Dear Veterinary Practice Owner,
If you are an independent veterinary practice owner and, on this page, you got here because you are contemplating a sale of your practice to a non-DVM party, most likely a “consolidator”. Whether you are just getting started, or evaluating an offer you have received, please read the following straight talk on the practice sale process before you do anything else.
The Good News…
Now is a great time to be a veterinarian, even more so if you are a veterinary practice owner. Market sentiment regarding the future of pet healthcare is as bullish as it has ever been.
If you own a high-quality veterinary practice you almost certainly have many attractive options that will allow you to achieve your financial and career goals.
The Bad News…
You have one chance to sell your practice and the stakes are very high. It is very easy to sell your practice for less than it is really worth, and hard to capture all the value you have created.
Those who manage the sale process poorly may get millions of dollars less than they could have, and likely draw less satisfaction from their future work at their practice.
Ignorance is not bliss in this case.
Do your Homework
Before you move forward you need to do your homework.
Once you begin interacting with consolidator buyers, things can move quickly putting you in the unenviable position of needing to hastily make a decision that has huge financial consequences.
Not having the right perspective or information to properly evaluate this decision can lead to a poor outcome. Gathering and reviewing the correct information with which to evaluate an offer will require time and expertise that you likely do not have.
Educating yourself about what buyer’s value, how they are different, and what you should expect post sale, is critical.
Understand the Stakes Involved
Any corporate buyer who evaluates your practice will have probably done dozens of transactions recently.
Unless you have been previously involved in practice transitions, you should be extremely sensitive to any potential blind spots you might have.
Think of a blind spot as something you don’t know, you don’t know.
Your first step should never be to engage directly with a corporate practice buyer. If that was your first step, you should push pause now.
The buyer may protest, but you need to do what’s best for you and they will respect you if you come around next time better prepared.
Remember, your goal is to achieve your financial and career goals by finding and securing the best deal available to you in the market.
Meanwhile, the buyer is trying to maximize the return they can achieve by buying your practice assets for as low a price as is feasible, thus reducing the risk on that return.
Get Multiple Perspectives
There are many experts in veterinary practice sales and far, far more charlatans masquerading as experts.
There are also networks of informal and formal partners (disclosed or not) who refer business to favored parties without regard for what might be best for you. It’s a jungle and the only way to navigate it is to get multiple perspectives.
If you are just starting, you will not be able to spot the expert from the charlatan until you speak to at least one of each.
Also, though you may find an expert, you need to find an expert who you know will focus first and foremost on your success, instead of their own success.
Always follow the money. Brokers and financial advisors get paid to complete the deal, lawyers and accountant get paid by the hour, consulting fee arrangements can vary.
Always filter the advice you are getting through the lens of how the expert will get paid more, or less, and you are less likely to be treated poorly.
If you have read through this and believe you should accept that corporate offer you received that led you to seek a practice valuation then you must believe that the offer represents the best offer available to you in the market.
If you are unsure, begin gathering the multiple perspectives you will need to be sure. Start by consulting the principals at VetValue.
Why get a Practice Valuation?
Practice valuation is built over years or decades. Even if you don't plan on selling your practice this year, VetValue's practice valuation can help you meet your future goals. Register today to see what VetValue can do for you — you won't be disappointed.