TOP QUESTIONS ABOUT BUSINESS VALUATIONS

Updated: Oct 25


Have you had your practice appraised? Are you considering purchasing a veterinary practice & have no idea what the value of the practice is?

Here are some questions we are often asked. We hope these suggestions & tips help you in your endeavor to buy or sell a veterinary practice.


1. Why should I get a veterinary practice appraisal?

Appraisals are essential tools for;

1. Exit Strategy Planning: Prepares for a smooth transition.

2. Estate Planning: Ensures things are properly taken care of in the event the unexpected occurs.

3. Comparison: Serves as an insightful consulting tool to show how the subject practice measures up with industry standards, highlighting areas of easy improvement.

A huge advantage of a business valuation is identifying your company’s strengths and weaknesses. Start soon to allow for more time in addressing problematic areas that could be affecting the overall value.

PSA WAY: We share insight as to accounting categorization as well, which often leads to tax savings. Who doesn’t enjoy saving money?

2. How much are veterinary practice valuations?

Depending on the client's need valuations can range from complimentary to $3,000. Valuations are the foundation to selling your business.

PSA WAY: If you're thinking about selling your practice & are just curious as to how much your practice is worth, we are happy to provide a complimentary sales price range. This includes the sales price range for an individual buyer & corporate acquisition estimate.

3. How long does it take to get a veterinary practice valuation completed?

There are 2 main factors that influence the length of time an appraisal may take;

1. Access to Needed Financials

2. Responsiveness & Cooperation

PSA WAY: Once we receive basic practice financials, the process only takes our firm about 2 weeks to complete the valuation report!

4. What information is needed to obtain a veterinary practice valuation?

1. Tax Returns - Recent 3 years

2. Financial Statements - Recent 3 years

3. Practice History - Year Established, Practice Type, etc.

4. Production Report - Doctor Production, Average Invoice, etc.

5. Owner Related Expenses - Affects Valuation Add-Backs/Recasting

6. Real Estate Information - Estimated Value of Real Estate, Real Estate Appraisal if available or Copy of Current Lease

PSA WAY: We’re happy to work directly with your accountant & can move at a pace you’re comfortable with.

5. What qualifications should I look for in a veterinary valuation appraiser? Ask if the advisor is designated in business appraisal. What are their specific valuation credentials? For example, Certified Valuation Analyst (CVA), Certified Business Intermediary (CBI), etc. Professionals who are qualified to hold these credentials earn them by years of experience & hours of continuing education helping them stand out in the industry. Professional affiliations, accolades, and designations are all great indicators of the appraiser's level of professionalism. Do they specialize in veterinary practices, or do they just perform generalized business appraisals? When selling any business, you can expect a more accurate appraised value if the advisor is well-educated & experienced in the field of your business. The methodology for various business valuations is not all the same across the board. Additionally, how long has the advisor worked in the industry? Experience is key to ensuring you make the right choice in choosing who will be determining the value of the business you’ve worked so hard in building up. A professional resume should be readily available to you or even posted on the appraiser's website. If not available on the website, LinkedIn may be an easy point of reference as well.

We strive to make the veterinary practice valuation as easy as possible! Call us today with any questions you may have. We look forward to adding you to our long list of happy & satisfied clients who have become part of the PSA family.




©Rebecca Robinson Davis, CBI and www.practicesalesadvisors.com, 2021. Unauthorized use and/or duplication of this material without express and written permission from this site’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Rebecca Robinson Davis, CBI and www.practicesalesadvisors.com with appropriate and specific direction to the original content.

20 views0 comments