When considering the sale of your entire practice, the sale of a partial interest to your associate/employee, the buy-out of an owner, the purchase of a practice or the merger of two or more practices, the threshold question boils down to what is the practice worth. There are many methods that are used to value a practice and it is important not to rely on only one method to determine value since each practice is different and presents a unique set of factors. Many practice owners and advisors believe that the value should be based on a percentage of the practice's gross income. This is not a reliable means of determining the practice value since it does not consider the expenses and profitability of the practice. A better approach is to consider the earnings and profitability of a practice, while at the same time analyzing non-economic factors such as location, competition, equipment, quality of the staff, retention of the owner's services, potential growth, practice stability, facility appearance, visibility, available parking and expansion opportunity. The preferred appraisal methodology is to capitalize the net earnings of the practice. Under this technique, the more profitable the practice the greater the practice value. Conversely, less profitable practices are of less value because they do not generate a fair return on investment.

The Veterinary Practice Broker is uniquely suited to refer our clients to a handful of appraisers who specialize exclusively in the appraisal of veterinary practices for purposes of sales, associate buy-ins, acquisitions, buy-outs and marital divorces.