SETTING up your own practice is
an exciting career move for any new
or established veterinary
professional. There will be a myriad
of decisions that will need to be
made. The first and most obvious
question is: “Where do I start?”
Before deciding to establish your
own practice, make sure you
understand the variety of activities that
are involved, the most critical steps in
the process,the timetable
and the costs.
It will take
thought,planning,
management
skills and
appropriate
professional
advice. We have put together a
Beginners Guide to help you consider the
main stages in the process.
First, you will need to decide if you
are going alone or with a colleague
and, if the latter, in what type of
entity. This month, we will look at unincorporated business structures.
A single-handed ownership where you are the only vet in a new
environment can be a daunting
position. Therefore, many vets (who
are not buying an already established
practice) opt to start from scratch with
a colleague.
There are various forms of joint
venture and it is important to choose
at an early stage which is the most suitable arrangement for the parties’
needs. Probably little used but certainly
worth consideration are expenses
sharing arrangements. The more
traditional arrangement is within a
partnership.
Generally, expense sharing
arrangements can be distinguished
from partnerships by the degree of
integration between the practitioners.
It is important that vets understand
the differences between expense sharing and partnerships to ensure
their business is protected and that
there are no nasty surprises at a future
date.
The expense sharing arrangement
is sometimes used where vets operate
separate practices but in close proximity, i.e.
within common
premises. Whilst they
continue to trade as
distinct businesses, the
parties agree to share
common expenses such
as the common areas,
staffing costs, utilities or
marketing costs.
On the other hand,
a partnership is an
integrated joint venture
and the veterinary
business is the business
of the partnership
rather than of the
individual parties. A
partnership business is a much closer
relationship than that envisaged by an
expense sharing arrangement.
Whilst many vets in partnership set
out with the express intention of being
a partnership, there are a number of
practitioners who believe they operate under an expense sharing arrangement
when in fact they are partners. This
can lead to entirely unforeseen and
undesirable consequences.
In conclusion, if you are looking to
operate your new practice under an unincorporated
business structure,
think very carefully
how you wish the
relationship with your
colleague is to be
governed.
Whatever you
choose, having
documentation to
govern that relationship
is crucial and it is
important that your
partnership deed or
expense sharing
agreement actually
reflects the intended
working arrangement.
It is advisable to
obtain specialist legal advice at an early stage to talk through which
arrangement suits your needs best and
what documentation you need to
protect your interests.
