When you ask someone about the variables involved in establishing the value of a veterinary practice, they will usually list the quantity and quality of the equipment, the turnover, the profit, the location, the size of the patient base and the demand for practices in the area. All of these factors (and more) are, of course, huge indicators of the expected price.

On August 6, 2018, the “Queen of Soul” Aretha Franklin died at aged 76, after a lengthy battle with cancer. Not married, Franklin left behind four sons, aged between 48 to 63, a long-term de facto partner, an estate worth about $80 million…and no will.

Despite the best of intentions, even once the framework of a practice sale is agreed, it is often still very hard to predict the exact date that a deal will settle. Even with the buyer and seller doing all that they can to prioritise and expedite the deal, a transaction can be at the mercy of the availability and circumstances of many other people’s lives, including:

In Greek mythology, the story of Icarus illustrates the folly of aiming too high. Facing imprisonment in Crete, Icarus was given wings made from feathers and wax, in order to help him escape. During the escape, Icarus ignored the warnings that came with the wings and flew too high in the sky. The higher he flew, the closer he got to the sun…which melted the wax holding the wings together. As a result, Icarus fell to his death.

The stakes are high in practice sale transactions.  You are possibly selling a practice with clients of long standing, who you have nurtured for many years, or you are purchasing a practice which you hope will provide the best opportunity for you, so that you can enhance its potential and your income, in your own comfort zone.

For many contracted veterinarians, their planned path to ownership involves the buy-in or buy-out of the practice they are already working in. It should be the ideal buy-in scenario… They have effectively taken the practice for the equivalent of a test drive and know it inside-out, so the purchase involves far less risk than buying any other practice. They already know, hopefully get on with, and are accepted by clients and staff; they know the quality of the equipment, and there is a mutual respect with the vendor.

There comes a time in every successful veterinary practice owner’s career when they consider opening another branch or buying another practice. This juncture represents a possible turning point in their personal fortune. It introduces an opportunity to grow their wealth by expanding the scale and scope of their business interests and, at the same time, it also introduces new complexities and risks into their life, which have the potential to bring down what they have built thus far.

Retirement is often thought of as an event, a date on the calendar, a threshold that you cross one day into a new phase of life. Making a person’s profession or retirement an “all in or all out” proposition like this makes it a big deal. It means that people looking at retirement need to:

Once a buyer and seller have agreed to the price and terms of a practice sale, their lawyers’ roles should be straightforward. It should be a matter of documenting pre-negotiated elements of the deal, in a way that both protects their clients’ interests and minimises any potential exposure to risk.

When a practice owner begins to think about selling their business, it often seems that the natural choice for the purchaser is close at hand, in the form of a trusted employee or contractor. They will often offer that trusted employee the ”right of first refusal” to purchase the practice, before they put it on the market.