The Complete Guide to Selling a Veterinary Practice (2024)

selling vet practice

Selling a veterinary practice, clinic, or hospital involves several key steps : valuing the practicepreparing financial documentsmarketing to potential buyersnegotiating terms, and finalizing the veterinary practice sale. Important factors include your practice’s profitability, location, client base, and the terms of the sale agreement.

Tip: Keep detailed records and ensure all financial statements are up-to-date. This makes your practice more appealing to buyers and can streamline the negotiation process 

Check our recent blog post on – Tax Consequences of Selling a Veterinary Practice (2024)

What are the steps to sell a veterinary practice?

Selling your veterinary practice involves several important steps:

  1. Assess the Value: Understand the worth of your practice.
  2. Prepare Financials: Organize all your financial documents.
  3. Find a Buyer: Look for potential buyers interested in your practice.
  4. Negotiate the Sale: Work out the terms with the buyer.
  5. Complete Legal Documentation: Finalize all necessary paperwork.
 

What are the best locations for selling a veterinary practice?

  1. Northeast:
    • High demand and valuation in major cities: New York City, Boston.
    • Strong demand in suburban and surrounding areas: Philadelphia, New Jersey, Pittsburgh.
  2. West Coast:
    • High demand in key metropolitan areas: Los Angeles, San Francisco, San Diego, Seattle.
    • Growing urban demand in secondary markets: Portland, Eugene.
  3. Southwest:
    • Fast-growing markets with increasing valuations: Austin, Dallas, Houston, San Antonio, Phoenix, Tucson.
    • Significant demand in key locations: Las Vegas, Reno.
  4. Southeast:
    • Growing pet ownership trends boosting demand: Miami, Orlando, Tampa, Jacksonville, Atlanta.
    • Emerging opportunities in other areas: Savannah, Charleston, Columbia.
  5. Mid-Atlantic:
    • Strong urban and suburban demand: Philadelphia, Pittsburgh, Northern Virginia, Richmond, Baltimore, Washington, D.C.
  6. Midwest:
    • Stable economies and community ties: Chicago, Columbus, Cincinnati, Cleveland, Minneapolis-St. Paul.
    • Steady demand in key cities: Milwaukee, Madison, Detroit, Grand Rapids.
  7. Rocky Mountains:
    • Growing demand due to increasing pet ownership: Denver, Boulder, Colorado Springs, Salt Lake City, Provo.
    • Emerging markets: Billings, Missoula.
  8. South:
    • Increasing demand in major cities: Charlotte, Raleigh-Durham, Asheville, Nashville, Memphis, Knoxville.
    • Opportunities in other areas: Birmingham, Huntsville, Louisville, Lexington

Understand why partnering with Transitions Elite is the best decision for selling your veterinary practice

In today’s veterinary landscape, the role of a veterinarian is more critical than ever. While the past few years have seen pet ownership skyrocket, practicing vets know all too well that there has been no corresponding “vet boom” to help increase the amount of available care and ensure that all these new pets stay healthy.

Couple that with the wonderfully reassuring trend the industry is seeing toward a higher standard of care for pets as sought by their ever-younger and more conscientious owners, there has never been more of an urgent demand for—or simultaneously less of an available supply of—qualified veterinarians.

The effects of this boom-based imbalance have been massive and multifaceted. One the one hand, business for the veterinary practice owner is, well, booming. More animals have homes and it seems more of those homes are with caring humans who are willing to pay to keep their furry family members healthy and strong.

But what this amounts to in a stark reality for dedicated practice owners is an enormous talent and labor shortage, which quickly translates to insurmountable hours, constant administrative headaches, anxiety over elevated business risk, and a plummet in overall quality of life.

It’s immediately obvious how many vets are feeling this kind of pain when we speak with them and remind them that practicing doesn’t equal practice ownership.

Benefits of Selling a Veterinary Practice to a Corporate Entity

Selling a veterinary practice to corporate entity can offer numerous advantages. Corporations often have extensive financial resources, which can lead to a higher sale price for your practice. They provide professional management support and structured buyout options, making the transition smoother for both the seller and the practice. Additionally, corporate buyers have established processes to maintain continuity for staff and clients.

