives into realizing his/her desired outcome. Without an exit plan or strategy, the likelihood of maximizing financial return, minimizing tax liability, preparing for
contingencies and realizing a successful transition from the
practice are greatly diminished. To mitigate the risk of a negative outcome, owners should allocate more of their time in
developing a comprehensive exit plan that takes into account
retirement goals and objectives.
To begin the exit process, owners should comtemplate
these key issues:
*	 Business practice valuations
*	 Buy/Sell agreements
*	 Preparing successors
*	 Identify retirement income needs/goals
*	 Golden handcuffs for key employees
*	 Initiating stock programs to key employees
*	 Implementing practice growth strategies and cutting
expenses
*	 Delegating owner responsibilities to management and
employees
*	 Preparing audited financials for the practice for prior years
*	 Getting pre-qualified for financing
*	 Writing a comprehensive summary of the practice
*	 Consulting advisors on how to structure the deal and
potential tax exposure
*	 Structuring buyouts from successor or partners
*	 Identifying the potential universe of buyers

When is the right time to begin planning?
Practice owners are busy running day-to-day operations and
for many, their identity is so closely tied to their practice that
it's difficult to imagine leaving. For those reasons, many haven't
prepared for, or even contemplated, their exit. But not planning
for their inevitable exit may come with many risks. To preserve
your options and equity, remember that time is of the essence.
Don't wait until you're ready to leave to start exit planning. No
matter how long you've been running your practice, owners
should start the process earlier to map out their exit.
Engaging in the exit planning process early on, potentially
5 to 10 years before you are ready to exit, can help you to see
your options, identify and resolve problems, get your practice
in order and ultimately maximize its value. P
To learn more, contact Andrew Barrier at Tax & Financial Group (TFG).
Via phone: 949.223-8431 or via email: Andrew.barrier.tfgroup.com.
Tax & Financial Group - 4001 MacArthur Blvd., 3rd Floor - Newport
Beach, CA 92660.

21


http://Andrew.barrier.tfgroup.com

Pulse - March 2021

Table of Contents for the Digital Edition of Pulse - March 2021

Pulse - March 2021
Chapter Meetings & Calendar
President’s Perspective
SCVMA Profile
SCVMA Profile
Pulsepoints
Practical Pathology
Veterinarians Key to Planet’s Future, UC Davis Global Health Expert Believes
Medical Leeway
UC Davis Update
Tools for Success
Angel Fund
Dear Tabby
The RVT
Industry Insights
Quick Reference
AVMA Diplomates
Digital Photography for Veterinarians
Resources
Disease Table
Classifieds
From the SCVMA Office
Pulse - March 2021 - Pulse - March 2021
Pulse - March 2021 - Cover2
Pulse - March 2021 - 1
Pulse - March 2021 - 2
Pulse - March 2021 - Chapter Meetings & Calendar
Pulse - March 2021 - President’s Perspective
Pulse - March 2021 - SCVMA Profile
Pulse - March 2021 - SCVMA Profile
Pulse - March 2021 - Pulsepoints
Pulse - March 2021 - 8
Pulse - March 2021 - 9
Pulse - March 2021 - 10
Pulse - March 2021 - Practical Pathology
Pulse - March 2021 - Veterinarians Key to Planet’s Future, UC Davis Global Health Expert Believes
Pulse - March 2021 - 13
Pulse - March 2021 - 14
Pulse - March 2021 - 15
Pulse - March 2021 - 16
Pulse - March 2021 - 17
Pulse - March 2021 - 18
Pulse - March 2021 - Medical Leeway
Pulse - March 2021 - UC Davis Update
Pulse - March 2021 - Tools for Success
Pulse - March 2021 - Angel Fund
Pulse - March 2021 - Dear Tabby
Pulse - March 2021 - 24
Pulse - March 2021 - The RVT
Pulse - March 2021 - Industry Insights
Pulse - March 2021 - Quick Reference
Pulse - March 2021 - AVMA Diplomates
Pulse - March 2021 - Digital Photography for Veterinarians
Pulse - March 2021 - Resources
Pulse - March 2021 - 31
Pulse - March 2021 - 32
Pulse - March 2021 - Disease Table
Pulse - March 2021 - 34
Pulse - March 2021 - 35
Pulse - March 2021 - 36
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Pulse - March 2021 - Classifieds
Pulse - March 2021 - From the SCVMA Office
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Pulse - March 2021 - Cover4
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