Veterinarians always have many questions about the wisdom of selling their practice. For most, this is a life-changing decision. Following are five questions often on seller's minds and how to answer them.
1. Am I Ready to Retire?
This is a question only you can answer. There are various measures of being ready, including emotionally, financially, and socially. Make plans before embarking on your post-career life. For example:
Have you put plans in place that will help you continue to lead a satisfying and meaningful life after you leave your practice? Retirees report greater contentment when their retirement includes the companionship and support of a network of family and friends.
Have you considered retirements details, such as the pluses and minuses of claiming Social Security early, or delaying it? Statistics indicate that every year that payments are delayed, between age 62 and 70, the size of the benefit is increased by approximately seven percent to eight percent.
2. Will a Sale Fund My Retirement?
Veterinarians who successfully retire typically have saved throughout their career, rather than relied on the sale of their practice to fund their retirement. Practice sale amounts will almost never add up to all of the spendable income needed in retirement, over a course of ten, fifteen, or twenty years.
3. Can I Support My Desired Retirement Lifestyle?
Numerous factors go into retirement budgets, including age, retirement savings value, what your savings portfolio looks like, the estimated, required monthly income, and the number of years that you anticipate the money will need to last. Your business broker and accountant can offer professional assistance that is vital in helping you calculate and reach your future lifestyle objectives.
4. Are Buyers Available? Who Are They and What Are They Looking For?
Many sales brokers are reporting that they currently have more buyers, for all types of practices, than they have sellers. Typical buyers are veterinarians with three to eight years of experience as an associate. Most are looking for independence, as well as the safety and security of a practice that has enjoyed professional and financial success over the years. Small animal practices located in large metro areas are in high demand. Once location and animal clientele has been satisfied, buyers look to the financial aspects of the practice. The most sought-after practices are those that can provide a six-figure income to a new owner in the first year, after payment on their purchase loan.
5. Should I Sell the Practice Myself?
While not legally required, hiring a business broker means that you will have a specialist at your side to guide you through the largest financial transaction of your life. Selling your practice is a full-time job, involving:
Analyzing and setting the price
Locating and screening potential buyers
Communicating with other professionals
The magnitude of the emotional, financial, and social consequences of retirement should not be minimized. A wise seller will be brave and ask questions. A knowledgeable professional will have the answers.