Whether you’ve found a veterinary practice for sale that looks ideal, or you’re comparing the business potential of several existing practices, you should first assess several key factors before you sign on the dotted line.
Each of these factors could affect the overall success of your new business as well as your financial future. It pays to remain objective when you do this, even if you have your heart set on a particular veterinary practice
To help, we’ve created a checklist that contains numerous questions you should consider when carrying out your evaluation. For ease of reference, we’ve divided it into the following categories:
- Finances
- Facilities
- Veterinary clients
- Staff
- Local area
- Medicine provision
- Practice marketing
1. Finances
Buying a veterinary practice is an investment, so reviewing the finances in depth before making an offer is always a first step. You’ll want some expert guidance from a professional to help. Your CPA/financial advisor can help you consider the following:
- What is the asking price? How does that compare to projected revenue?
- What is your budget? Do you have any flexibility with your budget?
- Has a practice valuation been carried out? What were the results?
- What do you find when you review the veterinary practice’s financial data:
- Tax records
- Bank statements
- Financial statements
- Patient utilization/medical records
- Legal action documentation (if any)
- Lease information
- Business plan/ projected potential revenue (if available)
- How is the practice structured? (Sole proprietorship, general proprietorship, partnership, limited liability company, corporation, etc.)
- Is real estate included in the price? If not, what are the terms of the lease agreement?
- Who prepares the practice’s financial reports?
- What percentage of overall revenue is spent on payroll?
- Is there a payroll service? Which one? What are the costs of administration?
- How many years have they been in business?
- What is the practice’s current gross revenue?
2. Facilities
Although you can usually make significant changes and improvements to the veterinary practice after purchasing, it can drive up the cost of your investment. You should consider the current condition of the building including the physical layout and state of repair. It’s good to have a clear picture of what you will need – and want – to change before acquisition. Ask yourself the following questions:
- How many examination rooms are there? Would this be sufficient for your needs?
- Are the entrances and exits wheelchair accessible and disability-friendly?
- Is there adequate parking?
- Does the building have ‘curb appeal?’
- Is there clear signage?
- Is the building in overall good repair?
- Have you seen the building maintenance records or checked for previous issues?
- What is your first impression when you enter the practice? Is it clean? Neat? Odor-free? Calm? Organized?
- How is the general layout? Is it easy to move around? Does it make sense for intake and your needs for patient care?
