As a veterinarian, you’ve likely relied on the knowhow of specialists around you for years. Board-certified surgeons for complex procedures. Skilled radiologists for a more in-depth diagnosis.
When it comes to selling your practice—which is often the most significant financial decision you can make in your career—the same principles should apply. Tapping into the experience of a tried-and-true advisor can be the critical piece to ensuring a successful sale and transition for your practice.
What’s changed? The entire landscape.
Prior to 2017, practice sales often involved smaller one- or two-DVM practices being sold to associates.
A lot of that has changed. While smaller transitions do still occur, what’s prevalent today is larger practices getting acquired by corporate groups. These larger deals add layers of complexity to the sale process, making navigating a sale alone a challenging endeavor.
It’s in the buyers’ best interests, often, to count on practice owners taking a shot at a DIY sale. This can lead to undervalued practices and deals that are fundamentally misaligned with the seller’s long-term goals.
Working with an experienced veterinary practice advisor not only helps maximize your practice’s value but also ensures that your deal fits what you’re looking for. After all—what good is a sale if it doesn’t meet your specific financial and personal objectives?
How does an advisor add value?
1. Comprehensive Financial Analysis
Working with an experienced advisor means you’ll receive a detailed analysis of your practice’s financial health. What you should expect to discuss includes:
- Identifying all potential add-backs to EBITDA (earnings before interest, taxes, depreciation, and amortization)
- Scrutinizing cash flow and working capital efficiency
- Diving into your debt load and capital structure (i.e., evaluating and optimizing your debt profile can make your practice more attractive to buyers)
- Nailing down your key performance indicators (e.g., average transaction value, revenue per patient, etc.)
- Presenting a clear picture of your practice’s profitability to all potential buyers
- Using industry data to assess your practice’s performance against industry standards—and identify areas for improvement
2. Navigating Complex Deal Structures
Modern veterinary practice sales often involve more complex and intricate deal structures. Expect your broker to guide you through:
- Evaluating your various options—including parent company equity (i.e., offers of equity in the buyer’s parent company)
- Navigating the tax implications of different deal structures—with recommendations offered on the most tax-efficient structures
- Negotiating earnouts and contingent consideration when appropriate (e.g., seller notes, holdbacks, etc.)
- Weighing the pros and cons of entering into joint ventures vs. 100% sales
- Structuring deals to protect your interests in co-ownership scenarios (e.g., non-compete clauses, provisions around indemnification, etc.)
- Exploring support tracks for post-close integration and transition
3. Real Estate Considerations
Have you considered all the real estate involved? Your advisor has. They can help you:
- Conduct due diligence on property and lease agreements—including any environmental assessments, zoning compliance, and specific lease terms and restrictions
- Explore options like holding the real estate, selling it, contributing it to a REIT, or conducting a 1031 exchange (i.e., in the US, this lets sellers defer capital gains taxes when reinvesting sale proceeds in a similar property) or a Section 85 rollover (i.e., in Canada, this lets sellers defer capital gains taxes when transferring shares of a small business to a corporation)
- Navigate the implications of real estate ownership or leasing on your available financing options
- Evaluate and analyze the real estate’s contribution to your practice’s value, making it a factor in the broader negotiation strategy
4. Addressing Associate DVM Needs
You know this better than most: your team is crucial to your practice’s success. Thinking about their needs is critical, too. A good broker will:
- Understand trends around DVM compensation packages (i.e., salary, benefits, mentorship, etc.) to ensure offers are in line with market standards
- Facilitate smooth transitions for your associates by negotiating contracts, non-competes, and partnership agreements
- Address associates’ concerns during negotiations to ensure their interests are being represented
- Align practice goals with the career aspirations of your associates (i.e., the win-win scenario is when the buyer’s goals for the practice align with the professional goals of your associates)
5. Tax Strategy Integration
While they may not be tax advisors themselves, your broker should work with your CPA and financial advisors to:
- Executive proactive tax planning to explore all available options for minimizing your tax liability
- Ensure both federal and state tax implications are considered
- Offer tax strategies specific to your industry (e.g., installment sales, charitable remainder trusts, etc.)
- Advise on any post-sale tax implications, including potential audits and any requirements for ongoing tax compliance
6. Customized Exit Timing
Your broker should have your personal and professional goals in mind, too. They should help align your desired exit timeline with:
- Your financial preparedness for exiting your practice (e.g., retirement planning, post-sale income needs, etc.)
- Detailed contingency planning to nip in the bud any potential delays or challenges that could arise during the process
- Factor in any current economic trends, interest rates, and industry consolidation activity to optimize timing and maximize valuation
- The natural timeline associated with specific buyers
- Your personal and professional goals
Why choose a specialized veterinary practice advisor?
General business brokers are just that: general. While they may have broad experience, you know that the veterinary industry is filled with unique idiosyncrasies that require specialized knowledge.
At myVETgroup, we understand that selling your practice goes beyond the numbers. It’s about honoring the work you’ve put in, ensuring your patients are taken care of, and setting yourself up for what comes next on your journey. We’re focused on more than just securing a deal—we aim to come alongside you as your partner through this significant milestone.
We take pride in taking time to dive into your unique contexts, explore your aspirations, and unpack your concerns. We understand that this is not just a business transaction, but a significant personal and emotional transition. Our team provides support and guidance every step of the way, ensuring a smooth and positive experience.
Whether your goal is to retire on a high note, pursue some new venture, or just step away and find some headspace, we tailor our approach to fit what you need.
Our team has seen it all, having brokered numerous practice sales across all sorts of individual and group contexts. It’s this collective experience that allows us to:
- Anticipate potential roadblocks and be proactive about addressing them head-on
- Tap into our extensive network of buyers to determine the right fit for your practice
- Provide valuable insights into current market trends and changes in buyer preferences
- Ensure a smooth transition that honors your staff, your clients, and the culture you’ve carefully crafted over all these years
What’s next? A partner for the next chapter.
You deserve a partner who approaches this process with the same level of care and attention to detail that you’ve always provided to your patients.
By choosing to work with a specialized veterinary practice broker, you’re not just hiring a salesperson—you’re gaining an advocate, a negotiator, and a guide. You’re ensuring that your practice’s value is maximized, your interests are protected, and your legacy is honored.
As you contemplate this significant step, remember that just as you’ve always advised your clients to seek the best care for their beloved pets, you owe it to yourself and your practice to seek the best guidance in this crucial transition. Let us help you navigate this journey with confidence, ensuring that your practice’s next chapter is as successful and fulfilling as the one you’ve written.
Ready to take the next step? Book a call with us today to discuss your specific needs and how we can help you achieve your goals.
