Welcome to Innovetive Petcare
 
Innovetive Petcare owns and operates veterinary hospitals across the country. Our clinics benefit from tools, resources, and a great support team dedicated to helping veterinary practices prosper and grow. We believe that veterinarians should be able to pursue their passion for veterinary care without sacrificing a healthy work-life balance. When you utilize our best-in-class tools, financial resources and support team, you’ll be able to focus on providing quality pet healthcare and customer service... and have the opportunity to spend more time with family, friends and other interests outside of work!
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INNOVETIVE PETCARE
IMPROVING THE LIVES OF PETS AND PEOPLE
Welcome to Innovetive Petcare
 
Innovetive Petcare owns and operates veterinary hospitals across the country. Our clinics benefit from tools, resources, and a great support team dedicated to helping veterinary practices prosper and grow. We believe that veterinarians should be able to pursue their passion for veterinary care without sacrificing a healthy work-life balance. When you utilize our best-in-class tools, financial resources and support team, you’ll be able to focus on providing quality pet healthcare and customer service... and have the opportunity to spend more time with family, friends and other interests outside of work!

Ever wanted to do something else with your life?

Career Change

Hospital owners who manage a veterinary practice for a decade or more demonstrate unquestionable dedication to their calling. Still, at some point, many feel a subtle yearning to do meaningful work in a different vocation. The result is a tension between that thought and the resolve to remain true to a life of serving people and animals.

Career changes for veterinarians are a growing trend
In fact, Dr. Valerie E. Ragan, Director of the Center for Public and Corporate Veterinary Medicine at the Virginia- Maryland College of Veterinary Medicine, provides workshops and other resources for veterinarians who are thinking of a career change. In a recent AVMA article*, she states, “We get a lot of contact from veterinarians who are looking into doing something different, but they still want to be veterinarians, and they don’t have any idea what’s out there or where to start.” She goes on to say, “Another group is veterinarians who have been in practice 25 years or longer and want to do something different for fun, to give back, or to travel.”

Practice owners face two significant obstacles

Time Constraints
Veterinarians in practices today wear many hats as clinicians. Clients expect general practitioners to have extensive knowledge about numerous species and breeds along with expertise in every clinical discipline from radiology to nutrition.

Practice owners carry the additional demands of managing a veterinary business in a changing economic climate.

One survey conducted by the National Commission of Veterinary Economic Issues reported, “… owner vets spent an average of 18 hours per week on practice management tasks”

Freedom to Explore
Unrestricted time and money are two essential ingredients for a lifestyle of freedom.

Many practice owners maintain large non-liquid equity, but don’t know their options for tapping into that wealth.

So, what are some options?

  • Spending a lot of time and cash finding a good practice manager could solve the time factor, but not the non-liquid equity.
  • Sell your practice and take the leap to another endeavor that may or may not work out well.
  • Delay a change until you’re older and, hopefully, in a better financial position.

What if you could free up time and cash while practicing your way in your hospital?

• Would you spend more time with family?
• Would you volunteer for a cause you care about?
• Would you explore ways to work part-time at home and build something to carry on after retirement?
• Would you like to fill in the blank?

Good news: many of your colleagues have found a way to gain that kind of freedom with the help of a corporate buyer.

  • Diversify your assets by investing your equity in whatever way suits your situation.
  • Create time in your life. Leave inventory management, staff training, payroll, accounting, marketing and all that business stuff to business professionals.
  • Fulfill your number one calling. Focus more than ever on practicing quality medicine.
  • Reduce staff turnover. Less stress means a happier office culture, and reduced potential for burnout.
  • Discover new interests. Expand your possibilities.
  • Release some creativity in your life.
  • Leverage the power of a qualified team of management experts and eliminate anxiety about the future.

Conclusion
Maybe the thought of doing something different with your untapped skills and wisdom has been lurking in the back of your mind for a while. Maybe you’d like to explore a little more deeply what the possibilities are for you. There’s really nothing to lose by taking a look at becoming a corporate-owned hospital. But, there could be a lot to miss by putting it off.

