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Veterinary Practice Valuations and Appraisals

At Practice Sales Advisors, we specialize in veterinary business valuations and appraisals. A veterinary practice appraisal is a crucial business evaluation tool for helping to understand whether a vet practice is profitable and what it is worth. In other words, it’s the price you can expect to receive if you decide to sell your practice and cash out.

If you're in the market to buy a veterinary practice, an appraisal is essential to determine how much it will cost to acquire the business. It also provides valuable insight into a business’s operational strengths and weaknesses which affect its profitability. These insights include factors such as how efficiently tangible and intangible assets, real estate, and leases are utilized. All Practice Sales Advisors appraisals are performed by credentialed appraisers to provide you with the most accurate, trustworthy appraisal.

How Do You Value a Veterinary Business?

To get a more realistic assessment of a private practice’s current value, Practice Sales Advisors uses the excess earnings method (EEM) for calculating valuations and appraisals. This method was initially developed by the Internal Revenue Service (IRS) in 1920. The EEM is often used to appraise private businesses like vet clinics because they typically have a significant investment in intangible assets like branding, computer software, reputation, and tangible assets like medical equipment and real estate owned by the practice.

The EEM method considers both the value of its tangible and intangible assets when evaluating a business. This formula calculates the practice’s current value based on the net tangible value of its assets and the capitalized value of its excess earnings. Additionally, our practice valuations also provide insight into the practice’s three main accounting categories: assets, liabilities, and owner’s equity. This can often lead to tax savings.

When You Should Order a Practice Valuation or Appraisal

Whether you own a veterinary practice or have an interest in buying or selling a vet clinic or animal hospital, you should order a full practice valuation when:

  • You want to know how much your veterinary practice is worth.

  • You want to know your practice’s strengths and weakness.

  • You are planning to buy or sell an existing practice.

  • You are expanding your practice.

  • You want to develop an exit strategy.

  • You are planning for retirement.

How Much Does a Veterinary Practice Appraisal Cost?

The cost of a veterinary practice appraisal and valuation can vary widely from $0 to over $3,000, depending on the scope of the analysis and the amount of detail it provides. Simple valuations that provide a cursory overview of the practice with limited financial information may be less costly but may not include sufficient practice data to determine the business’s current value the way a full appraisal would.

Practice Sales Advisors offers a complimentary sales price range summary for practice owners curious about what their practice may be worth for clients considering buying or selling a veterinary practice. However, if you decide to move forward with a sale or acquisition, a full veterinary practice valuation and appraisal will be necessary.

How Long Does It Take to Obtain a Practice Appraisal?

It generally takes approximately two weeks for Practice Sales Advisors to produce a thorough veterinary practice appraisal. However, an accurate and insightful valuation requires access to financials and other practice information. The actual length of time to complete a full appraisal also depends on how quickly we receive the necessary information.

If you would like to obtain an appraisal for a veterinary practice, please have the following information ready:

  1. Practice History, such as year established and business type, i.e., sole proprietor, LLC, Corporation, etc.

  2. Financial statements for the last three years.

  3. Real estate appraisal or lease information.

  4. Tax returns for the last three years.

  5. Owner-related expense report.

  6. Production report with average billable invoice details.

Veterinary Practice Appraisals and Valuations

At Practice Sales Advisors, your success is the heart of our business. Whether you are planning to buy or sell a veterinary practice or want to know what your practice is worth, our experienced sales advisors and credentialed appraisers will guide you every step of the way.

Call us toll-free at (844) 4PSA HELP to speak with a sales advisor to receive a complimentary sales price range summary for your practice today! You can also click here to view our current practice listings.

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