Key Takeaways
- A veterinary practice doesn’t stop changing just because it’s for sale, but some routine business decisions can have new consequences once a transaction is underway.
- Changes to compensation, staffing, hours, or other significant expenses may affect the financial assumptions used to value the practice.
- Unexpected developments, from losing a veterinarian to replacing essential equipment, don’t necessarily derail a sale, but they shouldn’t be ignored.
- Sellers shouldn’t put necessary business decisions on hold. Instead, significant changes should be discussed with the transaction team before they’re made whenever possible.
- Keeping communication open throughout the sale can help prevent routine business developments from becoming unwelcome surprises during due diligence.
Selling your veterinary practice isn’t an overnight process. From the time you go to market through due diligence and closing, several months will pass. Meanwhile, patients still need care, employees still need to be managed, equipment still breaks, and the practice still has to operate.
That’s where things can get complicated. Decisions you might normally make without a second thought can carry different implications once your practice has been valued and a transaction is underway. At the same time, things outside your control can change the financial or operational picture a buyer originally evaluated.
The answer isn’t to put your practice in a holding pattern until the deal closes. It’s to understand which changes may matter and when you should bring your transaction team into the conversation.
Your transaction team will typically include your veterinary practice broker, M&A attorney, and financial advisor, along with any key staff or family members you’ve chosen to involve in the sale. Different decisions may require input from different members of that group, but keeping the right people informed can help you understand how a business decision could affect the transaction before you act.
Your Valuation Is Based on a Picture of Your Practice
When your practice is valued, the financial analysis reflects how the business is operating at that point in time. Adjusted EBITDA, staffing costs, veterinarian production, revenue trends, and other factors help establish both value and what buyers expect from the business. Buyers will continue examining those areas during due diligence.
Now imagine that three months into the sale process, several employees receive substantial raises. Or you hire another veterinarian. Perhaps you change operating hours or add a significant recurring expense.
None of those decisions is inherently wrong. Some may be exactly what the practice needs. But they can change the economics buyers are evaluating. Matt Arena discussed this in a recent episode of 360 Half Seconds. 360 Vet Sales sees sellers make compensation or personnel changes after going to market, sometimes because they are addressing issues that have been overdue for some time. When those changes increase ongoing expenses, they can reduce adjusted EBITDA and create questions during due diligence.
Some Changes Aren’t Your Choice
Of course, not everything that happens during a sale is something an owner planned. A veterinarian could unexpectedly resign. A piece of essential equipment could fail. Revenue could have an unusually strong or weak month. A lease issue could surface. A key employee could ask for a compensation adjustment that can’t reasonably wait until after closing.
These developments don’t automatically mean your sale is in trouble. Businesses change, and buyers understand that. What matters is how significant the change is, whether it affects the assumptions underlying the transaction, and how it is handled.
Buyers scrutinize financial performance, payroll, staffing, revenue trends, and operational issues during veterinary transactions, so a meaningful change in one of those areas may require explanation or additional documentation.
Trying to hide or minimize a material development is far more likely to create trouble than addressing it directly.
Don’t Stop Running the Practice
There’s an important distinction here. Preparing for a sale doesn’t mean owners should stop making good business decisions. If an employee deserves a raise, equipment needs to be replaced, or a staffing problem needs to be solved, ignoring it solely because the practice is for sale could create an entirely different set of problems.
The better question is: Does my transaction team need to know before I make this decision?
For significant changes, particularly those affecting recurring expenses, revenue, staffing, or the way the practice operates, a conversation before acting can help you understand whether the decision could affect the transaction and how best to handle it.
There may be a straightforward solution. A one-time expense, for example, may be treated differently from a new recurring cost when adjusted EBITDA is calculated. Documentation matters in determining whether expenses are truly nonrecurring and how buyers evaluate them. The important thing is not to assume.
Keep the Business Strong Through Closing
The goal during a sale isn’t to preserve your practice exactly as it looked on the day it was valued. That’s rarely realistic. It’s to continue running a healthy business while avoiding unnecessary surprises.
Keep normal processes and compensation reviews on schedule rather than delaying problems until a sale is underway. Continue paying attention to revenue, staffing, and operations. And when something significant changes, talk with the people guiding your transaction before deciding how to proceed.
A veterinary practice sale involves a lot of moving pieces. Your practice is one of them. Keeping it healthy while keeping your transaction team informed can make it much easier to get from valuation to closing without turning normal business changes into deal complications.
Thinking about selling your veterinary practice? 360 Vet Sales can help you understand what your practice is worth and what to expect throughout the sale process. Our complimentary valuations give you a clearer picture of where you stand before you make your next move. Contact us to start the conversation.