So what do you do when you are finally ready to sell your vet practice? You have to value a practice by factoring in every transaction detail, including the salaries, human staff, technologies available, and property value, among many others. Most times, people will become too fed up with the idea of adding all the numbers and finally pull the pin on it and settle on a random figure that likens other similar practices. Consider the following when deciding how to value a veterinary practice appraisal.
Things to consider when you want to sell the vet practice
Think about your goals
What do you want to achieve when you sell the business? The first motivation to sell a business is free of its many tasks and demands, but that is never enough reason. Maybe you want to get a particular earning to start a more extensive practice or get into another investment field. We recommend looking into all your reasons to know what kind of value to place on the practice.
Reasons you must place a value on the veterinary practice sale
- Learning the business lets, you know what you can do to improve its value before selling.
- The value of the practice will help you know whether you are earning a profit and if it is better to put it on sale simply.
- The real value of the business will determine the interest rate if you choose to partner with a corporate vet practice.
- The buyer or bank will need to know the value so you can qualify for the selling option, and you can both agree on the actual worth of the business.
How to evaluate a business
There are a couple of primary approaches for you to place a value on the vet business.
Evaluate the income
Checking the income value is the first step of putting value onto the business. You want to know the total earnings and focus on the profits and loss to understand the actual profits. Remember that this approach does not include tangible or intangible assets but strictly the cash flow.
Study the market
What is the value of the vet practice in its current market? Checking the market value is difficult because you have to determine the total value of all expenses and factor in the geographical location.
Determine the value of the veterinary practice acquisition assets
What is the total value of assets in practice? Calculating the value of assets is likely the most straightforward option because you can easily add up the values and arrive at a conclusion without analyzing all other contributing factors like the location. Some assets to consider include:
- The tools
- Office supplies
A professional can help you determine the value of intangible assets, including the net income and the value of the practice’s reputation. They will determine the likelihood of clients walking into the space and include notable influences like special services and office locations.
How to sell your practice? The vet practice is a technical and complex business with a highly detailed valuation process. Feel free to contact us to schedule an exact valuation process and get more information on how we will help the transaction process or exit strategy.