How to Sell Your Veterinary Practice
According to veterinary accountant, Gary I. Glassman, CPA, partner, Burzenski & Company, PC, there are two basic ways veterinary practices get sold:
- A sale of assets and
- Sale of stock Sale ofStock (Corporations)
- Usually seen in the sale or purchase of partial interests
- Usually sold or purchased at a lower amount than through an asset sale/purchase Sale of Assets
- Assets usually sold are selective. Usually:
- Accounts Receivable
- Inventory
- Fixed assets
- Goodwill
- Some of the sale price is also usually allocated to a covenant not to compete.
Owners can sell practices by requiring to be paid the entire sales price with third-party financing (i.e. bank, medical finance company) or holding an installment note. Third-party lenders will look to cash flow to support their debt. When practice owners accept the position of holding debt, they should always require a good down payment (20% of purchase price) and expect a reasonable rate of interest.
The bottom line to any good sale is that the price paid is based upon the practice’s optimum performance. Spend the time and energy to ensure you give your own practice the financial checkup you would provide your client if it were veterinary care. It takes a minimum of two years optimum financial performance to ensure the highest calculated value.
