Fortunately, what makes your practice desirable to you will often be what makes it desirable to buyers. It’s not all about the money. When buyers are comparing two practices of equal profitability, other factors come into play that increase the desirability of one practice over another. When selling your veterinary practice, along with the financial matters involved, take note of the importance of all of the other factors that make a practice the one that sells.
1. Practice Value
Profitability is the financial return for owning and running a business, and includes the revenues that remains after paying all the bills. The value of a veterinary practice is based on its true profitability, as determined by a professional appraiser. For a practice to be viable to buyers, it must generate enough cash flow to allow the buyer to be:
Able to pay all operating expenses, including salaries.
Able to repay the debt incurred by purchasing the practice.
The practice value desirability feature can make-or-break a buyer's ability to purchase. The higher the true profit, the higher the practice value, the higher the desirability of the property for buyers.
2. Geographic Location
Geographic location is often a critical factor in the salability of a practice. Businesses located in areas where no one wants to live can be difficult to sell. Great practices in tiny rural towns are not as desirable as unexceptional practices that are situated in “hot areas.” Within cities, buyers are often searching for practices in growth areas with compelling demographic characteristics. Practices are more desirable to buyers when they are in communities where veterinarians and staff can be recruited when the practice starts to grow. Ideally, the practice should be located near an emergency practice that specializes in night and weekend emergency care services to improve the buyer's overall quality of life.
3. A Clean, Attractive, Well-Equipped Facility with Room to Grow
First impressions have a huge impact on how desirable a practice is. When selling your veterinary practice, your facility may simply need a deep cleaning, some minor remodeling, painting, and tidying up to completely revamp its appearance. A redesigned landscape, re-striped parking lot, or an updated sign can charm buyers on their first visit. These cosmetic endeavors can play a major role in a buyer’s selection process. Buyers are also looking for current, functional equipment that can keep them up to standards from day one of their purchase. However, you need to consult with a professional practice broker prior to investing in expensive equipment.
4. Established Systems and Procedures
Established systems and procedures in the practice help minimize the buyer’s risk of purchase. When selling your veterinary practice, it will be more desirable if you have:
Low staff turnover and fair wages.
Commitment to ongoing training for doctors and staff.
Delegation of management responsibilities to assorted staff, versus complete dependence on you, the selling veterinarian.
A revenue mix that includes professional and ancillary services.
Business brokers know how buyers think and what they want. If you're selling your veterinary practice, get the insight you need to attract buyers. Start now to get your business in sale-ready condition.