About Innovetive Petcare
Innovetive Petcare owns and operates veterinary hospitals. Our clinics have access to benefits like:

  • Effective management tools and resources.
  • Ongoing support from a strong support team dedicated to helping veterinary practices grow and prosper.

Our philosophy is to run a great business so veterinarians and their staff can:

  • Provide exceptional patient care.
  • Enjoy a healthier work-life balance.
  • Grow professionally through ongoing training and career development.

If you are interested in discussing the potential sale of your clinic, or would like more information about Innovetive Petcare and the benefits we provide our hospitals, visit www.innovetivepetcare.com or call us today at 800-210-3695.

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Are You Waiting Too Long to Sell Your Practice?

Waiting Too Long To Sell

Selling your veterinary practice may be the most important financial decision you make in your professional life. While many factors are involved in a decision to sell, one frequently gets overlooked: timing.

Is there a “best time” to sell?
Maximizing sale value is usually near the top of every owner’s list. So how do you pinpoint the “best time” to sell to command the best price for your business? The first step is to understand the components that influence valuation – as well as the extent to which you may be able to leverage them to your advantage. These variables include:

  1. The current economic environment and dynamics of the veterinary industry;
  2. The current conditions of capital markets; and
  3. The performance of the practice.

Keep in mind that factors outside your control, like current economic and capital market conditions, may have as large a bearing as more controllable factors, such as revenues or profits, on how the sale turns out.

We are currently in a “seller’s market”
Today’s economic environment of historically low interest rates and readily available capital makes it relatively easy and affordable for buyers to purchase clinics. Add to this mix another favorable dynamic: increased demand for clinics by corporate buyers. The result? Healthy valuations for some veterinary clinics.

However, like any trend, market cycles can and will change. If history is any guide, changes, when they occur, often happen without warning.

An increase in interest rates, tightening of the money supply, or downturn in the economy could have a strong negative impact on a clinic’s valuation. These variables all are outside a business owner’s control.

How to seize the “window” of opportunity
There are ways to help protect a business from value-influencing factors outside your control. Planning ahead to provide a window of opportunity to time the sale is one such management tool.

For instance, if you know you would like to retire or need liquidity in five years, now is the time to start positioning your clinic for sale and making any necessary improvements to the practice. At the two- to three-year mark, if things are going well, and you are able to obtain a good price for your business, you can sell a little early. Conversely, if the economy or business has hit a rough patch, you still have several more years until your original target date to ride out the down cycle and/or make additional improvements to the clinic. But if you wait until close to the five-year mark to start the sales process, you lose the flexibility to adapt to business cycle swings or unexpected events.

Recognizing common delay reasons for delaying
Owners may delay the sale of their practice for any number of reasons. Common ones we hear include:

  • I’m too busy running my practice. I don’t have time to think about selling!
  • I’ve made substantial investments in my practice. I want to wait to sell until after I realize the full value of those investments.
  • My practice is going gangbusters! Let’s talk about selling when growth starts to plateau.
  • I need to focus on some things that I am doing to make this practice more appealing to buyers before I sell.
  • I don’t know the first thing about selling my practice.

These reasons all are understandable. However, since we know that delaying a potential sale may have a significant negative impact to the seller, let’s look further at each potential reason for delaying a sale:

“I’m too busy running my practice. I don’t have time to think about selling!”
An experienced corporate buyer understands the demands on a practice owner’s time and has the experienced team available to assist the seller at each step of the way without placing additional burdens on an already strained schedule.  You want a partner in the process…a buyer willing to invest time and resources to guide you through the process, not only shouldering the workload, but also sharing information and advice along the way.  Even if a practice owner chooses not to sell, he or she will gain valuation information about the value of their clinic, how potential buyers value practices, and steps to take to increase the value should they choose to sell at a later time.

