Key Takeaways
- Today’s market is still strong, and practice valuations remain well above what most industries experience.
- A higher multiple means very little if your adjusted EBITDA isn’t accurate or properly calculated.
- The conditions that created the valuation spike are unlikely to return.
- Timing should be based on your readiness, not someone else’s outcome.
Selling a practice is one of the most significant financial decisions an owner will make, and many are understandably focused on timing the market. A common question is whether it makes sense to wait for valuation multiples to return to the peak levels seen a few years ago. As discussed in this episode of 360 Half Seconds, the answer is clear: waiting for the market to return to those highs is not a sound strategy.
During the 2020-2021 period, many industries, including veterinary practices, experienced what can best be described as a market bubble. Private equity investment surged, competition increased, and valuation multiples climbed to unusually high levels, sometimes reaching 16x to 19x EBITDA. But as with most bubbles, those conditions were temporary. Over time, the market has normalized, and multiples have steadily declined toward more sustainable levels.
What’s important for owners to understand is that this decline is not a crash; it’s a correction. Today’s multiples, often in the 11x–13x range for strong practices, are still considered very healthy compared to most other industries, where valuations may sit closer to 5x-6x. In other words, even though the market is no longer at its peak, it remains highly favorable for sellers.
One of the biggest misconceptions in the market is focusing too heavily on the multiple itself. While multiples are widely discussed, they are only part of the equation. The more important factor is adjusted EBITDA, the true financial performance of the practice after normalizing for one-time expenses, owner-specific costs, and other adjustments. Without a proper understanding of adjusted EBITDA, a higher multiple can be misleading and may actually result in leaving money on the table.
Another key takeaway is that timing the market based on past performance is risky. The conditions that created the previous valuation peak, particularly the influx of private equity capital during COVID, are unlikely to repeat in the same way. The industry is no longer a “hidden opportunity,” and the dynamics that drove that surge have changed. Waiting for those exact conditions to return could mean missing a strong market that exists today.
For practice owners considering a sale, the focus should shift from chasing peak multiples to understanding their own numbers and readiness. A professional valuation provides clarity on adjusted EBITDA, identifies opportunities to improve value, and helps owners make informed decisions about timing. In many cases, small operational or financial improvements can significantly increase valuation, sometimes by hundreds of thousands or even millions of dollars.
Ultimately, the decision to sell should be driven by your goals, your financial position, and current market realities, not by what someone else achieved during a different point in the cycle. As this conversation makes clear, today’s market still offers strong opportunities, but those opportunities depend on understanding the full picture, not just the headline multiple.