If you have invested time, money and effort into your business, you will understandably want to know to what degree it has all paid off. Knowing that value of your veterinary hospital can be essential when it comes to considering the next steps you might take in your career or personal life. This is particularly true if you are considering:
Whatever your reason for wanting to find out what your veterinary hospital is worth, to do so you will need to arrange for an appraisal from a professional broker. This may also be referred to as a valuation, but they both mean the same thing – the amount, in dollars, that your veterinary hospital is worth on the open market.
There are a range of different factors that can influence the appraisal value given to your practice. One of the primary things that your appraiser will consider is your practice speciality type. Whether you cater primarily to large or small mammals, equines or exotic pets, or if you specialize in dental care, house calls or something else entirely, may make a difference as to the value your practice is given.
Other factors that will be considered and could be improved in order to increase your veterinary hospital’s appraisal value include:
Profitability. The more profitable your veterinary hospital is, the higher it will be valued. If you are planning on selling, profitability is also linked to attractiveness and if you are making a reasonable profit, you are more likely to sell quickly at a fair price.
Your financial position. Do you regularly have more outgoings than money coming in? Do you still have a mortgage on your business or other loans? Your financial position could play a part in the appraisal figure you are given. Clearing down any debts, if you can, will always go in your favor.
Location. Whether or not your practice is easy to get to or owning a practice in an area where the cost of living is high could impact on your valuation figure.
Your equipment. Great veterinary practices invest as much as is reasonable into having modern, innovative equipment. The better your equipment is or the better stocked you are, the greater you can expect your appraisal to be.
Staffing. Those practices with experienced and well-educated and trained staff tend to be worth more on appraisal than those with high staff turnover or employees that are poorly trained. Consider boosting the professional development of your team to add value to your practice valuation.
Your services. Generally, the greater the number of high-quality services you can offer, the more your practice will be worth, particularly if you have specific infrastructure in place to support these, such as a doggy spa or training field. If you are looking at boosting the value of your veterinary clinic, it may be worth considering expanding your service repertoire.
Reputation. Often, when someone is a service provider a great deal of their business is staked upon their reputation. If much of your business is built on guaranteed personal attention from a specific veterinarian, if that vet is removed from the equation, the practice may not be worth as much. For this reason, it is important for veterinary practices to deliver consistent quality across all facets of their service, from first contact to pet aftercare.
Other vets in the area. If your veterinary hospital is the only one in the local area, it is probably worth more than if there are several competitors within a short distance. Even if there are others nearby, if you can offer a larger range of services at better quality and cost, you could still see your practice valued higher.
If you would like more advice on valuations for veterinary practice appraisals, including the best ways to ensure your veterinary hospital is valued at top dollar, please do not hesitate to contact Southern Veterinary Partners. As a veterinarian-led organization, we have worked with dozens of veterinary practices sharing resources to assist with their practice transition. Click here to contact us today, and learn the benefits of the Southern Veterinary Partners team.