“I’ve made substantial investments in my practice. I want to wait to sell until after I realize the full value of those investments.”
An experienced buyer can tell the difference between clinics that continually re-invest in the practice and those that don’t…and places a higher value on clinics that have invested for future growth.  Keep in mind that a buyer is looking for a clinic that is positioned to continue growing in the future.  If you have been making investments in your clinic, that benefits you when it is time to sell.

“My practice is going gangbusters! Let’s talk about selling when growth starts to plateau.”
A potential buyer wants a clinic that is both doing well today and has the opportunity to continue growing and do well in the future. A clinic with a history of growth that can demonstrate a strong likelihood of continued growth will command a higher price than a clinic whose revenue is flat or declining. Therefore, waiting to sell until your clinic has peaked is not a good strategy for maximizing its sale price.

“I need to focus on some things that I am doing to make this practice more appealing to buyers before I sell.”
Sometimes it does take some work to position a clinic to sell for the best possible value.  However, frequently we find that practice owners do not fully understand what potential buyers value most in a potential sale and consequently focus on the wrong items.  If you are considering a sale, speaking to an experienced buyer now can help learn the value of your clinic today, issues that may need to be addressed, and where to prioritize your time and efforts.

“I don’t know the first thing about selling my practice.”
Most veterinarians sell a practice at most once in their career, so the experience can be new and intimidating.  You want to find a potential buyer that will be a partner in the process and willing to invest time educating you on the process and all of your options. The right buyer will have deep experience in helping practice owners with evaluating their options, completing transactions, and successfully handling post-sale transitions.

Conclusion
Ultimately, it is nearly impossible to predict the “best” time to sell, especially since only some factors that influence price are within an owner’s control. But taking steps to prepare for sale by planning ahead ultimately provides significant upside flexibility – especially if you run a strong, growing practice. Start a dialogue now to discover the value of your clinic. And, if you are able to obtain a good price, weigh the trade-offs of selling now versus the risks of unfavorable market changes that may cause you to miss your opportunity to get the most for your business.

 

About Innovetive Petcare
Innovetive Petcare owns and operates veterinary hospitals.  Our clinics benefit from tools, resources, and a great support team dedicated to helping veterinary practices prosper and grow.

 

Our philosophy is to run a great business so veterinarians can focus on providing exceptional patient care.  We want veterinarians and their staff to enjoy a better life, with more work-life balance, a strong supportive community, and ongoing training and career development.

If you are interested in discussing the potential sale of your clinic, or would like more information about Innovetive Petcare and the benefits we provide our hospitals, visit www.innovetivepetcare.com or call us today at 800-210-3695.

 

 

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Not All Buyers Are Created Equal

Charles Darwin once wrote, “It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.” In the rapidly evolving business of veterinary medicine, as practice owners struggle to juggle work-life balance, training and career development, clinical practice, and business management, it does seem that the law of survival of the fittest applies.

Enlisting the support of a corporate buyer to meet the demands is an attractive option, but how do you know which buyer to work with?  While there is the typical list of demands (fair valuation, option to purchase or lease real estate, cash at closing, strong team support and financial backing), we’ve curated an additional checklist for savvy practice owners to use when filtering their choices:

Personalized Approach
Determining the value of what you do is not a simple equation: every veterinary practice is different. Look for a corporate buyer that offers a customized approach to not only acquisition, but also improving practice operations. You want a personal consultation and a comprehensive evaluation of your operations, as well as a customized plan and guidance for the implementation of strategies that are specifically designed to improve performance at your hospital.

Local Medical Standards
What works well for a 5 doctor practice in Bloomington, Illinois might not work well for a single doctor practice in Malibu, California.  Veterinary medicine is best practiced when local veterinarians craft their own hospital and community specific strategies for high quality patient care. Avoid corporate buyers that utilize a single standardized national plan or formulary.

