How Much Profit Is Enough?
How you spend excess money is your decision, not your adviser’s, but make sure you set goals and have a path to attain them.
Not that long ago, many veterinarians considered profit an unworthy goal. After all, they had a higher purpose: a calling to care for animals and prevent and alleviate their suffering. Profit was not a priority. As long as there was enough money to keep the lights on, things were fine. Keeping the lights on, however, […]
The whole picture
A cash stockpile can leave you with a false sense of security if you fail to scrutinize all the systems that keep your practice humming.
When a client presents a patient, how do you assess the animal’s health? Before touching the cat or dog, you might get a feel for its well-being based on coat quality, general body condition and demeanor. Do you stop there? Of course not. If we instead substitute a veterinary practice for the patient, the owners […]
Who ya gonna call?
Selling a practice isn’t a do-it-yourself endeavor.
Are you thinking about selling your veterinary practice? Are you ready for retirement? In a perfect world, your hospital would be appraised three to five years before you plan to sell so that you know what your practice is worth at that moment and to give you sufficient time to make changes that could increase […]
How uncertainty affects valuations
Buyers of veterinary hospitals prize the stability of earnings over time and the seller’s ability to successfully deliver goodwill.
What is the impact on a practice’s valuation during a crisis like COVID-19 when hospitals change how they manage clients and patients and when the usual daily grind is anything but usual? Honestly, not much — at least not yet. The two primary influencers of business value are cash flow and risk, both of which […]
Aspire to hire
Adding another veterinarian to a busy practice frees up time for you and other doctors to get more done on and away from the job.
How do you know when your hospital is ready to bring on another veterinarian? Maybe your current doctors are working more hours than they want. Or perhaps an associate veterinarian is planning a life change such as semiretirement or the birth of a child. Possibly, you want to spend less time on the medicine and […]
The value of waiting
Should you sell your veterinary practice while prices are high, or does a better option exist?
Ten years ago, the U.S. economy was beginning to recover from the Great Recession. If you wanted to sell your veterinary practice back then, finding a buyer was time-consuming and sales prices were stagnant. Today, the market has changed entirely. Hospital owners are inundated with inquiries from consolidators large and small offering higher prices than […]
Should you buy a no-lo practice?
Don’t automatically rule out a profit-challenged hospital. The problems, from a less-involved owner to poor inventory controls, might be easily correctable.
With so many practices being sold to corporate consolidators, private practice veterinarians might have a harder time finding a hospital to buy. If the asking prices for the “best” hospitals are out of your comfort zone, should you consider purchasing a no-lo practice? The VetPartners Valuation Council coined the term “no-lo practice” to describe practices […]
What are you buying exactly?
If you’re considering practice ownership, learn the differences between an equity purchase and an asset purchase.
One of the most important aspects to understand when you buy a veterinary practice is whether you are getting the business’s assets or equity in the existing company. I know I’m asking you to understand accounting terms, but this is important and pretty easy to grasp. When you buy the assets, you get all the […]
Sharing details about your practice’s performance builds trust in your employees and can help make your business even more successful.
Open book management (OBM) has been part of the business vernacular since the mid-1980s, yet it continues to be viewed with healthy skepticism. A 2017 article in Forbes magazine reported that most companies increase profitability and productivity by 30% in the first year after implementing OBM. So, knowing that, what is OBM and would how […]
Manage your expectations
A variety of factors helps determine what your practice is worth and what a buyer is prepared to pay. The market today isn’t all about consolidators.
While specialty practices and referral centers historically have sold for high prices, general practices were not the darlings of corporate takeovers until now. Some owners of companion animal practices have received generous purchase prices, much higher than we would have imagined five years ago. “EBITDA” (earnings before interest, taxes, depreciation and amortization) and “multiples” have […]