Even if you’re not ready to sell your vet practice, it’s always important to know what your business is worth. It is important to note that “one size does not fit all” when it comes to determining veterinary practice value. In this blog post, we’ll go over a variety of approaches so you can choose the one that best matches your circumstances.
In short, valuation is a process of assessing the economic value of a business. A lot of factors contribute to the final figure; therefore, it is important to work with a certified valuation analyst who can accurately assess the value of your veterinary practice.
There are three valuation approaches we’d like to discuss:
You can value your vet practice using just one or a combination of these approaches. Let’s go through each approach individually:
Other aspects to consider before starting your valuation process include:
EBITDA shows the profitability of your business, but it also acts as proof of the ability to repay debt. EBITDA calculations are part of your bookkeeping and should be done from day one. SDE is calculated by adding EBITDA to the owner’s income and benefits.
PS Broker always recommends getting a valuation of your vet practice, even if you’re not ready to sell, so you always know where you stand.
Valuation as a business management tool helps you determine where your vet practice can improve. For example, what methods are bringing in the most clients at the least cost? With a routine valuation, you’re ahead of the game and you are able to act accordingly.
Valuation is also a must if you are planning to qualify for a loan. Also, if you have multiple business partners at your veterinary practice, valuation can help you determine each partner’s financial share.
Thinking of evaluating your practice? You are in the right place.
With over 20 years of experience, PS Broker is one of the top veterinary brokerage firms in the country, all while maintaining our distinctively boutique approach.
From analysis and practice valuation to assisting sellers and buyers as veterinary practice advisors and brokers on a national level, we have the experience and credentials that will help you step into the next stage of your veterinary business.
We will help you with veterinary practice valuation, whether you’re looking to purchase a veterinary practice, sell your own, or just do a routine check-up.