Let’s face it! Deciding to sell your veterinary practice can be challenging. It involves a lot of emotions and many owners feel confused and overwhelmed when the time comes. This transition is hard and many factors can make it even more difficult. Still, every practice owner has a valid reason to sell whether they are retiring, redirecting their career, or just feel a professional burnout.
Before selling your veterinary practice it’s important to make a proper plan. Setting clear goals and knowing what your desired outcome actually is are essential. This decision is one of the most crucial life decisions you will ever make and weighing all the factors is necessary. Why do you want to sell your practice? Is it the best time? How can you ensure to get the best value for your business? This article will answer these questions and give you some excellent tips. It will help you make a good plan and get the best price possible. Without further ado, let’s begin!
Hire A Valuation Service
It’s not always easy to estimate your practice’s value on the market and sometimes hiring a professional is the best thing you can do. Experts can help you figure out your future goals and guide you through the sale. Financial consultants at www.vetvalue.pet will assist you to find a way to increase your value efficiently and provide more accurate facts about the current market. Make sure you find a company that provides valuation quickly (you don’t need to wait for weeks because this can be done in a few hours). It’s also important that your valuation is easy to understand. After all, you are a veterinarian and you don’t need to be an expert in finances and corporate buyers’ value practices.
Figure Out Your Finances
Many small businesses are trying to minimize their taxable events. However, if you are a veterinarian who is planning to sell their practice in the next few years, you shouldn’t go overboard with your deductions. In fact, if you know you are going to be selling in the next three years you can have many benefits from your taxable income.
Let’s explain this principle a bit. For example, you can add $25,000 to your bottom line and just pay the taxes. But if you manage to sell your practice for a better price (let’s say six times your bottom line), your practice will rise in value by an amazing $150,000.
Find The Right Buyer
Once you know your practice’s value and you have your finances figured out, it’s time to find a potential buyer. Experts advise discretion when you start soliciting buyers. Potential buyers probably won’t make their offer right away. They will most likely approach various veterinarians and do their research. You should also be aware that big private practices and conglomerates often target smaller practices as investments.
Every sale is unique, of course. But here are a few most common scenarios and types of buyers most owners need to negotiate with.
This situation is very common and it’s only logical that many vets want to sell their practices to their associate vets. The associate is already familiar with the practice, office culture, atmosphere, and daily procedures. But most importantly, they likely already have some type of relationship with your clients.
If you feel that this is the best buyer for your practice, make sure you fully understand their motivations and goals before making an offer. You two should be on the same page and you don’t want to make a rushed decision.
Selling your practice to a partner that has already invested in your business is a great idea. The situation can be similar to selling to an associate but there is one big difference – partners don’t have to be veterinarians and maybe they don’t really want large ownership in the practice.
The best way to overcome this is to make a plan with them and confirm you are on the same page. Help them choose a lead vet for the business once you sell it.
Selling to a big investment group is another great option. These financial institutions are always looking for new ways to build their real estate portfolios and vet practices have been very popular over the last few years since they are a valid acquisition option. Make sure you have all your finances, business models, and revenue in order if you decide to sell to private equity.
Vet Corporation Or Merge
It has become very common for vet practices to merge. When a group of individual businesses becomes an extensive network they form a structure that has many benefits. First of all, the costs will likely be reduced since all the resources will be shared among a bigger group. Prices should also become standardized. Another good thing is that your employees will be able to rotate between locations, have a better schedule, and fill in the gaps if necessary.
Many experts consider selling to a vet corporation to be the best solution. It’s especially beneficial if you have a good financial picture and a lot of clients. You will certainly get a good deal and the whole process should run smoothly.
Plan The Sale
Specialists in this field advise you not to sell your practice in a rush. In fact, they suggest you should plan the sale years in advance, especially if you want to retire. There are certain things you need to do to ensure you benefit the most from your sale.
For example, you should always get legal and tax advice. Consult with your attorneys and public accountants you trust. Experts can help you make critical decisions and find the best ways to protect you legally. Not to mention that they will assist you to minimize your tax consequences.
Selling your vet practice is one of the most vital moments of your career and it’s important to do it the right way. The process is complex but the right plan will ensure your success and the best possible outcome. Follow this guide and enjoy all the benefits you deserve.