For many people, owning and running a veterinary practice is more than just a job, it is a way of life. Most veterinarians are deeply passionate about helping the animals that visit their practice and feel fortunate enough to be able to combine something that they love with a successful business. You may never plan to sell, but you never know! Whether you are looking towards retirement, a change in your career or even just relocating, a successful veterinary practice exit strategy will help to make sure that you can start the next phase of life with as little stress as possible.
There are several reasons why it is important to have an exit strategy from your veterinary practice.
When you are busy and living in the moment, it can be very easy not to want to think about what the future might hold. Nevertheless, you need to know what your business goals are so that you have something to work towards. Reaching this will enable you to feel a sense of accomplishment once you reach your goals and this can help alleviate some of the ‘lost purpose’ emotions that are so common amongst veterinarians when they first find themselves no longer working.
Similarly, to reach your goals you will need certain strategies in place. This will enable you to develop better business practices and in turn, these will add value to your veterinary practice and make it look much more attractive to potential buyers.
Exactly what you will need to include in your veterinary exit strategy will depend on your individual circumstances. Nevertheless, some of the things that you should consider include the following:
The valuation process of any veterinary practice is largely based on one key factor – your profits. Driving up profits without also raising costs isn’t always as difficult as some people may think. In fact, even just a small reduction in your monthly outgoings can add up to an overall increase in your profits. However, you will need to start doing this at least two to three years before you seek a valuation to see a significant improvement in your net yield.
Chances are that things have changed considerably since you last bought or sold a veterinary practice. As such, it is extremely valuable to enlist the help of an experienced broker who deals with practice sales on a regular basis and understands the current market conditions and where your practice will fit. Using their knowledge and experience, they will be able to advise you on any changes that you will need to make to improve the saleability of your practice as well as ensure that it is priced competitively but fairly.
Although your broker will be able to give you a very good indication as to the value of your practice, it is also worthwhile getting an independent valuation. There are many different factors that can influence the overall value given to your practice and it may be that there are a few simple things that you can do to increase this figure without dipping too far into your bank balance.
Although there is no need to tell your staff that you are seriously considering selling, there are some proactive things that you can do to help secure their jobs for the future. This is especially important if you have skilled and experienced staff whose retention forms part of the valuation of your practice. Your broker will be able to advise you on non-compete agreements which are routinely given to staff where a business sale is on the cards. These can be used to protect employers against former employees revealing sensitive information about their business and to prevent the employee from working for a competitor in the same field or starting up their own business in the same field.
If you have a veterinary practice and are now starting to think about your exit strategy, our dedicated and professional team would be delighted to assist you in any way that we can. Please contact SVP to learn more about partnering with Southern Veterinary Partners, and how SVP can help prepare a veterinary practice exit strategy.