Realistic Representations of Your Practice
Veterinary Practice Valuations are required for a number of reasons, including serving as a basis to determine the selling price of a practice and in turn supporting the Purchaser’s request for acquisition funding, partnership admission and dissolution, associate buy in, income tax and estate planning, to name a few. Due to its use, this type of financial reporting is extremely important to be correct or better yet realistically representative of the fair market value of the veterinary practice.
Can you imagine basing the selling price of your clinic on a value that isn’t realistic to the market conditions detracting potential purchasers as opposed to attracting them, or worse yet, not being not accepted by the Purchaser’s financial institution as support for the acquisition loan?
In today’s world where business owners courier their fiscal period end books to their accountant and await the financial statements, income tax return and invoice, there is an empty gab of not knowing how your veterinary practice is doing financially or how it compares to other veterinary practices from a financial point of view. A valuation process, when reviewed with the client in detail, provides valuable information about the veterinary practice financial, its comparative relationship to others in the industry as well as its advantages and weaknesses; valuable information if one wants to sell their practice at the highest possible value or just wants to make available more profits to capital expansion or personal financial rewards.
My valuation process includes reviewing the last three to four year’s financial statements, completing financial analysis and trend analysis, analysing the market within which the practice operates and in turn determines a realistic market value based on a variety of criteria, including the sustainable cash flow’s ability to repay the purchase price over a reasonable time period.
In completing a valuation of a veterinary practice, my objective is not just to justify a financial value, but rather identify the practice unique qualities where the real value resides and to identify areas where potential value lies. There are times when I recommend to clients not to sell, but rather take the information I have been able to assemble and make their practice more valuable. Often times I highlight potential profit or growth areas of a veterinary practice to purchasers in recognizing undervalued companies selling at guesstimated values.
My valuation process includes twenty five plus years of being involved in all aspects of the business of veterinary medicine. From being a professional accountant, to valuing, selling or purchasing small, medium, or large practices on behalf of successful and unsuccessful vendors and purchasers, I have extensive knowledge and experience in knowing and appreciating the financial value of the financial transactions of a veterinary practice.