Practice Valuation for Practice Sale
Are you contemplating a partial or complete purchase of an existing veterinary practice?
In many cases, the asking price of the business has been set by the current owner or by a broker who stands to profit from the sale of the business. Therefore, it is critical that you have the value of the business determined by an impartial third party. This is where Summit Veterinary Advisors can help.
Our accredited valuation analysts abide by the standards of the National Association of Certified Valuators & Analysts (NACVA), the Institute of Business Appraisers (IBA) and the American Institute of Certified Public Accountants (AICPA). These standards require us to perform an in-depth analysis of the business in order to determine the most reasonable and unbiased opinion of value possible.
Our valuation process includes a detailed analysis of the historical financial performance of the business as well as a wide variety of factors that can impact the long-term financial success of a veterinary practice.
Factors considered include:
- Location and quality of the facility;
- Local demographics;
- Competition in the practice area;
- Quality of the staff and the management systems in place;
- Long-term stability of the practice;
- Quality of the existing lease;
- Service/product mix, and many more.
Our reports not only give you our fair and unbiased opinion of value, they give you a much better understanding of the business you want to purchase.
Questions? Call or Click here to get started now.
Affordability Analysis for Buyers
It is the seller’s responsibility to set an asking price for the veterinary practice. As a buyer, your job is to determine if the asking price is worth the reward that ownership provides.
Summit has a strong reputation for practice valuation; however, a full valuation is more than a buyer really needs in order to make a decision. Instead, we conduct a Summit Affordability Analysis based on historical information from the practice and on the factors that will likely change once you become the owner of the business.
If you are buying a piece of a veterinary practice, it’s possible that very little will change. The current owner or owners will likely continue to draw salaries similar to what they do now, keep the same benefits, and operations will continue as usual.
If you own a minority share, you may not have an opportunity to implement many organizational changes. Our review will ensure that the seller’s valuation reflects that fact in the asking price. If it does not, we will give you specific points to negotiate a reasonable reduction of the list price.
When you purchase 100% of a veterinary practice, you may have the opportunity to quickly make many changes to the operations. We will help you consider your budget and proposed changes in order to determine whether payment of the asking price leaves room for you to invest in the equipment or other improvements you desire. This helps you to avoid paying the seller now for the future growth opportunities that you will create.
In addition to analyzing the asking price, Summit’s Affordability Analysis will identify areas that may need more research, such as exploring facility lease terms and determining reasonable compensation for a seller who will exit the practice in the next few months. The fewer surprises in store when you become a practice owner, the better!
Questions? Call or Click here to get started now.
Profitability Assessment & Improvement
Do you have enough money to buy the anesthesia monitor you have had your eye on?
Can you afford to give your staff a raise?
Are your associate doctors producing appropriately to pay for themselves?
If you have asked yourself any or all of these questions, it’s time for an outside look at practice profitability.
Summit’s Profitability Assessment includes a review of revenue sources, key expenses such as drug and supply costs, staff salaries, and rent, plus an evaluation of each doctor’s production compared to their compensation.
Why do we look at production by doctor?
Because revenue generation per veterinarian is a significant predictor of practice profitability, meaning practices with higher revenue per veterinarian are generally more profitable.
While doctor production is important, it isn’t the only key to profitability. We take a comprehensive look at all the numbers to identify the practice’s strong points, where you can make quick adjustments and those areas that will improve over time with the proper attention.
Improving the profitability of your practice is one of the surest ways to increase the value when you are ready to sell all or a portion of your business. Whether your practice is very profitable, not profitable at all or somewhere in between, we’ll give you specific recommendations for improvement.
At Summit Veterinary Advisors, we don’t take a cookie cutter approach to your business. Our recommendations are based on practical experience and are tailored to suit your veterinary practice.
Questions? Call or Click here to get started now.
Budgets and Spending Plans
For many people, the word “budget” brings to mind strict spending limits, and concern for the future. At Summit, we believe that budgets are less about restricting spending and more about investing wisely to promote business growth.
A well-planned budget is a powerful planning tool. Think of it as a master spending plan or your practice’s customized decision-making guide. A budget helps you see future commitments so you know whether you can spend that “extra” cash now, or keep it to cover upcoming expenses.
