As we approach the end of what has turned out to be another strong year for the veterinary industry, many practice owners are considering whether they should be contemplating a transition to a new owner.
Record revenue, high practice valuations, and the increasing challenges of running and managing a practice are factors in a very active period of buying and selling.
4 Factors to Consider When Selling Your Vet Practice
If you are considering a transition, here are some key factors to consider:
1. Is It the Right Time?
When considering a transition, it’s essential to choose a date and “put your stake in the ground.” It can always be adjusted, if necessary, but it’s important to start with the end date in mind. It’s also important to accelerate through the finish line.
The most recent financial performance and trends in your practice will significantly affect the value you receive at the time of sale. Lastly, consider your overall personal financial portfolio. Will you be able to live the lifestyle you desire after you sell your practice?
2. What is Your Ideal Scenario?
Are you hoping to keep your practice a locally owned business? If so, you need to consider a transition to an associate or a privately owned competitor that is looking to expand their footprint in your community.
If you are looking to maximize the return you receive, you might entertain offers from larger corporate practices that are very active in the market. If you own the real estate that you practice in, are you hoping to retain ownership and just transition the practice?
3. How Much is Your Practice Worth?
Have your practice evaluated by a professional who can do a thorough in-depth review of your situation. You want to negotiate with potential buyers from a position of strength. Having a formal valuation of your practice will give you the confidence to maximize the value you receive. Also, you might find out that a few adjustments will make a big difference in the long run.
A competitive fee schedule can have a significant impact on the value of the practice. It’s also important to benchmark your overhead and ensure your practice is operating as efficiently and effectively as possible in the years leading up to the transition.
4. Are Your Financial Statements in Good Shape?
Finally, make sure your financial statements and records are organized and easy to understand. Work with professionals (i.e., consultants, accountants, attorneys, and bankers) who understand the veterinary industry and know the current market trends. Regardless of the history of your practice, it’s important to control as much of the narrative as possible.
With a solid plan and a few key partners on your side, you can achieve the transition that you desire. Reach out to SVA and let’s chat about how we can help you meet your personal and financial goals.
Sign up for SVA’s 4-part series on Buying and Selling a Vet Practice at SVA.com/VetSeries.
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