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How Does the Veterinary Practice Valuation Work?
Are you a veterinary professional at a crossroads, contemplating retirement, an exit strategy, or the sale or purchase of a practice? The journey begins with understanding the world of veterinary practice valuation.
In this blog post, we’ll take a deeper dive into the steps involved in the valuation process, shedding light on how PS Broker’s Certified Valuation Analyst can guide you through these key components.
Preliminary Background Information
Before meticulously examining financial documents, the valuation process starts with gathering essential background information. PS Broker’s Certified Valuation Analyst seeks general details such as the practice’s name, location, establishment date, and the breakdown of income sources (small animal, large animal, mixed, or other). Knowing the structure of your practice—whether you’re a solo practitioner or have associate doctors—is also vital.
Further, non-compete agreements with associates, real estate ownership or lease terms, facility size, and potential expansion opportunities form the groundwork for a comprehensive valuation. Details regarding major equipment, their financial aspects (leased or financed), recent real estate appraisals, and the presence of competitors in your practice area contribute to a more nuanced understanding.
Documents and the Financial Insights
With the preliminary information in hand, the valuation process moves into the financials. A PS Broker analyst will require an in-depth review of the last three fiscal years of practice tax returns, profit and loss statements, period total reports, and a year-to-date gross income comparison. The income production summary report becomes a key player, offering insights into income distribution across various services like vaccines, surgeries, office visits, medications, and lab services.
To complete the financial picture, the analyst scrutinizes W-2s and 1099s for associate and relief doctors, an employee list with wages and benefits, equipment lists, and copies of equipment contracts or leases. When it comes to the real estate, details on the asking price and current facility lease terms become integral to the valuation.
Why Choose PS Broker for Your Veterinary Practice Valuation?
PS Broker stands out in the area of veterinary practice valuation for several compelling reasons:
- Certified Valuation Analyst Expertise: Bringing specialized knowledge to the forefront, PS Broker’s Certified Valuation Analyst is dedicated to evaluating veterinary practices.
- Comprehensive Analysis: The valuation process at PS Broker involves an in-depth telephone conference, a detailed written summary, and a financial spreadsheet. This approach ensures that every facet of your practice is thoroughly assessed.
- Industry Recognition: Renowned for accuracy and reliability, our valuations provide a solid foundation for critical decision-making.
In conclusion, navigating the veterinary practice valuation demands understanding your practice’s operational and financial aspects. PS Broker not only unravels the complexities but also provides a reliable and realistic valuation aligned with industry standards. Trust in a valuation service that recognizes the unique dynamics of veterinary practices, ensuring you’re well-equipped to make informed decisions for the future.