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Suggest who benefitsBonus Episode: When Private Equity Comes for Your Industry
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Suggest questionThis week, Dr. Randy Spencer talks about the changes that have been roiling the vet business. For one thing, that pandemic puppy boom we all heard about has brought additional stress to veterinary workers who had already had more than their share. For another, there’s been a wave of corporate money and private equity flowing into the industry. That sounds as if it could be a good thing. And in fact, Spencer says he’s been dodging a constant flow of acquisition inquiries for years. But the big money has also engendered considerable turnover and disruption, and in response, Spencer decided to sell 100 percent of his business, 1st Pet Veterinary Centers, to an employee stock ownership plan in 2021. The transition to an ESOP remains something of a work in progress, in part because veterinary people tend to be more focused on pets than they are on profits. “Veterinary medicine,” Spencer says, “is just the best profession in the world. In a way, it's a service industry, but we get to serve pets. That's why veterinarians get into it.”
About 21 Hats
The proponents of employee stock ownership plans can make them sound like the greatest thing ever. A business owner can take a big chunk of money off the table—or even all of it—while still getting to run the business. And there are some pretty great tax breaks. Oh, and it will also solve income inequality in America. On the other hand, if ESOPs are so smart, why are there so few of them?
Jim Kalb of Triad Components Group in San Diego and Jeff Taylor of Crafts Technology in Chicago have both implemented ESOPs. Jay Goltz of the Goltz Group in Chicago has reached his 60s without a succession plan, and he’s considering his options. In this 21 Hats Conversation, you get to listen in on a street-smart discussion of the pluses and minuses of ESOPs from the business owner’s point of view.