Example: Last year Dr. Angie, who sold her practice to a corporate entity. Not only did she receive a competitive offer, but he also found relief knowing his long-term staff would be retained, and the quality of care for his clients would be maintained.

 

In this article, we’re going to take a unique look at how Private Equity sales offer a unique vehicle to increased lifetime earnings specifically for younger practice owners.

Article Contents

  • Why Young Vets Should Consider Private Equity Sales
  • The Private Equity Revelation
  • Your Veterinary Practice Sale is What You Make It
    • Selling Veterinary Practice Doesn’t Equal Leaving
    • Retaining Ownership of a Veterinary Practice You’ve Sold
    • How Selling Can Buy Ownership of a Larger Business
    • Continuing to Run a Veterinary Practice You’ve Sold
  • The Key is Who You Sell To, and How You Do It
    • Corporate Takeovers and Their Typical Outcomes
    • Direct Private Sales and Their Typical Outcomes
    • Leveraging Private Equity and How it’s Different
  • How a Smart Sale Can Multiply What Your Veterinary Practice Earns for You
    • The Sooner You Have Your Proceeds, The Longer They Can Work For You
    • Be a Part of Something Bigger
    • Grow Your Practice with Additional Resources
    • Insulate Yourself From Liability and Risk
  • Closing Points & Summary

Why Young Vets Should Consider Private Equity Sales

When we meet with practice-owning DVMs to chat about the opportunities available to them via strategic private equity sales, it’s common for many of those under 50 to shrug off the conversation as not really relevant to them.

They see selling their veterinary practice  as an exit strategy—a retirement plan—and understandably feel it’s not something worth considering from their current vantage point.

But to equate a smart private equity sale with a smart retirement package would be a big miscategorization—a simplification that ignores its potential utility as a business play to grow both your practice and the lifetime proceeds you’ll end up earning from it.

Young practice owners aren’t immune to the overwork, burnout, loss of family time, administrative headaches and growing overall risk that comes with ownership. They’re also not necessarily accepting an early retirement or even saying goodbye to their practice by engaging private equity. In fact they don’t even need to give up total ownership.

The Private Equity Revelation

The most prevalent hesitation we see with DVMs of all ages comes from the belief that if they sell their veterinary practice, they’re “giving in” or “selling out.” They’re fearful of losing everything from their place in their community and the wonderful relationships they’ve developed with their patients, to their legacy and purpose in life.

This is the beauty of a custom-architected private equity deal. You absolutely won’t be risking the loss of any of those things. In fact you might realize you don’t even need to give up all that much at all. This much is true for any practice-owning DVM, but for those still in the hearts of their careers, the benefits are even stronger.

The unique advantage young practice owners have that gives them a lucrative edge in this case is, coincidentally, the very fact that they’re not ready for retirement.

As a pre-retirement age practice owner it’s this variable that gives you unique leverage, and the reasoning comes down to the nature of private equity sales. With private equity sales, you’re not selling out to a corporation that wants to consume your practice into a profit-obsessed machine.

We’ll outline a lot more of the core differences in types of sale down below. But to help you get a feel for how young practice owners in particular are in a position to leverage private equity for long-term gain without needing to sunset their careers, let’s explore some of the highlights.

If you’re already relating with what we’re describing, we’d be glad to hear from you on a free consultation anytime.

 

Question – Do you know the importance of Real estate in Selling your veterinary Practice? Check our recent blog for more informationHow to Sell Veterinary Real Estate (In 2024)

Your Veterinary Practice Sale is What You Make It

Private equity buyers have a variety of important inherent qualities that differentiate them from corporations and private individual buyers as it relates to what’s possible through a sale.

For the most part though, these are smart, personable investors looking for a chance to be a part of a business with growth potential. They’re not looking to consume your veterinary  practice and fold it into a faceless enterprise, or rewrite everything about how you operate based on an algorithmic risk model.