Focus on Revenue Growth and Increased Efficiency, not Cutting Costs
When your practice is operating at its best, clients and employees are happier, patients receive better care and your bottom line thrives. Choose a corporate buyer that can demonstrate a broad range of proven operational consulting services to the veterinary industry that are proven to grow revenue, including:

  • General and specialty practice management training and mentorship
  • Inventory management assistance
  • Fee schedule review
  • Marketing program development
  • Doctor production analysis
  • Staff training and development
  • Human resources management and recruiting services
  • IT support consultation

Commitment to Uphold the Values and Culture of the Clinic
You did not spend your career building a practice that is going to be radically changed once you sell it. Your hospital means the world to you. It’s been your life’s work and a labor of love.  Choose a corporate buyer who will honor the values and culture of your clinic that are beneficially to the pets, the clients, and the staff. Look for a corporate buyer, like Innovetive Petcare, that works with veterinarian owners who want to continue running the medical side of their practices, but want help with the day-to-day administrative and team management tasks. Enlist a corporate buyer that will help you create a long-term strategy and a sustainable way for your practice to continue thriving — well into the future.  The relationship should feel natural and should uphold the values that you built into your practice, and also should allow you more time, more money, and the ability to focus on what you love the most.

About Innovetive Petcare
Innovetive Petcare owns and operates veterinary hospitals.  Our clinics benefit from tools, resources, and a great support team dedicated to helping veterinary practices prosper and grow.

Our philosophy is to run a great business so veterinarians can focus on providing exceptional patient care.  We want veterinarians and their staff to enjoy a better life, with more work-life balance, a strong supportive community, and ongoing training and career development.

If you are interested in discussing the potential sale of your clinic, or would like more information about Innovetive Petcare and the benefits we provide our hospitals, visit www.innovetivepetcare.com or call us today at 800-210-3695.

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Innovetive Petcare Acquires Chattanooga Emergency Pet Hospital

Austin, Texas — August 19, 2015: Innovetive Petcare, Inc., today announced that it has acquired Chattanooga Emergency Pet Hospital (CEPH), an after-hours emergency veterinary hospital in Chattanooga, Tenn.

CEPH was founded by Tag Thompson, a local entrepreneur with extensive experience in veterinary medicine.  Mr. Thompson will remain on with Innovetive Petcare.  “I am excited to become part of the Innovetive Petcare team,” said Mr. Thompson.  “Innovetive Petcare’s resources will allow us to offer additional services to the referring veterinarians and pet owners in our community.”

CEPH will expand from an emergency-only hospital to a full specialty center that provides veterinary surgery, oncology, internal medicine, avian/exotic and other specialty services.  As part of the expansion of services, the hospital is being rebranded “Animal Emergency & Specialty Center of Chattanooga”.

“We are excited to build on the success of Innovetive Petcare’s Knoxville, TN, specialty center.  CEPH is a growing emergency practice and great entry point for us to bring a broader range of specialty services to Chattanooga,” said Mark Ziller, President & CEO.

Innovetive Petcare seeks to acquire other general practice and specialty/emergency veterinary as it continues to build the nations premier family of veterinary hospitals.

About Innovetive Petcare
Innovetive Petcare owns and operates veterinary hospitals.  Our clinics benefit from tools, resources, and a great support team dedicated to helping veterinary practices prosper and grow.

Our philosophy is to run a great business so veterinarians can focus on providing exceptional patient care.  We want veterinarians and their staff to enjoy a better life, with more work-life balance, a strong supportive community, and ongoing training and career development.  For more information, please visit www.innovetivepetcare.com

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Top 7 Advantages of Working With A Corporate Group

In the past several decades the United States has experienced an upward-trend of corporate acquisition of private veterinary practices, and there is good reason for this trajectory. The advantages of a corporate buyer include capital, business know-how and strong support teams, and bring great value to the practice of veterinary medicine. Here are 7 other advantages of working with a corporate buyer that you may not have considered.

  1. Improved Marketing

Corporate buyers assess a clinic’s current marketing programs and implement improvements, if necessary. Corporate buyers can introduce new programs to grow patient visits, profitability per visit, and overall revenue per visit. One such way corporate buyers do this is by improving patient compliance with wellness services, such as annual exams, parasite prevention, dentistry, and other wellness procedures.  Corporate buyers have marketing teams in place to help you turn your ideas into reality.

