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The Value Acceleration Model, utilized by a Certified Exit Planning Advisor (CEPA), highlights the three legs of succession: business, personal, and personal finance. Developing each leg in a balanced manner is essential to achieve stability after your exit, much like a three-legged stool that cannot stand if one leg is uneven or missing.

Building the Business Leg:

The business leg of a balanced and successful succession requires an honest assessment of the overall health and stability of your business. It starts with evaluating four key intangible capitals: human, client, structural, and social capital. Let’s delve deeper into each capital:

1.    Human Capital: This encompasses the talent, experience, resilience, and motivation of your team, who are held accountable to your hospital’s standards.

2.    Client Capital: Assess the strength of your relationships with clients and the degree to which those relationships are sticky and recurring.

3.    Structural Capital: Strong structural capital includes your processes, financials, strategies, and, most importantly, documented “secret sauce” know-how.

4.    Social Capital: This refers to your company’s culture and how effectively your team communicates and collaborates to support the other intangible capitals of your hospital.

Building the Personal Leg:

A solid plan ensures that you’ve taken the time to map out the next phase of your life, considering that a significant portion of your time and identity as a hospital owner is intertwined with your business. Three key areas contribute to building a strong personal leg:

1.    Written Succession Plan with Detail: Upon exiting your business, you’ll likely have more time than ever before. Outline how you want to spend this time, derive personal value, and ensure alignment with your family for a fulfilling succession.

2.    Detailed Transition Process: If you’ve played a key role in your hospital, a lack of presence necessitates a thoughtful process and timeline to transition responsibilities. Create a plan outlining your hospital duties, the individuals responsible for each role, and a detailed preparation plan for the next person. This supports a smooth transition and minimizes unexpected calls to you.

3.    It Takes a Village: Transitioning your veterinary hospital requires a team effort. Selecting a quarterback to support you in constructing the best team based on your situation is the right starting point. Most people find a benefit in working with an exit planner who will include a CPA, wealth advisor, transaction advisory team, insurance advisor, legal team, and, depending on the exit plan, additional resources as needed.

Building the Personal Financial Leg:

The final leg of a well-built succession stool is the personal finance leg, which involves working with a financial or wealth advisor. This resource helps you assess your post-ownership income needs to achieve your succession goals. By comparing the value you require from your business against the after-tax net proceeds, you can ensure that your succession goals are within reach and avoid returning to work or compromising your vision for the future.

Balancing these three legs—business, personal, and personal finance—is crucial when planning your exit strategy. By taking a comprehensive approach and seeking guidance from professionals, you can navigate this important transition successfully and secure a prosperous future beyond your veterinary hospital.

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