The path to practice growth often involves bringing associate DVMs into ownership roles. This transition can strengthen your practice while creating opportunities for both current owners and ambitious associates.
Why Consider Associate Ownership?
Associate ownership serves multiple strategic purposes. It creates powerful incentives for increased production and revenue growth while helping retain your most valuable team members. When high-producing associates see a path to ownership, they’re more likely to invest themselves fully in the practice’s success.
Structuring the Transition
The journey to associate ownership begins with thoughtful conversations about expectations and goals. These discussions should cover succession planning, management participation, and decision-making authority. Clear eligibility requirements provide associates with concrete goals while protecting the practice’s interests.
Exit rights require particularly careful consideration. Your agreements should include controlled and defined parameters for both entry and exit, with clear valuation methodologies and triggering events. Well-structured call and put rights ensure smooth transitions while protecting all parties’ interests.
Creating Long-term Value
Building value through associate ownership involves more than just financial considerations. Consider how new partners will participate in management and strategic planning. Leadership development becomes crucial as associates transition from employees to owners.
The structure should include clear provisions for purchase options, tag-along rights, and drag-along provisions. These elements ensure flexibility for future transitions while maintaining practice stability.
Contact Rupp Pfalzgraf LLC for guidance in structuring associate ownership transitions that benefit both your practice and your future partners.