  1. Accounting Support

More likely than not, the reason you went into veterinary medicine was to practice medicine, not become a bookkeeper. Corporate buyers have an accounting team to manage these tasks for you and start important record-keeping processes. In addition, corporate buyers handle accounts payable, revenue reporting, check writing, cash reconciliation tasks, and financial statement preparation, all critical to keep any practice running smoothly.

  1. Human Resources

Corporate buyers further free veterinarians up to practice by managing human resources. Corporate buyers offer a comprehensive benefits package and excellent salaries.  They have a team of HR professionals to assist with recruiting, hiring and retaining staff.  Corporate buyers handle payroll and benefits so you don’t have to.

  1. Assistance with Day-to-Day Operations

Corporate buyers support local practices by assisting the staff with inventory management, examining new ways to improve ordering to make sure inventory is adequate but not expiring, and providing cost-of-goods reporting to make sure that product is moving. Many practices have had the headache of running out of flea and tick preventive, or the opposite, carrying too much inventory on the shelves. Corporate buyers can help practices get a better handle on the inventory and also assist with vendor contracting to ensure that the practice gets the best price possible on inventory.

  1. Financial Resources and Easy Transactions

When you want to sell, a corporate buyer is able to offer cash for the practice. In addition, corporate buyers can also acquire clinic real estate when the owner wants to sell it as part of a transaction. Furthermore, corporate buyers have the financial resources to invest in the long term growth, success and health of the clinic long after the acquisition is done.

  1. Flexibility and Experience

Corporate buyers are in the business of purchasing veterinary hospitals quickly and efficiently, and this includes successfully integrating the staff, including the selling veterinarian, who is welcomes to stay on. In contrast, veterinarians (other than current associates) who purchase a practice are generally replacing the selling veterinarian. Changes to staff, if any, are discussed prior to closing, and corporate buyers make every attempt to maintain continuity throughout the client experience.

7. Access to a Wider Team and Knowledge Base

Corporate buyers believe in creating a strong veterinary community with shared values, and have multiple clinics with a community of veterinarians and staff that share ideas. Sharing best practices and learning from each other contribute to long-term success of the clinic and growth of the staff.

 

About Innovetive Petcare
Innovetive Petcare owns and operates veterinary hospitals.  Our clinics benefit from tools, resources, and a great support team dedicated to helping veterinary practices prosper and grow.

Our philosophy is to run a great business so veterinarians can focus on providing exceptional patient care.  We want veterinarians and their staff to enjoy a better life, with more work-life balance, a strong supportive community, and ongoing training and career development.

If you are interested in discussing the potential sale of your clinic, or would like more information about Innovetive Petcare and the benefits we provide our hospitals, visit www.innovetivepetcare.com or call us today at 800-210-3695.

 

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Innovetive Petcare Featured in Vet-Advantage Magazine

 

Innovetive Petcare was featured in the August 2015 issue of Vet-Advantage magazine.  Below is an excerpt from the article:

Innovative Petcare
Innovetive Petcare is focused on creating the nation’s premier network of veterinary specialty and emergency hospitals, says Mark Ziller, president and CEO. “Since we launched at the end of January, we have already successfully completed our first acquisition and we now have additional clinics going through due diligence. We are getting a very positive response from practice owners and we are pleased with our progress so far.

“Ownership allows us to invest in clinics and have a long-term vision – two things not possible in a management services model,” he continues. “Since that is a fundamental part of our value creation model, we do not offer standalone management services.”

That approach means that Innovetive is focused primarily on veterinary practices of three or more doctors, says Ziller. “We don’t want to just acquire practices, we want to invest in them, and bring them the tools they need to grow. And that necessitates practices of a certain size.”

