Retirement Planning for Vet Practice Owners

Retirement is special. It is, in a way, a fruit produced by your hard labour. Everybody thinks about it, every veterinary practice owner, but many fail to meet their own expectations due to a lack of preparation.

Many practice owners spend years caring for animals and running their clinics, only to reach their 50s or 60s and realize they don’t have a clear plan for the next stage of life. Some hope their practice will fund their retirement. Others expect to sell but aren’t sure when or how.

Truth is, selling your practice for funding your retirement is indeed a good idea. However, there are many factors to take into consideration before you’re able to do so in a way that you actually fetch the price your practice truly deserves.

In this guide, we’ll go over the essential steps, everything from understanding the value of your practice to building an exit strategy that actually allows you to move on to the next chapter of your life.

Why Retirement Planning Starts Now

Retirement planning isn’t as easy as one might believe, nor is selling your practice. If you suddenly decide to retire and sell your practice in a rush, without the proper procedure, you’ll end up leaving a massive chunk of money on the table.

Another mistake often made by veterinarians is waiting till burnout hits them or they’re too close to retirement. The issue here is that desperation may start to kick in, leading to undesirable results; settling for less than what your practice could’ve brought you.

Planning early has huge benefits:

• You can grow the value of your practice instead of selling in a rush.
• You can structure your exit in a way that fits your lifestyle.
• You reduce financial stress, knowing exactly what you need to retire comfortably.
• You give your team and clients a smoother transition when the time comes.

Retirement planning is like preventative care, which you may recommend to your clientele. Little by little, everyday effort may not immediately show results, but over time, it makes a massive difference. So, in a nutshell, retirement planning starts now if you want the best offers and on your terms.

Understand the Value of Your Practice

For the majority of veterinary practice owners, the practice itself is their largest asset. Keeping that in mind, it is obvious that the seller must truly understand the value of their biggest asset. Yet, many fail to realistically, in market-relevant terms, gauge it.

A big misconception among practice owners is that their practice is worth what their revenue shows, but buyers don’t look at gross revenue. Instead, they look at EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). This is the true measure of profitability and the main metric that determines the value of a practice in market terms.

Here’s an example. Imagine two veterinary practices with $2 million in annual revenue.

• If it only produces $200K EBITDA, it might sell for $1.2M (at 6x EBITDA).
• If it produces $500K EBITDA, it could be worth $3M–$5M (at 6–10x EBITDA).

Depending upon the EBITDA, the final number they fetch differs a great deal. And if we look beyond numbers, buyers look at:

• Number of doctors, staff stability, and retention
• Workload distribution and whether a practice relies too heavily upon a single doctor or owner
• Culture, client loyalty, and community reputation
• Location and local demographics

If you’re unsure about how you can accurately measure your practice’s worth, it is recommended to get a professional valuation through a reputable financial advisor. This gives you a clear picture of your starting point and what improvements you can make to increase the value before you sell.

Choose the Right Exit Strategy

Retirements look quite different from one another. Some veterinarians like to take a big cheque and walk away, no responsibilities. Others might want to stay on for the love of practice and the perks of being employed, without the struggles of ownership. So, your exit strategy would vary, too, based upon your goals. Here are the most common options:

• Full Buyout: You sell your entire practice and step away completely.
• Equity Rollover: Herein, you sell most of the practice but keep a stake in the buyer’s larger company. This way, you benefit from future growth and get a second payday if they further sell the practice.
• Earn-Out: This can be tricky, as herein, your payout is tied to promised future performance, be it hitting a certain revenue point or profit goals. This is a high-risk but high-reward strategy. This can increase your total return if the practice does well, though.
• Stay-On Agreement: You sell the practice but stay on as a medical director, associate, or a pre-decided upon role for a period of time. This way, you give your staff and clients a softer landing; they’d obviously miss you.
• Real Estate Retention: If you own the clinic property, you can keep it and lease it back to the buyer, providing steady rental income.

The right choice depends on whether you want immediate cash, long-term income, or a balance of both.

Set a Succession Plan in Motion

A succession plan is necessary to preserve what you’ve built. How you leave your legacy matters, and you ought to have control over it. 

Ask yourself questions like:

• Who will take over patient care and leadership when I step back?
• How will my staff be supported during the transition?
• What message will I share with clients about this new change?

The thing with a success plan is that it makes the process not just easier for you but for everyone involved, directly or indirectly, with the clinic. It reassures staff that they still have a future, keeps clients loyal, and protects the value of your practice, which is something you’ve built over the years.

Without it, you risk losing key people or seeing clients drift away right when stability matters most.

Work On the Business, Not Just In It

This often seems like a drag, but it is easily one of the most important things you should do as a business owner. One of the biggest mistakes veterinarian practice owners make is spending all their time working in the business, being a vet, and practicing medicine.

Needless to say, that inherently isn’t wrong, nor are we discouraging it. However, not spending enough time working on the business itself, strategizing, working on growing it, and future planning is a mistake.

When there’s an imbalance, the business starts to fall behind. Buyers aren’t particularly keen on getting a business that they must treat like a job. They want a business that runs itself, independently, without hiccups.

The more you can step back from the day-to-day grind and strengthen your leadership team, the more valuable and sellable your practice becomes.

