Updated: May 11, 2021
How far in advance should you be thinking about preparing your practice for sale?
Like planting a tree, it's never too early to sow the seeds for your exit.
How much planning time is relevant to the exit strategy you have. Experts suggest a minimum of 18 months will set you up properly. But what if current events have you thinking you don't want to continue - what do you do?
Clinic and hospital valuations evaluate the worth of both the organization's tangible and intangible properties. Tangible assets include medical veterinary supplies, office furniture, and inventory and supplies.
Multi-doctor veterinary practices may sell at a higher multiple compared to a clinic with one practitioner. Rural clinics or hospitals might also sell for a higher price depending on the market.
Area of specialization has an impact as well. In general, small animal veterinary clinics are more marketable than large animal practices resulting in higher valuations for small animal veterinary practices.
Furniture, Fixtures and other assets: A clinic with substantial investments in furniture, appliances, and equipment is likely to demand a higher valuation, assuming the technology is kept up to date. Their valuations are therefore typically above the industry average.
Goodwill and branding are intangible commodities. Goodwill is created by the practice's income and other factors that decide if the practice maintains the current clients in the future and attract new ones.
Besides assessing whether cash flow is appropriate or not, the valuation also helps buyers and sellers to consider the financial and organizational strengths and limitations of the veterinary practice. This insight into the business also makes the valuation a valuable tool for strategic planning, as it helps both parties to define and focus on areas that need improvement in your practice.
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