Start Early: Why Three to Five Years Matters
The final three to five years before a sale are critical. This is when buyers closely examine financial performance, operations, and long-term sustainability. Early planning allows time to correct inefficiencies, improve margins, and create predictable results.
Organized, well-run veterinary practices with consistent financials typically command higher valuations. Practices that rush to market often face discounted offers, limited buyer interest, and reduced negotiating power.
Early planning should also include understanding what is needed for retirement. Consulting with a financial adviser or wealth management team helps clarify income goals, tax considerations, and timing so the sale of the practice supports long-term financial security.
Establish a Baseline Valuation
A professional valuation provides a clear picture of the current fair market value. It also identifies strengths, risks, and the key drivers that influence price.
Valuation results can serve as a roadmap for increasing EBITDA and overall practice value. Updating valuations annually allows owners to measure progress and track the impact of financial and operational improvements.
Clean Up Financials and Improve Profitability
Strong financials are essential when a veterinary practice goes to market. Buyers rely on accurate, well-prepared statements to evaluate risk and secure financing.
Financial statements, including profit-and-loss statements and balance sheets, should be consistent and properly categorized. Owners should review add-backs and nonoperational expenses to normalize EBITDA. Pricing strategies should also be evaluated to address outdated or underpriced services.
Payroll and cost-of-goods-sold ratios should align with industry benchmarks. Improved inventory controls and vendor management can uncover savings that directly improve profitability and valuation.
Strengthen Hospital Operations
Buyers are not only purchasing revenue. They are investing in systems, processes, and consistency.
Medical standards and protocols should be clearly documented and consistently followed. Workflow efficiency and the client experience should be evaluated regularly. Technology and equipment also matter, as buyers increasingly expect modern, reliable systems that support long-term operations.
Build the Right Team
Staff stability plays a significant role in practice value. Addressing staffing challenges early reduces risk and increases buyer confidence.
Owners should review associate compensation, workload balance, and mentorship needs. In some cases, an associate buy-in path may support succession planning. Training internal leaders also helps ensure continuity during ownership transitions.
Explore a Real Estate Strategy
Real estate decisions should be addressed well before a sale. Owners must determine whether they plan to sell the property with the practice, lease it back, or retain ownership as a source of retirement income.
Lease terms should be market-appropriate and buyer-friendly. A broker’s price opinion can help establish realistic expectations for property value and prevent delays during the negotiation process.
Why Financial Readiness Matters
When a veterinary practice is prepared for sale, strong financials do more than support a competitive price. They give buyers confidence and improve their ability to secure favorable financing. Accurate, well-organized records reduce friction during due diligence and help create a smoother transition for all parties involved.
Planning ahead creates flexibility. Flexibility creates leverage! Whether a transition is years away or closer than you think, a Wintrust advisor can help you start planning with confidence today.
Written by:
Jessica Pasta
DVMMatch
midwest.dvmmatch.com
Angela Baker
Vice President
Wintrust Professional Practice Group
wintrust.com/ppg
