Archive | Practice Value

RSS feed for this section

WHAT DO PRACTICE OWNERS DO TO DRIVE VETERINARY PRACTICE VALUES DOWN?

Stanley R. Creighton, DVM, Diplomate, ACVIM, Internal Medicine CEO, National Veterinary Associates, Inc. And Dick Goebel, DVM President, Simmons Great Lakes Practice owners too often are focused on the day to day challenges of patient care, client service and staff management that they overlook factors affecting profitability and practice value. In this session, the authors […]

How can the “perfect” veterinary practice have little to no value?

Doyle Watson, DVM, Simmons Southeast The Great Heartbreak! A practice is grossing say $1.2 mil, offers quality service and medicine, high single digit growth, primo demographics, all the toys—-the perfect veterinary practice! Except for one key ingredient—-After all the real and necessary annually recurring operating expenses, including professional staffing and management, there is very little […]

How can Anyone Afford to Buy My $1,000,000 Veterinary Practice?

Question: How can Anyone Afford to Buy my $1,000,000 Veterinary Practice? Answer: Because it “Cash Flows” Doyle Watson, DVM, Simmons Southeast In a previous Advocate article (September, 07), we mentioned that a practice must “cash flow” before someone could afford to buy it or get it financed. We said it was the topic of another article. […]

Is My Practice Worth One Year’s Gross?

We are continually impressed by the number of times we hear veterinary practice value being based upon some percentage of gross revenues. This concept is often suggested by some finance companies as well as veterinarians and even an occasional Accountant, but rarely by those who are familiar with business appraisal methodology. Take, for example, the […]

What Creates Veterinary Practice Value?

David Gerber, DVM, Simmons Northwest Strictly speaking, a veterinary practice’s value is a function of its profitability. It is profitability that determines the maximum amount for which a practice can sell and still satisfy the financial requirements of buyers and lenders. But there are other intangible qualities that make one practice more “valuable to buyers […]

What is the Basis of Practice Value? (Part II: Calculating Earnings)

– Doyle Watson, DVM, Simmons Southeast In another article, we have discussed the calculation of “Adjusted Net Cash Flow.” This is the amount remaining from gross revenues after necessary operating expenses are met. It is the amount available to the owner to spend at the owner’s discretion. The debt service and owner/chief of staff’s (COS) […]

How Does the Real Estate Effect the Practice Value?

– Dave Gerber, DVM, Simmons Northwest With the exception of mobile practices, every veterinary practice must have a facility in which to operate. The cost of the facility, either rented or owned, is a real expense to the practice when considering profit. In essence, there needs to be a “rent” figure as an expense on […]

What is The Basis for Practice Value? (Part I: Establishing Cash Flow)

– Doyle Watson, DVM, Simmons & Associates Southeast It continues to impress me the number of times I hear veterinary practice value being based solely upon some percentage of gross income. This concept is often suggested by some finance companies as well as veterinarians, but rarely by those who are familiar with business appraisal methodology. […]

What Determines Veterinary Practice Value?

– Dave Gerber, DVM, Simmons & Associates Northwest In reality there are many factors, both financial and other qualities that contribute to practice value. After all, the true value is simply what a willing buyer is willing to pay and those decisions are based on many, many things. Unfortunately, we still see practitioners, and even […]