Key Takeaways
- Start preparing well before you plan to sell.
- Clean financials and a current valuation can help you understand where you stand and what may need attention.
- Surround yourself with advisors who understand veterinary practice transactions.
- A strong, trusted practice team can make the transition and due diligence process easier.
- Address known problems before going to market rather than hoping they won’t surface.
Why do some veterinary practice sales move relatively smoothly while others become stressful and difficult?
In a recent episode of 360 Half Seconds, 360 Vet Sales CEO Matt Arena and Kia Banisadre discuss several factors they’ve seen make a difference, starting with preparation. Ideally, owners should begin thinking about a potential sale one to three years before going to market. That gives you time to get your financials in order, obtain a valuation, and determine what you actually want from a transaction.
A valuation can be particularly useful well before a sale. If the practice isn’t worth what you hoped, you still have time to ask what could improve its value. It can also help you and your financial advisor begin planning for what life after the sale may look like.
Put the Right People Around You
Most veterinary practice owners will go through a business sale once, which makes an experienced advisory team especially important.
Matt recommends working with a veterinary practice broker, an M&A attorney experienced in veterinary transactions, an accountant or tax advisor, and a financial advisor. Each brings a different perspective, from negotiating the transaction and evaluating deal terms to understanding the tax implications and planning for the proceeds.
Your internal team matters too. A trusted practice or hospital manager can be particularly helpful during due diligence, when buyers and advisors need significant amounts of information while you’re still trying to run the practice. An organized, responsive process can make the entire transaction easier.
Trust also matters when it’s time to tell employees about the sale. Team members who believe you’ve considered their future, as well as your own, may be more comfortable following you through the transition.
Take Care of Problems Before You Sell
If you already know there’s a potential problem in the practice, don’t assume it will stay in the background during a sale.
Whether it’s a difficult employee, a potential flight risk, messy financials, or another unresolved issue, problems have a way of surfacing during due diligence, often at the worst possible time. Being candid with your broker gives your advisory team an opportunity to address those issues before they threaten the transaction.
The same applies when there are multiple owners. You don’t necessarily need to want the same things from a transaction, but understanding one another’s goals before going to market can make it easier to evaluate and structure potential deals.
Ultimately, a smooth sale comes down to being prepared, surrounding yourself with the right people, and dealing with issues before they become surprises.
If you’re considering selling your veterinary practice, even if a sale is still a few years away, 360 Vet Sales can help you understand where you stand and how to prepare. Our practice valuations are complimentary and can be a useful first step in planning for the future.