Day: January 16, 2024

How to Value a Veterinary PracticeHow to Value a Veterinary Practice

How to value a veterinary practice you’re a veterinary owner, you know that figuring out how much your practice is worth can be one of the most challenging aspects of running a business. And that’s especially true if you want to sell your clinic at the highest possible price.

That’s because there are numerous data points and features that factor into a practice’s ultimate value. That’s why it’s important to work with an experienced professional who understands the nuances of a vet practice.

Finding Your Next Chapter: Exploring Veterinary Practices for Sal

There are 3 fundamental valuation methods used when determining how much a veterinary practice is worth. The first is the Income Approach, which looks at a practice’s profitability (specifically EBITDA). EBITDA, or earnings before interest, taxes, depreciation, and amortization, measures a company’s profitability by subtracting out accounting and financial expenses.

The second method is the Market Approach, which compares a practice to similar ones that have recently sold in your area. This can be a challenge because it requires accurate, reliable data about veterinary practices that have been publicly-held and sold in your market.

The final method is the Asset Approach, which focuses on a veterinary practice’s net asset value, or NAV, which is a tally of the company’s current tangible assets minus its market value for liabilities. In a veterinary practice, this would include things like equipment and inventory, the fair value of the client list, patient medical records, the intangible asset commonly referred to as goodwill, and operating capabilities and procedures.