Also, be sure to learn about the tax implications of selling your veterinary practice.

Build Your Advisory Team Early

Veterinary practice owners tend to wait until they’re ready to sell tomorrow and then decide to seek professional guidance. By then, however, it is often too late to make strategic changes that could dramatically shift the value of a practice and get a better deal, securing their retirement.

The smart decision here is to start building your advisory team long before you decide to actually retirement. Why? Because selling your practice is arguably one of the biggest, if not the biggest, financial decisions you’d make, and it must not be made with a near-sighted lens. 

Here’s who you need on your side:

1. Financial Planner

Your practice is your biggest asset, so understanding its true monetary value is extremely important to secure your future. This is why you need a financial planner that you can trust to make sure that the sale of your practice will fund your retirement and the life you want to live.

Ideally, this should be an individual or advisory firm familiar with veterinary professionals or healthcare. Their job will to help you come up with “the number”, the amount of wealth you’ll need to retire comfortable with, protect your retirement income needs with inflation, healthcare, and lifestyle in mind, diversify your wealth before and after the sale and strategize whether to sell your real estate or keep it as rental income (a path many veterinarians take).

2. Veterinary-Specific CPA

Taxes and profitability play a huge role in your eventual sale price, and many owners underestimate how much clean, well-presented financials can increase practice valuation. A veterinary-specific CPA makes your practice look good on paper, and alas, that’s why buyers look for proof. A CPA who understands veterinary practices can:

• Clean up your books so they show maximum profitability (buyers pay for earnings, as we stated above, not just revenue).
• Advise on practice spending to avoid “no-low” practices that burn through cash.
• Structure your financials to appeal to buyers, be it corporates, private equity or individuals.
• Implement tax strategies that minimize liabilities during and after the sale. After all, nobody wants their hard-earned retirement fund to just go out in taxes.

3. Legal Expert for Contracts and Estate Planning

Selling a practice, one that involves medicine, can be an extremely complex legal process. It simply isn’t possible and not advisable to do it without having an attorney with experience in healthcare or veterinary transition by your side. 

There is a lot they can do for you, such as drafting and reviewing contracts for fair terms (protecting your interests), providing advice on employment agreements, non-compete clauses, and partnership structures, handling estate planning so that your wealth is secured for future generations and more.

Without legal expertise, owners shouldn’t sign any contracts for the outcome cannot always be desirable, be it in the form of reduced freedom, payout or conflict of interest.

4. Transition Consultant

Last on our list (which is in no order), but ironically one of the more important members is a transitions consult, a financial sales advisor if you may, or simply a specialist who excels in vet practice sales. This role is different from a traditional broker. Transition consultants:

• Understands the veterinary market, including private equity trends and corporate interest.
• Builds a competitive environment among buyers to maximize your multiple, creating bidding wars.
• Guides you step by step through negotiations, due diligence, and closing.
• Make sure your culture, team, and legacy are preserved in the deal.

Many veterinarians who tried to sell on their own ended up unsuccessful or sold for far less than they could have. Don’t make the same mistake and work with a practice sales advisor today. 

Why Build This Team Early?

The earlier you bring in the right advisors, the more options you give yourself. It is as simple as that, really, but it’s a massive advantage. A CPA can start improving profitability years before a sale, a transition consultant can align your operations with what buyers want, and a financial planner can make sure you’re saving wisely. Hence, the sale isn’t your only retirement cushion.

By the time you’re ready to sell, your practice will look stronger, your finances will be more secure, and you’ll be in a much better position to negotiate, which is why building your advisory team early isn’t a cost but an investment in your future freedom.

Let Transitions Elite Help You Retire on Your Terms

As a veterinarian, you always advise your clients to seek professional guidance rather than rely on partial research or limited knowledge. The same applies when it comes to selling your practice, one of the most important decisions of your life.

For most veterinarians, a practice is not only the largest asset but also a legacy built over decades. To make sure you receive the best outcome, it makes sense to work with Transitions Elite. We’ll explain why.

We are an advisory and consulting group that specializes in helping veterinarians and other medical practice owners sell their businesses for maximum value. Co-founded by Dr. Michael Warren and Melanie Seymour, our team brings years of experience in practice growth, optimization, and sales.

Here’s how we can help with our veterinary practice sales services:

• We provide growth strategies, recruitment support, and access to a network of qualified buyers.
• From negotiating equity rollovers to ensuring continuity for staff and clients, we understand that terms matter as much as dollars.
• Our team guides you step by step through valuations, buyer selection, due diligence, and contracts, removing the burden from your shoulders.
• We make sure your legacy carries forward as you move into the next chapter of your life.
• A successful sale brings not just financial freedom but also the time to enjoy life. Many of our past clients have seen their futures transformed through this process.

If you are ready to explore what retirement could look like, whether it is five years away or just around the corner, let Transitions Elite be your partner in achieving the outcome you truly deserve. Get a free evaluation of your practice today.

Closing Thoughts

Retirement must be planned and designed, and designs take time. Start as early as possible, 2-5 years ahead of the final date. The earlier you start, the more doors open up and the more options you have to choose from.

Things you need to know are your number, your practice’s true market value, and how you can improve upon it. Work with advisors, and with the right preparation, you can retire comfortably on your terms, reaping the harvest you’ve sown.

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