A budget is also a great way to open a discussion among business partners about practice goals and what it will take to achieve them. Without a budget, you run the risk of overspending or failing to invest enough to grow your practice.
Summit will help you create a budget to:
- Align your spending with industry standards, where appropriate;
- Define goals and measure progress toward achieving them;
- Keep the right amount of cash on hand;
- Build up an emergency fund;
- Plan for short-term borrowing, if needed;
- Identify and address potential problems before they arise.
Learn more by contacting us today.
QuickBooks Set Up and Training
Summit experts encourage veterinarians and veterinary practice managers to use QuickBooks Pro in-house accounting software to manage their finances. Too often, veterinarians and managers are frustrated in the financial planning process because they must rely upon third party accountants to provide valuable financial reports in a timely fashion. When you handle your financial records within your office, you have faster access to financial data and control over the accounting process.
QuickBooks Pro is user-friendly, and easy to learn with no accounting degree required. System reports are simple to create and meaningful, which means taking your financial pulse no longer requires you to wait for reports from an accountant. Timely information helps you identify and respond to changes immediately, keeping you nimble and up to date with your business trends.
We have a certified QuickBooks Pro Advisor on staff to help you with everything from the initial setup and training to troubleshooting.
Summit can help you:
- Set up your chart of accounts according to AAHA or AAEP;
- Understand which numbers are most important to track and why;
- Establish policy for consistent recording of all financial transactions, including deposits, bills and payroll information;
- Understand what reports will help you assess the financial health of your veterinary practice and how to interpret them;
- Determine the difference between assets and equity;
- Provide recommendations and give you tips on protecting your assets.
The proper setup of your accounting systems ensures that you can extract the most meaningful information when you need it, and it helps you to compare your practice results with industry standards. In short, we’ll put you in control of your finances.
Questions? Call or Click here to get started now.
Practice Forecasts
When opening a veterinary practice of your own, it is typical to have more questions than answers. Let Summit help you turn your plans into reality and steer you toward success.
The investment required to start a veterinary practice can be daunting. Summit is uniquely equipped to help you evaluate your risks and address the issues related to establishing a business.
Our years of industry experience have given us critical insight into veterinary practice start up. Summit team members have gone through this process personally, and we have helped countless others do so as well. We’ll help you assess the financial risks and rewards involved while guiding you through the related business decisions that you will face.
Summit’s forecasts will:
- Provide objective advice that will help you evaluate the financial risks compared to potential rewards;
- Help you understand the pros and cons of your decision relative to the amount of investment required;
- Prepare a worse-case analysis to help you identify potential weak points and assess your tolerance for the risk;
- Deliver the basic financial information for your business plan, as required by lenders;
- Strengthen your overall business plan and support your loan applications
- Create the foundation for your prospective three-year operating budget. This comprehensive spending plan is the single most important tool in helping to ensure the success of your practice.
Questions? Call or Click here to get started now.
Practice Valuation for Strategic Planning
Are you contemplating the sale of your business? Whether you hope to sell a portion of your veterinary practice to an current associate or you’d like to exit the practice, Summit is ideally positioned to help you through this process.
Our in-depth analysis of your business will help you understand the current value of your veterinary practice. If the value is not where you would like it to be, we can help you understand how to make changes to meet your valuation goals.
The unbiased nature of our analysis combined with the expertise and credentials of our analysts and the completeness and transparency of our report conclusions will give you a result that both you and a potential buyer can trust. This is critical, because the value of a business is ultimately decided in the market. The money you invest in analysis will help you establish a fair asking price, which means that you can reasonably plan for your future.
Questions? Call or Click here to get started now.
Human Resources
The people on your veterinary team, including doctors, managers, veterinary technicians, and support staff are key to delivering quality patient care and client satisfaction.
Summit is an industry leader in all aspects of Human Resources. We specialize in helping veterinary practices motivate their team members and keep them delivering top-notch service through:
- Doctor and staff compensation evaluations
- Motivation and rewards, including budget-friendly and no-cost options
- Wage bands for the veterinary practice team
- Salary negotiations
- Practice manager coaching and development
- Personal coaching on effective leadership for practice owners or managers
Make the most of your team by calling Summit Veterinary Advisors today at 303-980-4000.