Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Buying & Selling Veterinary Practices

726 views

Published on

Buying & Selling Veterinary Practices

Published in: Health & Medicine, Business
  • Be the first to comment

Buying & Selling Veterinary Practices

  1. 1. Buying & Selling Veterinary Practices © 2010 Allen & Young Business Brokerage LLC 2500 N Tucson Blvd Ste 109 Tucson AZ 85716 T 520-327-4454 F 520-327-1271 info@allenandyoung.com www.allenandyoung.com
  2. 2. First Lets Talk About Pricing Veterinary Practices The first thing to remember is that while there may be many Veterinary Practices, each one is unique. The principal factors that will influence the price of these businesses are the following: •Location (practices with multiple doctors in dense urban areas command the highest prices) •Size of customer base, frequency and dollar amount of visits •Profitability (if youʼre not profitable, youʼll have a hard time selling) •Competition (if youʼre the only game within a few mile radius, thatʼs obviously great) •Small Animal Focus. Practices with a focus on larger domesticated animals are less profitable © 2010 Allen & Young Business Brokerage LLC 2500 N Tucson Blvd Ste 109 Tucson AZ 85716 T 520-327-4454 F 520-327-1271 info@allenandyoung.com www.allenandyoung.com
  3. 3. Additional factors that must be considered in pricing a Veterinary Practice are: • Rent amount as a percent of sales (are you paying too much rent?) • Additional profit centers within your business (special and related products and services offered) • Number of doctors and ratio of Veterinarians to support staff. • Types of Surgery Performed? 1 or 3 vaccination schedule? • Cleanliness is critical. (Who wants to take their pet to a filthy clinic?) © 2010 Allen & Young Business Brokerage LLC 2500 N Tucson Blvd Ste 109 Tucson AZ 85716 T 520-327-4454 F 520-327-1271 info@allenandyoung.com www.allenandyoung.com
  4. 4. Operating Benchmarks for a Veterinary Practice • COGS typically run 20-25% of gross revenues • Payroll generally is in the range of 20-25% of gross revenue • A typical practice draws $250-$500,000 in revenue per Veterinarian • Occupancy cost (Rent) should be no more than 8-10% • Gross profit should be around 10-20% © 2010 Allen & Young Business Brokerage LLC 2500 N Tucson Blvd Ste 109 Tucson AZ 85716 T 520-327-4454 F 520-327-1271 info@allenandyoung.com www.allenandyoung.com
  5. 5. Advantages of Veterinary Practices • The risk of malpractice liability is much lower than in other medical professions, and with it lower insurance costs • Veterinarians who own the practice control their own destiny and Compensation for the Veterinarian who owns the practice can be many times greater than what an associate Veterinarian employee earns. • Veterinarians are highly regarded in the community as caring people, who provide a helpful service to the community Disadvantages of Veterinary Practices • The hours can be longer than in many medical professions • Large investment in education, with lower pay than DDS or MD. • Management responsibilities of owning and running the clinic can detract from the practice of Veterinary medicine if the owner is also a Veterinarian © 2010 Allen & Young Business Brokerage LLC 2500 N Tucson Blvd Ste 109 Tucson AZ 85716 T 520-327-4454 F 520-327-1271 info@allenandyoung.com www.allenandyoung.com
  6. 6. Outlook for Veterinary Practices • There is currently a trend toward consolidation, and buyers are looking to add profitable well-established practices to their portfolio. • There is a trend towards more female veterinarians buying practices, while fewer Veterinarians overall are treating large animals. • Financing is easier to obtain for the purchase of a Veterinary Practice than for many other businesses • Effective loyalty marketing and add-on products can add to revenues, and there is a trend toward clinics targeting profitable niche markets such as “animal hotels” and “alternative medicine” © 2010 Allen & Young Business Brokerage LLC 2500 N Tucson Blvd Ste 109 Tucson AZ 85716 T 520-327-4454 F 520-327-1271 info@allenandyoung.com www.allenandyoung.com
  7. 7. Final Thoughts about Veterinary Practices: • In economic times like these, many buyers look to stable businesses. The risk in buying a Veterinary Clinic is low, and loan default rates are historically low. Up to 100% financing can be found. • The market for Veterinary Practices appears to be declining, as fewer young doctors want to own. • As many baby boomers retire, a growing number of practices will come on the market; those that are profitable, multi-doctor practices with upgraded facilities will be the most sought after. • Some states now permit non-Veterinarian owners to own practices, as long as a licensed Veterinarian operates the clinic. • An excellent resource can be found at www.avma.org, a Web site maintained by the American Veterinary Medical Association © 2010 Allen & Young Business Brokerage LLC 2500 N Tucson Blvd Ste 109 Tucson AZ 85716 T 520-327-4454 F 520-327-1271 info@allenandyoung.com www.allenandyoung.com

×