Their main concern is that your vet practice stays healthy, sees continued success, and is able to grow. Sound familiar? 

This is case in point for why we guide DVMs exclusively toward well-matched deals with private equity. The right buyers are emphatic about structuring purchase arrangements that support the practice’s future through a mutually beneficial outcome with the seller.

Selling Your Veterinary Practice Doesn’t Equal Leaving

One of those outcomes is that you don’t even leave the practice. In fact this is a common goal for both buyer and seller, with most deals making it a point to ensure the selling DVM stays on for at least 2-3 years post close.

On the buyer’s side is an amicable investor who likes your veterinary  practice and already sees its value in both the present and future. They may have no interest in changing much at all from an outside perspective—or that of a long-time client, for example.

As a happily practicing DVM in the prime of your career, should you not want much to change on the surface, you may also be relieved to know that in 99% of deals we help our clients with, the practice name stays exactly the same.

That means you can keep coming to work at the practice you built as the lead vet with no loss of status, except instead of having your day dominated by business operations eclipsing the real work, you’re there exclusively for your clients and patients.

To better understand why we are the ideal advisors to assist you in selling your practice, let’s take a moment to hear from veterinarians who have successfully navigated the sale of their practices with the assistance of Transitions Elite. These video testimonials offer a firsthand look at the benefits of accurately understanding the true value of your veterinary practice and selecting the right partner for your sale. Discover why Transitions Elite is the trusted choice for veterinary practice owners looking to maximize their outcomes during the sale process.

I had previously looked at selling the practice on my own, and I had talked to five different companies about this and had gone through the process individually, and none of it turned out to my satisfaction. After I signed up with Tom, he marketed me to these interested companies. There was competition amongst those interested. It was so relieving at the end of it to know that I got the very best deal possible!

 David Graeff, Cedar Rapids, Iowa

I knew that I would get the best value for my practice if I had a professional helping me. And it definitely turned out to be true that having Tom in my corner. 

I have zero doubt that I would not have gotten the value for my practice if I didn’t have him on my side as well as the ease of it. It was such an easy transition and he made the entire process very simple. 

Sharon Gorman – Las Vegas, Nevada

Transitions Elite holds your hand and guides you through the whole process. Even though it’s a stressful time and situation, they make selling so easy.

Dr. Lonnie & Naomi Davis – Ohio

You Can Still Own a Veterinary Practice You’ve Sold

While “selling your veterinary practice” will of course ultimately entail transferring the lion’s share of ownership, it is actually feasible for a selling practice owner to retain a minority share after the transaction is complete.

There are many, many different ways to structure a deal to the benefit of both parties. In order to maximize valuation of veterinary practice, minimize risk and control for tax exposure, we advocate for our clients’ practices to be sold as their assets. This means that on paper your buyer is purchasing a collection of things like your equipment, inventory, systems, client list and goodwill.

Your buyer will usually create a new legal entity through which to hold your practice’s assets, and this entity effectively becomes the new practice from a legal standpoint.

From our side, this allows you to include 100% of everything that makes up your practice in what you ultimately sell to your buyer, but in return part of your earnings can be in the form of shares in this new legal entity.

The result is that you’ve sold your practice, earning maximum value in a diverse payout structure that includes cash, but you also remain an owner.

Need to know how much is your veterinary practice worth?

Selling Your Veterinary Practice Can Actually Buy You Ownership of a Larger Business

This outcome leverages similar mechanics as above. In cases where your chosen buyer is diversified into multiple practices—or even several non-practice companies—they often form a holding company around their larger business portfolio.

If you choose to sell your veterinary practice to them, they may structure the practice into this larger entity. Just like in the earlier example in which a DVM can retain ownership of their individual practice, this scenario sees a seller become a shareholder in the buyer’s existing company by structuring the deal so that part of their earnings come in the form of stock.

Shares of the larger entity are commonly called “topco” shares, as they’re equity holdings of the company that sits “on top” of the practice and its new sibling companies.

