Deciding when to sell your practice can have a huge impact on the valuation of the business. From changing market conditions to major personal events, the sale of your practice needs to be timed just right. So how do you know when it's the right time to sell? Ask yourself these three questions:
- Where is the Market Headed? - In general, the veterinary market is pretty stable and seems to be trending upward as more and more people become aware of the importance of proper veterinary care for their animals. Nevertheless, changes in technology and local markets can still cause fluctuations in value. For instance, if all the other practices in your area are changing direction, and you have not invested in a remodel or new technology, it may not be time to sell until you are back in line with the rest of the market.
- Is the Business Ready? - Most owners begin grooming their practice for sale as much as five years in advance. This includes making updates to technology and furnishings inside the building, as well as updating the look of the practice. In addition, many owners seek to diversify their client lists to avoid appearing too dependent on any one client. There is also a period of grooming the staff and management team to run the business after the owner departs. If these steps have not been completed, the business may not be valued appropriately.
- Do I Know Who To Contact? - Selling a business can take you through some very choppy waters. To protect yourself and your interests you need to have strong legal counsel. However, you should also consider contacting a broker that deals frequently with practices of your size and type. Oftentimes your legal counsel alone is not sufficient to arrange all the finer details of the sale. A broker will be able to direct you in the best practices as well as what to expect from the entire sale process as you transition the business to the new owner. If you don't already have a sales brokerage contact, now is the time to start looking at what a sales brokerage has to offer.
If you can answer these three questions, and you're ready to call your sales brokerage firm, then it may be time to go ahead with the sale. However, if you need more time to adjust to current market conditions or get your business ready for you to step away, then you may put yourself on a one or two year exit plan.
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