Of course, relinquishing the reins to the business isn’t something to take lightly. It’s one of the biggest decisions you’ll make in your veterinary practice brokers professional life and plotting out a good exit plan ensures you’ll be in the best possible position when the time comes to finalize the deal.
Thinking about selling? Buckle up. In this blog post, we’ll take a high-level look at (almost) everything you need to consider when selling your veterinary practice, including your reasons for selling, financial goals, staff retention, and more.
- Think about why you want to sell your veterinary practice
Reasons for selling
The first step in selling your veterinary practice is identifying why you actually want to sell. What are your goals? Are you ready for a significant change? Why now?
This is a very personal decision and there are no right or wrong answers. Generally speaking, there are three main reasons why practice owners decide to sell:
Retirement: You’ve worked hard and enjoyed a successful career. Selling your practice is the perfect opportunity to reap the fruits of your labor and set yourself up for a bright financial future.
Career change: You’ve experienced the ups and downs of the industry and have decided it’s time for a career change. Many veterinarians transition into adjacent industries such as academia, research, animal welfare, and biosecurity, while others may use their business skills to launch a new entrepreneurial venture.
Personal reasons: A change in personal circumstances might motivate you to sell. This includes things like poor health, relocation, divorce, financial hardship, and death.
- Talk to finance and legal sooner rather than later
Finance
Selling a practice ain’t easy. To maximize your chances of a smooth sale, start the discussion with your lawyer, financial planner, and other specialists as early in the process as possible – months or even years before the final transaction takes place.
Your advisory team can guide you through the sale process, provide insight to help you make more informed decisions, negotiate deals, and ensure offers are in line with your best interests. Starting these conversations sooner rather than later means more time to prepare and more time to mitigate potential liabilities and tax consequences.
- Get your practice appraised
Practice appraisal
You can’t put a price tag on your practice if you don’t know what it’s worth. Undervalue the business and you risk low-balling yourself. Overvalue the business and there’s a chance you’ll intimidate potential buyers.
That’s where a valuation comes in. A valuation is a crucial business planning tool that tells you how much your practice is worth and should ideally be conducted every few years. It can help you get a better picture of your current financial situation, which you can use as a starting point to get to where you want to be further down the track.
While there are a few different valuation methods, the income approach is the most common way of appraising a veterinary practice. This method primarily looks at a practice’s ability to generate profit and largely ignores the value of individual assets. To accurately value your practice – and ensure you get a fair price! – you’ll need to enlist the services of a business appraiser, preferably one with experience in appraising veterinary practices.
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