It’s worth noting that having a selling DVM retain a certain degree of ownership in either the practice itself or the parent company can often be a desirable outcome for buyers as well. It all comes down to the fact that private equity buyers typically aren’t looking to “take over” a business and eliminate any shred of private ownership from its culture and brand perception. If anything it offers additional assurance that the person who got the practice where it is today will still have a personal financial interest in its continued success.

Ownership Aside, You Can Still Run a Vet Practice You’ve Sold (if you want to)

Most practice-owning DVMs long for the days when work wasn’t weighed down by the unending demands of business ownership. After all, we didn’t go through med school so we could deal with personnel issues and negotiate equipment leases.

Having said that, loving business certainly isn’t incompatible with loving veterinary medicine (look no further than our own Dr. Warren for proof!). So what if you’re into the whole ‘running the business’ side of things? Does that rule you out from being someone who can leverage private equity?

Not always.

It’s true that one of the main benefits to a practice sale for plenty of DVMs is vacating the management role at their practice. And while strong management does tend to be a key competency of incoming PE buyers looking to nurture and grow the practice, it’s not a given that they’ll want you out of the job.

If running the practice is something you’re skilled at, and the practice is clearly thriving under your leadership, there’s no fundamental reason why a prospective buyer would oppose you staying on in that capacity.

If administration isn’t your top concern but you’re partial to your role as lead DVM in charge of patient care, that’s an even more straightforward condition that won’t be hard to secure with a well-matched investor that sees your value.

Finding that ideal match is exactly where we come in. Get a Free Practice Valuation Today! 

The Key Is Who You Sell Your Vet Practice To, and How You Do It

The power and possibility we’re discussing here is only in play because of the unique nature of private equity sales. Private equity offers an ideal coalescence of otherwise opposing factors when it comes to practice sales.

It can deliver warm and long-lasting relationships with buyers you trust, unparalleled control over the outcomes of your deal, and total preservation of your work. It then adds access to increased fiscal resources and advanced management expertise—all in a commitment to continue to nurture and grow your practice.

Let’s break down the key differences between the 3 major types of sale so we can understand how each can influence outcomes:

Corporate Takeovers

The first market reaction to the pet boom was a flood of massive conglomerates pouring in to scoop up as many DVM practices as they could.

As vets became increasingly overworked, short-handed and subject to burnout, these mega corporations seized the opportunity to give desperately exhausted practice owners a quick way out—an option which many have taken.

What Corporate Takeovers Typically Mean for Your Outcome

  • Your practice gets folded into a massive collection of practices and totally unrelated subsidiary companies.
  • In most cases your name and brand will be completely wiped out.
  • Almost always the lowest net value in terms of your ultimate payout/proceeds.
  • The deal is done purely through counsel and other corporate representatives. There is no person or group of people personally invested in the deal or your practice after it’s bought.
  • You have very little ability to structure a custom deal involving partial ownership, preservation of your practice’s identity, or adherence to your values.
  • Your tax exposure is likely to be far greater, since you have fewer options and tools to employ in crafting a diversified payout.
  • Little-to-no ability to control the public-facing narrative of the sale.
  • Little-to-no ability to influence the way the practice or its parent companies are run, or how long-standing clients are treated.

It’s fair to think of these corporations as acquisition machines. Their business hinges not on the growth and success of your practice in the future, but on how consuming your practice can immediately increase the reach and dominance of their brand.

Corporate takeovers are executed to scrape market share into the fold of the biggest companies on the planet. There is very little else to it than that. It’s also important to consider the detrimental impact they’re having on the state of veterinary care in general. The more DVM practices are consumed by major enterprises, the more commercialized, mechanical, disconnected and exploitative animal care becomes.

Unless your only concern is the swiftest possible exit and your preference is to have your practice and legacy erased, going this route is worse for every stakeholder involved, excluding of course the buyer.

If you’re still in the prime of your career or at least a good decade or two away from retirement, there’s no way to leverage a corporate buyout to power-up your practice as you continue to grow both it and your earnings potential.

Direct Private Sales

After reading that, direct private sales may sound pretty good! And in comparison to corporate takeovers, they would definitely be a better consideration. Unlike in those scenarios there’s nothing inherently unethical about a nice and simple private sale—depending of course on who the buyer is.

