| Are you thinking of selling your practice in the next six months, one-year, or even two years? Are you ready to develop short and long-term plans to help find a buyer and maximize your price? I recently had a conversation with Mike Nelson, Founder & President of Nelson & Associates Incorporated, whose firm is dedicated to helping veterinary professionals navigate the sale of their practices. He provided tips to remember when preparing for the sale of your clinic that can manage expectations and set you up for success.
1. Location Evaluation – Per Nelson, veterinarians are the only members of the medical community whose business is driven by location. Let’s start by taking a realistic look at yours. Is your practice in an urban or rural setting? If rural, is the growth coming your way? Where are new streets and developments planned in relation to your clinic? Knowledge of these data points is vital to understanding your potential purchase price.
2. Staffing Assessment – How many doctors are in your practice? Are you in need of additional support? Nelson says that the addition of even one experienced doctor provides $550,000 or more in earnings to your clinic, with approximately $110,000+ in profit in the first year. This profit multiplies by five times at the selling table. If your practice is thinking about expanding, doing so before a sale can reap both short- and long-term financial benefits.
3. Lending Estimation – A huge part of the sale price of your clinic to another independent practitioner is “what the bank says it is worth,” notes Nelson. He says lending institutions value the practice at 80-100% of revenue in urban areas. That percentage drops in rural areas. Know your worth when you walk into negotiations.
Prepare now to reap the benefits at the negotiating table. Set your expectations early and take steps to increase the bottom line of your practice. This will help maximize the dollar value of your life’s work when you are ready to sell.
Would you like to add staffing before a potential clinic sale? We’ve been in the recruiting business for more than 30 years, and since 2020, my team and I have submitted over 840 veterinarians to over 350 privately owned clinics. We understand the special requirements of finding the right doctor for private practices, and my team has consistently put our method to work for our clients, resulting in a 90 percent success rate in presenting quality candidates. Allow me the chance to explain how we go about finding the right match for your practice. I look forward to our conversation. |