Another fundamental part of the Innovetive strategy is to ensure that each of its clinics maintains its local identity, name and culture. “We support the veterinarians and their staffs with a suite of best-in-class business services in such areas as human resources, marketing, finance and accounting. We do not rebrand the clinics as ‘Innovetive Petcare,’ nor do we implement any type of national formulary.”

Innovetive has chosen to focus on specialty and emergency hospitals for several reasons, not the least of which are rising expectations on the part of pet owners regarding standards of care, says Ziller. “We love our pets. People want to know that if their dog gets cancer, they can take him to a specialist to receive the best possible care. And we see that continuing.”

 The long haul
Innovetive is not seeking to create value simply by aggregating revenue or cutting costs, says Ziller. “Our goal is to effectively use capital and scale to invest in practices and help achieve long-term, sustainable growth. We partner with the veterinarians and staff at each local hospital to develop and implement a growth plan, and we invest in the tools and resources to help them achieve their goals.

“Our goal is to build a great business, with a strong culture and resources to help clinics grow and prosper. We believe it is more important what we build than how big we build it. The response from veterinarians has been very positive, and we anticipate strong growth, but our focus will remain on quality over quantity.

“Yes, we want to run an efficient business. But the bigger opportunity in our mind is the opportunity to grow, and we’re prepared to invest and take a long-range view of that. With a focus on growth, our goals align well with both manufacturers and distributors, allowing us a great opportunity to partner with like-minded companies.

 

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AESC Participates in Clinical Trial of New Canine Lymphoma Drug

Animal Emergency & Specialty Center has been selected to participate in the clinical trial of Aratana Therapeutic’s new canine lymphoma drug. AESC is the only hospital in the region selected to participate in the clinical trial. AESC’s oncology department is headed by Dr. Jeffrey Phillips, DVM, MSpVM, Ph.D., DACVIM, who is heading the trial.

Cancer is a devastating disease not only for humans but also for pets, and more advanced therapies are needed to manage the disease in pets. The following is just a brief snapshot of the need to help fight one type of cancer, lymphoma in dogs. Unfortunately, several common breeds are predisposed to lymphoma cancers, including Golden Retriever, Labrador Retriever, German Shepherd, Poodle, Boxer, Scottish Terrier, Bassett Hound and Airedale.

  • Current estimates indicate there are 83.3 million owned dogs in the United States.
  • Cancer is on the rise as pets are living longer, and the incidence rate of cancer increases with age.
  • Approximately 1 in 4 dogs will be diagnosed with cancer at some point in their life.
  • Currently, pet cancer treatment options are primarily treated with human medicines which have not been specifically approved in pets.
  • Lymphoma is one of the most common cancers in dogs. It is most commonly treated with chemotherapy, which can be associated with serious negative side effects. Our monoclonal antibodies bring new treatment options that have been shown to be valuable in human medicine.
  • In the United States, approximately 7% of all cancers in dogs annually are diagnosed as lymphoma.

Aratana Clinical Trial
Canine Lymphoma Monoclonal Antibodies are a new therapeutic solution for this disease in dogs.
The Monoclonal Antibody therapies developed by Aratana are currently being used by specialists under a conditional license based on USDA requirements for demonstration of safety and reasonable expectation of efficacy. Additional clinical studies are in progress to further support the safety and efficacy of this new therapeutic option.

What are Monoclonal Antibodies?
Therapeutic Monoclonal Antibodies are designed to specifically target cancer in dogs using molecular biological tools to be species-specific antibodies that bind to specific target cell-surface antigens. These antibodies target the specific antigen, and are designed to work specifically in humans, dogs or cats. Lymphoma Monoclonal Antibodies are designed to specifically bind with an antigen on lymphoma cells, and stimulate the dog’s immune system to target and deplete these lymphoma cells from the body.

About Animal Emergency & Specialty Center
Animal Emergency & Specialty Center is East Tennessee’s premier veterinary emergency & specialty hospital. Located in Knoxville, we provide veterinary specialty services to pet owners throughout Tennessee and neighboring states. Our staff of board-certified veterinary specialists bring a wide variety of experience in many different treatment areas. Our veterinarians are board certified or have advanced experience and training in areas of emergency and critical care, internal medicine, surgery, oncology, ophthalmology and avian & exotic medicine. For more information, visit www.animalERspecialty.com.