But what private sales avoid in terms of macro-externalities, they can often offset with their shortcomings in potential earnings for the practice owner, common inability to add value to the practice itself, and the enormous additional risk they introduce.

What Direct Private Sales Typically Mean for Your Outcome

  • Typically a very lengthy courting and due diligence process.
  • Significant risk of exploitation and loss by bad actors posing as interested buyers.
  • You get locked into exclusive LOIs, which block other offers.
  • Independent buyers often struggle with financing, which can sabotage a deal at the last second.
  • A very small base of potential buyers means little-to-no competition on offers.
  • Limited resources means a very limited boost in growth trajectory post-sale.
  • Private buyers have a much smaller appetite for complex deal structures, meaning lower net earnings and often higher tax exposure.
  • Your name and brand are unlikely to remain.
  • Very difficult to retain a leadership role or significant influence over practice’s growth.

If we’re considering options for a retiring DVM, private sales aren’t the best option based on many of the factors listed above. For younger practice owners not necessarily looking for an exit strategy while trying to make the most of their practice, this is definitely not going to be a viable path to that outcome.

Private sales of DVM practices typically occur with another practice or a local business owner as the buyer. This can be nice if you’re looking for a new home for your practice and your main concern is handing it over to someone who will run it with the same personal dedication you had.

But for one thing it doesn’t tend to leave any more room for you to remain a big part of the practice’s external image—or affect its future. This too, is really only viable as a way out, and even then it’s laden with drawbacks and risk factors that can easily wind up destroying everything you’ve worked for—or at least amounting to more of a burden than continuing to put up with ownership yourself.

Perhaps most critically in terms of issues that crop up with direct private sales is buyers’ total dependence on institutional financing in order to close the deal. Just like when an individual buys a house by relying on a mortgage, private buyers are almost always fully dependent on bank loans to pay for your practice.

That means for the majority of the time you spend in discussions with a potential buyer and even bound by an exclusive Letter of Intent, there’s no guarantee they’ll actually be able to secure the funds they need. Direct private sales are therefore totally dependent on favorable market conditions in addition to the potential buyer’s own creditworthiness and leverage.

In recent years as interest rates have climbed to new highs, access to debt capital is almost entirely nonexistent, meaning direct private sales are essentially closed—and will remain so for some time.3

What About Selling your veterinary practice to a Partner or Practice Associate?

For those that have a close partner or associate in a position to buy the practice, this can seem like a win-win scenario. Indeed it does eliminate some of the drawbacks and issues that commonly come with direct private sales to unknown parties, but at the end of the day it’s not much of a better vehicle to our desired end result. 

Our goal here is to allow you to carry on in your career with autonomy as lead DVM in a stronger, more valuable practice that still functions and feels like yours—all with greater earnings, less risk, more growth potential, and a much higher quality of life. 

While you’ll definitely have less to fear in terms of general due diligence breaking down with a trusted associate, they’ll still be relying heavily on bank financing. If they do secure it you will inevitably be settling for a much lower valuation and selling price. You’ll then be executing a traditional, holistic sale of your practice as opposed to crafting a deal that can effectively be less of an exit plan and more of a business upgrade for your practice.

You’ll be foregoing options for advantageously complex ownership structures, access to substantial capital and outside business expertise, and the reduction of risk that comes with bringing in someone from the outside. On top of that, selling to a partner is emotionally and logistically complicated. It very easily muddies the waters of both practice dynamics and the personal relationship that existed prior to the sale.

In many cases we see former owners who go this route ending up with very little beneficial change in terms of their management responsibilities in the practice while losing control and their leadership role. If you’re still engaged in your career and looking to build, this isn’t the way to do it.

Leveraging Private Equity

So why is private equity the golden egg in the midst of this apparent minefield we’re illustrating? For one, it takes the best of both corporate and private sales and merges them. It also avoids the vast majority of their significant risks and drawbacks. 

