Preparing your veterinary practice for sale

The market for selling veterinary practices has never been more buoyant. A mix of large corporate entities and private equity players is boosting typical interest from associate vets aiming for ownership – a trend we will cover in an upcoming article.  

Preparing a veterinary practice for sale requires careful planning and execution to:

• present the practice in the best possible light to potential buyers
• maximise return on investment

It’s about more than just finding a buyer. It's about highlighting the business's true value and potential. To achieve this, there are a number of important actions that practice owners need to take. 

If you own a veterinary practice and you’re planning to sell, here are some practical steps to help increase your opportunity and maximise the sale price…

Optimise trading performance before the sale: To add business value, look for ways to make sustainable improvements to financial performance. Some examples include winning new customers, improving margins through increased efficiency, and reducing overhead costs.

Review the client base: This will identify any clients who may be at risk of leaving after the sale. It’s essential to have a client retention plan in place to give potential buyers confidence that clientele will remain after the sale.  

Review ownership structure: There are a range of attractive capital gains tax exemptions that may be available through intelligent structuring and deal execution. This process should commence well in advance of the decision to embark on a sales campaign (i.e.: typically two years or more before).

Get the financials in order: It’s essential to have accurate and defensible financial records for at least the past three years. This information will be used to determine the value of the practice and is needed for potential buyers to assess the business’s performance. It will also allow the business to reach maximum value.

Ensure lease of premises is of sufficient duration: Where premises are leased and fit for purpose, there should ideally be a minimum of five years remaining – plus potentially an option to extend to around 10 years. If not, there is a risk of the goodwill being discounted at sale.

Keep the premises well maintained: Potential buyers will likely visit the practice, so it’s essential that the premises are clean, tidy, and well-maintained. Any repairs or maintenance work that needs doing should be completed before the practice is listed for sale. This will enhance the marketability of the business.

Review staffing: Assess staffing levels and ensure they are appropriate for the size and scope of the practice. Make sure all staff contracts are up-to-date and review any potential issues that could arise with staff during the sale process. “Lock in” key staff insofar as possible, as having staff continuity will allow for a smoother transition to new owners. 

Seek professional advice: It’s essential to seek advice from a range of professionals such as brokers, business advisors, or lawyers who have experience in selling veterinary practices. They can help with:

• valuation
• identifying potential buyers
• negotiations
• legal contracts
• other critical aspects of the sale process

Once your practice is sold, don’t forget to prioritise financial planning. Consider speaking with a wealth management specialist or financial planner to make sure you are on track to achieve your personal or business wealth goals. The funds you gain can be significant, and managing them correctly can be a game-changer for your future. Whether you're thinking of investing, saving, or expanding into new ventures, the right financial guidance can make all the difference.

Getting a veterinary practice ready for sale involves looking at its financial, operational, and promotional elements. With the right planning and actions, it's possible to sell your practice in a way that benefits you while positioning the new owner for success.

To speak with an experienced business adviser about selling your veterinary practice, please contact your local RSM office.