Total Practice Solutions Group

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Broker Tip of the Month – July 2017

It is important to remember the capitalization rate is at the discretion of the evaluator. Important factors that determine one’s rate are location, growth of revenue stream, ability to transfer goodwill and demographics. Lower capitalization rates indicate greater risk to the investor while higher rates are associated with less risk.

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Broker Tip of the Month – June 2017

Sellers sometimes assume a sale should be a simple do it yourself project, but after a sale closing, they realize a broker valuation to maximize sale price and a broker’s experience to explain the ‘why’ regarding allocation for asset values being sold was needed. Asset closing allocations are commonly negotiation issues, requiring broker and tax professional help, not one side’s data.

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Broker Tip of the Month – March 2017

Many buyers today are cautious about buying a practice that is seeing its own emergencies. Most buyers do not want that burden on their lifestyle. When preparing to sell, it is best to wean the clients off of seeing emergencies about two years ahead of going to market. This will stop any concern a buyer may have regarding losing clients after the sale by changing that policy suddenly after close.

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Broker Tip of the Month – October 2016

Practice sale value and buyer financing may be decreased or denied, if practice tax returns include non-veterinary expenses. Buyers and banks are reluctant to rely on tax returns that have other expenses listed and/or blended with veterinary expenses. The solution is to have at least 3 years of presale tax returns that include only business expenses of the practice, even if taxes paid or CPA costs increase.

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Posted on by KurtLiljeberg in Business Valuation, Seller Articles, Seller FAQ Leave a comment