But it’s more than just an idyllic hybrid of your worst possible options. The unique nature of private equity sales enables us to use it as a mechanism for living growth while you’re still active in any or all aspects of the practice.

REAL PEOPLE WHO SEE YOU AS THEIR PARTNER

Unlike corporations who want to assimilate your practice as quickly and completely as possible into their portfolios, and direct private buyers who see your practice as their new business, leveraging private equity means you sell ownership to smart investors who simply want to be a part of a successful business.

They excel at management and growth strategy, but they have no interest in overwriting your practice with their own image or unifying it with some massive conglomerate’s branding.

They’ll eliminate the administrative and bureaucratic burden of running your practice (to the degree you welcome that), but also happily give you respect and space to continue working as the leader in your workplace.

Perhaps most importantly, you’ll come to the table with real people that want to get to know you, your vision and your values. You’ll sell to people who see things the same way you do and support the policies and priorities you feel strongly about.

THEIR ENDGAME = GROWTH FOR YOUR Vet PRACTICE

Because their investment is your vet practice, the endgame a well-matched private equity buyer has will always line up with yours: the long-term success of the business.

Private equity investors aren’t looking at your practice as a means to an end whereby it’s spun off, folded in, dissolved or otherwise leveraged as part of some bigger invisible plan. That’s corporate takeover stuff.

Their money is in your practice so plain and simple, if the practice survives, thrives and grows, so does their investment. 

RESOURCES, CAPITAL & EXPERTISE

Another reason we advocate for private equity is because of the material advantages it adds to your practice.

Smart private equity buyers who invest in your practice don’t just sit idly by and hope for the best—or arrogantly install their own management and ignore what’s best for growth from a long-term perspective.

When a competent broker like Transitions Elite brings a private equity buyer to the table for you, you can be sure that this won’t be their first rodeo. Among other things they’ll have strong credit and good relationships with banks so they can produce capital and add financial power to your practice.

They also come with deep and diverse professional networks, proven experience in management and sound strategic growth strategies. 

In a sense you can think about a PE sale like bringing on an advanced strategic business expert who will have a personally vested interest in your success, and who you pay entirely via equity shares. And instead of them getting the cash signing bonus, you do.

OTHER WAYS PRIVATE EQUITY CAN BOLSTER YOUR FUTURE

  • Full flexibility to determine your future involvement. Go back to focusing full time on patient care, or maintain a leadership role in the practice.
  • Full flexibility to structure a smart, diversified earnings package which will see your net gains maximized and your tax exposure minimized.
  • No risk of bad actors masquerading as interested buyers or drawn out due diligence proceedings.
  • A fully competitive bidding landscape in which you’re presented with multiple offers all competing for you.
  • Assurance that your name and legacy will survive and thrive along with the practice.
  • Assurance that your patients and clients will continue to receive the same standard of care in the ways that matter most to you.
  • The highest possible practice valuation with nothing left on the table.

A GOOD VET PRACTICE BROKER MAKES THE IDEAL MATCH—AND PAYS FOR THEMSELVES

The key in executing the kind of PE deal that facilitates the exact outcome you want for yourself and your veterinary practice is in your broker. What we’ve outlined above? This is what we do.

At Transitions Elite we are advocates for DVMs, not for their potential buyers (although we do ensure everyone is happy by signing). Our founder, Dr. Michael Warren, personally knows both the pain and passion that goes into owning a practice and being a vet.

We exist specifically to enable these kinds of futures for our clients. With [dozens/hundreds] of happy DVMs successfully leveraging a Transitions Elite-architected deal to return to what they love while reclaiming their quality of life and securing their livelihoods, we know what to look for on their behalf.

We present your practice in its most desirable form, research and qualify potential buyers, and guide you through the entire process. If this sounds like something that could make sense for you, book a free consultation with us today.

How A Smart Vet Practice Sale Can Multiply What Your Practice Earns For You

We’ve talked a lot about hypothetical practice owners who can’t wait to stop being on the business side of things. But what if you’re not one of them? You might be perfectly content as a business owner and manager. Or perhaps you notice the strain it puts on you, your work-life balance, or your family, but you’re not at the point yet where you’re racing to get out.