About Aratana Therapeutics
Providing veterinarians with new therapies that are driven by science and specifically made for pets, was the inspiration behind Aratana Therapeutics. We believe pets are family, and they deserve equal care.For more information, visit www.aratana.com.

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How Does Debt Impact Clinic Valuations?

Veterinary clinics are usually sold on a “debt-free” basis, meaning that when a clinic is sold, at a minimum any interest-bearing debt (such as bank loans, credit cards and capital leases) is deducted from the selling price.

Example:
A clinic is valued at $1,500,000 and has $300,000 of debt. The net proceeds to the seller would be $1,500,000 – $300,000 = $1,200,000.

Does this mean that taking on debt is a bad idea for practice owners? Not necessarily.

Taking on debt to finance growth can be a very good investment. For instance, a lease for new equipment that generates increased revenue and profits might result in a higher sales price and net the seller more money even after deducting the remaining debt. Remember that clinics are generally valued at a multiple of earnings, so investing in equipment that produces $20,000 of additional profit per year will yield several times that much in increased value to the clinic.

It is important to continually re-invest in updated medical and office equipment. However, prioritize revenue-producing equipment over non-revenue-producing assets. For example, a new surgical laser that will generate new procedures (and additional revenue) is a better investment than, say, new TV’s in the waiting room.

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Myths and Misconceptions about Clinic Valuations

Until the mid-1990’s, it was common for veterinary practices to be valued according to their revenue. One often-cited approach was to value a clinic using a multiple of revenue, such as 75% or 100% of revenue. For example, a clinic with $1,200,000 of revenue valued at 100% of revenue would have sold for $1,200,000.

However, this valuation method has fallen out of favor and has not been used in some time. Why is that?

Imagine three clinics with identical revenues but different profitability:

• Clinic A has $1,000,000 of revenue and is generating a $50,000 loss
• Clinic B has $1,000,000 of revenue and is generating a $100,000 profit
• Clinic C has $1,000,000 of revenue and is generating a $250,000 profit

Would you pay the same amount for all three clinics? Probably not. A buyer –whether another veterinarian or a corporate group – ultimately needs to pay back his original investment. The clinic’s profits, not its revenue, enable that to happen.

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When is the best time to sell?

Even with the benefit of hindsight it might not be possible to known exactly when the best time to sell would have been – and certainly none of us has a crystal ball to know the perfect future time to sell. However, we can offer some general suggestions about timing that may help practice owners.

In general, the best time to sell is when:

  • The business is doing well. Potential buyers want to purchase a clinic that is profitable, that is growing, and that has the potential for continued future growth.
  • The economy is healthy. A healthy economy makes buyers more confident about the future and makes it easier for them to obtain financing.

Practice owners may own a clinic 20, 30, 40 years or longer. Businesses rarely have consistent growth and profitability over these long periods of time – they experience ups and downs just like the economy overall.

Since you want to sell your practice when it is doing well, and since the health of your business may fluctuate over time due to many factors, plan ahead to allow flexibility on when to sell.

If you have a firm date when you want to retire or will need money, waiting to sell your practice until you reach that point does not leave flexibility to adapt to business cycles or unexpected events. A better approach is to plan ahead and give yourself a window of opportunity to time a sale. For instance, if you would like to retire in five years, now is the time to start positioning your clinic for sale and start making any necessary changes and improvements. At the two- to three-year mark, if things are going well and you are able to obtain a good price for your business, you can sell a little early; however, if the business or economy has turned unfavorable, you still have several more years until your original target date to ride out the business cycle or make additional changes to the clinic.

Some owners want to sell their practice but continue working; others want to sell and retire. Openly discuss your goals and be flexible to provide potential buyers with an adequate period for a smooth transition.

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