There are a lot of misconceptions out there among veterinarians who are buying practices, about the moving parts in a Vet premises lease. What is and isn’t negotiable? What is attractive to a landlord? What should and shouldn’t they ask for?
Vet Practice Magazine interviewed PSS Managing Director Simon Palmer, about how to improve your chances of getting the maximum value for the sale of your veterinary practice.
For those of you unfamiliar with vet practice financials, you may be forgiven for thinking that if you’ve seen one, you’ve seen them all. That they all follow a similar structure or template, and that the practice’s income and expenses will always be labelled somewhat consistently from practice to practice. The truth of it is that the structure and quality of vet practice financials can vary enormously.
When veterinarians decide to get into practice ownership, they spend many hours analysing possible practices to buy or sites to start up in. They fill spreadsheets with costings and projections, competition analysis, ideas and business plans before they act.
One of the first questions that a buyer will ask when a business is for sale is “Why are they selling?”.
There is an urban legend that if a frog is suddenly put into a pot of boiling water, it will jump out and save itself from impending death. But, if the frog is put into lukewarm water, with the temperature rising slowly, the frog will keep trying to adjust and acclimatise…until it’s too late.
There is a common saying that running a successful business and having a successful career is a “marathon, not a sprint”. The saying is meant to remind people to think long term, to pace themselves and have longevity in mind, rather than just short-term results.
One of the first questions that a buyer will ask when a business is for sale is “Why are they selling?”.
In 2002, Billy Beane, the general manager of the Oakland A’s baseball team, was faced with the departure of star players and a limited budget to replace them. He realised that if he was going to look for players using the same metrics as all the other teams, he was going to find the same players that every other team did and be outbid every time. His solution was to find and use new metrics (Sabermetrics), in order to find underappreciated and affordable players and create a winning team from them.
When a practice owner is looking to sell their practice, they will often put off telling their staff about the sale for as long as possible. There are many reasons for this. Sometimes (often) they won’t want to tell the staff at all until after a deal has been locked in with a buyer.