You’ve digested all the benefits we’ve laid out that come with bringing on a private equity owner, but is selling your practice when you still have this drive and energy really the right move?

In truth it all depends on you and your goals. If you value being the owner above all else, then perhaps it isn’t. But if what you really care about is growing your practice, seeing it succeed while respecting your values, and locking in the maximum lifetime return on your hard work for both you and your family, then a private equity sale structured to your specifications is the tool to get you just that.

The Sooner You Have Your Proceeds, The Longer They Can Work For You 

It’s not all about practice growth in this equation. We also want to focus on you and your loved ones. So why entertain a sale through that lens? For one because as a young practice owner, the smartest time to sell is the point at which you can capture the most value.

When you sell your practice to a well-matched PE buyer who’s focused on its future growth potential, you can come away with a formidable earnings package even if your practice is still only in its adolescence. Once you’ve been paid (and kept your tax exposure low with the help of an experienced broker), you can immediately put your money to work.

The longer you wait, the less time you have to let your money grow. If you wait until you’re thinking about retirement, you’ll be dipping into your earnings almost immediately after closing. That means whatever you’ve worked out directly as part of the deal is the full, all-inclusive package you’ll see from the sale.

In contrast, the more time you have before retirement, the more your wisely invested proceeds can generate for you over the years. This is another brilliant illustration of why private equity sales are unique—your investors think in growth potential, meaning you can get paid today partly based on what your practice will become with their help, down the line.

Be A Part of Something Bigger 

If you do happen to value business ownership, selling your veterinary practice via an intelligently-designed PE deal can actually mean trading up into a larger overall portfolio.

As we mentioned earlier on, the smartest payout packages are made up of multiple components both for tax purposes and to maximize your overall return.

Structure a portion of it in co shares (equity in the buyer’s company) and while you’ll alleviate yourself of day-to-day practice ownership, you’ll be trading it for a stake in a larger business. This can also lead to additional value and investment opportunities down the line, as you’ll essentially be investing in your buyer’s private equity investing business.

This is much more than a perk. Gaining ownership in a successful PE firm is not a common opportunity, and the doors it stands to open are substantial. Most people cannot simply buy their way into this kind of investment, but practice owners can get in while instead being paid themselves.

Grow Your Veterinary Practice with Additional Resources

Whether you structure a percentage of ownership in your buyer’s entity via topco shares or even simply retain a portion of equity in your own practice, you can effectively sell your practice while staying an owner.

When you do, you continue to benefit directly from its growth and success, just like your buyer does. Except now that you’ve brought on a private equity investor your practice will immediately begin to benefit from their financial resources, extensive business expertise, and vast network of professional connections.

If you were on a solid trajectory before, this is like strapping rocket boosters to the business and hitting a big red ‘Ignition’ button.

Insulate Yourself From Liability and Risk

While we’ve focused primarily in this article on growth, earnings and quality of life opportunities through strategic private equity sales, there’s a significant upside in their effectiveness at insulating you from potential sources of harm.

As the legal owner of your practice, you’re fully exposed to an overwhelming breadth of potential liability—from issues with suppliers and expensive leased equipment to never ending personnel issues.

No matter how well you run your practice, you can’t control other people. But you can prevent damage from coming to you and your livelihood through accidents, bad choices, and anyone with bad intentions—unless someone else takes on that responsibility for you.

And worry not, your potential buyers are fully aware of this aspect of the deal. They’re used to it, familiar with risk factors, and properly insulated. More importantly, they have valuable experience in minimizing risk factors as much as realistically possible.

When something does happen, they’re the ones who answer for it, leaving you completely safe and protected. As long as you’re practicing you’ll always have some degree of direct care-related exposure, but liabilities associated with owning the practice as a business will be fully mitigated and taken off your plate.

Frequently Asked Questions About Selling a Veterinary Practice

How do I assess the value of my veterinary practice?

To figure out your practice’s value, look at its financial performance, client base, location, and the current market conditions.

What documents are needed to sell a veterinary practice?

