April 15, 2021
You’ve thought about it. You’ve sought advice. And you’re finally able to tell yourself, “it’s time to sell my veterinary practice.” It’s a big step and potentially life-changing. This article will help you to understand better what’s involved when you sell your veterinary practice.
There are five phases to selling your business: valuation, marketing, bidding, due diligence, and closing. Although timelines vary, it is safe to budget one month for each phase for a total timeline of six months.
When you tell people, “I want to sell my veterinary practice,” they are likely to ask how much you want to sell it for. Figuring out what your business is worth is called valuation. It’s an essential part of the process and helps to determine a sale price. To provide a valuation grounded in fact and research takes several steps, and the process generally takes about a month. First, data is collected, and research is conducted, followed by modeling, normalization, and finally, creating a report. This report includes a valuation of the business’s worth to help determine an asking price for you to sell your veterinary practice.
With the valuation prepared, it’s time to prepare your business for the market; this includes three items: a confidential information memorandum, a qualified buyers list, and other materials related to coming to market, including teasers and nondisclosure agreements.
The qualified buyers’ list is a look at who, or which companies, may be interested in buying your business; this might include associate veterinarians, large conglomerates, private equity groups, or a business partner.
The bid process involves several steps. First, a virtual data room is set up to accommodate document sharing. Time is then set aside for the Q&A process, after which the bid closes. The final step allows time for comparison and decision-making.
This vital stage of selling your veterinary practice involves several steps, as well. This step is completed by the buyer, with assistance from the seller. Having a good understanding of what is involved will ensure you are able to provide a pleasant experience for the buyer.
First, the provided information needs to be confirmed. This review process can identify inaccurate information, leading to the updating of old information. Once the information has been verified and updated, a site visit is scheduled, and introductions are made. The quality of earning process is an optional step and generally follows the site visit.
Finally, it’s time to come to negotiate and complete definitive agreements; this generally takes the form of share or asset purchase agreements.
The closing process is the last step in your how-to-sell-my-veterinary-practice checklist, where documents are signed, the staff are notified, and funds are transferred.
Generally, the sale of a business is kept quiet until the definitive agreements are finalized. For this reason, it is normal to notify staff of the business’s sale only after the deal is reasonably assured to go through. To be considered reasonably assured to close, the definitive agreements need to be signed and conditions removed. Once any agreed-upon conditions have been met and dealt with, staff and vendors are notified. The final step is a full accounting of all inventory, which is sometimes completed by a third party. Finally, funds are transferred, and the sale is complete.