As previously stated, with the unprecedented number of veterinary practices coming up for sale as baby boomers reach retirement age, you need to plan accordingly.

One step that you should consider early is planning an exit strategy.  This strategy helps to identify any areas of concern that might hinder your practice’s salability.  This will help avoid unhappy surprises later.

By getting a thorough appraisal, a letter of opinion, you will now know where you stand financially in today’s marketplace.  A letter of opinion is a comprehensive analysis of practice value and supporting data formulated from 3-4 years average of P/L and tax returns coupled with a subjective cap analysis based on a broker’s thorough review of the practice and demographics.

After receiving the letter of opinion, practice analysis by the owner and broker can help identify financial inconsistencies, subjective red flags that would hinder a maximum sale price.  While certain factors that affect the value cannot be changed, such as location, other factors, such as curb appeal and the Average Client Transaction (ACT), can be changed and will result in a dramatic increase in practice value.

So obtaining an accurate idea of the value of a practice at the outset of the exit strategy is vital.  This will allow you to make changes 2-3 years before placing the practice on the market and avoid unrealistic expectations.  After all, you have spent years of your life building a veterinary practice that you can be proud of, so it would benefit you to spend the time and effort into getting ready for the marketing with professionals that can help you maximize your lifetime investment, your veterinary practice.