You’ll need financial records, tax returns, legal documents, and any other relevant paperwork.

How do I find a buyer for my veterinary practice?

You can find a buyer by marketing your practice through brokers, online platforms, and industry networks.

What should I consider when negotiating the sale of a veterinary practice?

When negotiating, focus on the price, payment terms, buyer qualifications, and how the transition will be handled.

How can I ensure a smooth transition when selling my veterinary practice?

Plan the handover of client relationships, manage staff changes, and keep business operations running smoothly to ensure everything goes well.

How do I sell my veterinary practice to a corporate buyer?

Identify companies interested in buying, prepare detailed financial and operational information, and negotiate terms that fit corporate acquisition practices.

How do I sell my veterinary practice to an associate?

Prepare a current associate to take over, discuss financing options, and create a transition plan to ensure continuity for clients and staff.

What are the tax implications of selling a veterinary practice?

Consult with a tax advisor to understand the tax implications, including potential capital gains tax, and how to structure the sale to minimize tax liability.

How long does it typically take to sell a veterinary practice?

The process can take several months to over a year, depending on market conditions, practice size, and buyer interest.

What are the common mistakes to avoid when selling a veterinary practice?

Avoid mistakes like not preparing financials properly, ineffective marketing, setting an unrealistic price, and failing to plan for the transition.

How do I prepare my staff for the sale of my veterinary practice?

Communicate openly with your staff about the sale, involve them in transition planning, and ensure they understand their roles after the sale.

What financing options are available for buyers of veterinary practices?

Buyers can explore financing options such as SBA loans, seller financing, and conventional bank loans.

How do I handle client communication during the sale of my veterinary practice?

Be transparent with your clients, reassure them about the continuity of care, and introduce them to the new owner.

What are the benefits of hiring a Veterinary Practice broker to sell my veterinary practice?

A broker can help with valuation, marketing, finding qualified buyers, negotiating terms, and ensuring a smooth sale process.

How can I increase the value of my veterinary practice before selling?

Improve profitability, expand services, upgrade facilities, and maintain a strong client base to boost your practice’s value.

What are the legal considerations when selling a veterinary practice?

Draft a sale agreement, understand regulatory requirements, handle employee contracts, and ensure compliance with confidentiality laws.

How should I structure the sale of my veterinary practice?

Decide between a stock sale or asset sale, consider tax implications, and work with legal and financial advisors to finalize the terms.

What are the benefits of selling to a corporate buyer vs. an associate?

Corporate buyers can offer a quicker sale and higher price, while selling to an associate can ensure continuity and maintain existing relationships.

How do I maintain patient confidentiality during the sale process?

Use non-disclosure agreements, limit information to serious buyers, and protect client records during negotiations.

What role do non-compete agreements play in the sale of a veterinary practice?

Non-compete agreements prevent you from starting a competing practice nearby, protecting the buyer’s investment and ensuring business continuity.

How do I handle existing leases or property ownership when selling my veterinary practice?

Negotiate transfer terms with landlords for existing leases or include property terms in the sale agreement if you own the property.

Closing Points: Selling Your Veterinary Practice in 2024

Sell a veterinary practice

Whether you’re happily in the prime of your career and loving every aspect of work from providing care to running your practice, or are still far from retirement but wishing your business could thrive without taking so much out of you, you’re in a unique position to gain.

With a broker with proven experience like Transitions Elite on your side matching you to an investor that shares your values and vision, you can architect your future by leveraging private equity sales.

By strategically utilizing private equity, no outcome is off the table. You can remain an owner, remain the lead doctor at your practice, and continue to service your patients to your standard of care and under your name. You can take advantage of the ability to become an owner in your buyer’s PE firm, all while your practice thrives with help from your investor’s expertise, resources, connections and access to capital.

Over the rest of your career you’ll be a part of something much bigger—to the extent you want to be—as your proceeds from the deal passively earn for you in the background.

The result is a stronger practice (that can still be yours!), a smart and invested business partner, the best possible work-life balance for you and your family, and maximized lifetime earnings from your practice.