For anyone considering buying a veterinary practice for the first time, it is often easier to come up with a million reasons that you can't buy a practice right now than it is to make the leap. In addition, a number of myths have arisen which may discourage would be owners from buying their first practice. Here are five of the most common myths and why they may be wrong.
- Down payment required. There are many myths about the down payment required on a loan. The most common is that you need a 20 percent down payment, which definitely is not true when it comes to purchasing a business. However, you may be surprised to find that there are tons of zero to five percent down loan options that make this very affordable.
- I have too much school debt. The way you pay off a business loan is different from how you would pay off a personal loan. The loan is designed so that the practice pays off the loan from profits that come from within. Thus, your personal debt load is not a major factor as long as you have reasonably good credit.
- I should buy the practice I work in. In most cases it is actually better to purchase a veterinary practice that you have no personal connections with up front. This will make the transition to management easier and will keep you from making premature decisions as a manager before the practice is actually yours.
- Practice's lose clients and money after a sale. In reality, a new owner can mean a breath of fresh air for an old practice. Your new ideas and modern understanding of technology can actually help your practice grow as early as the first year under your ownership. This one is really up to you and how you manage your practice.
- All practices are worth 70-80 percent of gross. If you're looking at practices for sale and making assumptions about them being out of your price range, take a moment and slow down. Not all practices are worth 80 percent of their gross. Some practices are valued at far less due to outside factors. Don't give up on shopping around just because you think you're priced out of the market. There is always something available in your price range.
These are just the five most common myths that need to be put to bed when it comes to buying a veterinary practice. If you find yourself getting discouraged by the thought that you can't afford to buy, you should read through this list and remind yourself that many of your assumptions about the industry may have been false.
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