Dec
13
2013

If your retirement plan calls for the sale of your veterinary practice, then improving your practice to enhance its value should be at the top of your to-do list. Potential buyers will be looking for an animal hospital that allows them to step right in and be profitable. So how does your practice measure up?

How to determine practice value
True practice value can be determined only by a professional appraiser, and should be completed at least three years prior to retirement so you can gradually make the changes needed to improve perceived worth. Your practice value is primarily based on how well your practice is managed. How many of the following key attributes does your practice have?

Profitability
To an appraiser, profitability refers to the revenues that remain after paying for: 

  • Operating expenses of the practice
  • Fair market rent (even if you also own the real estate)
  • Compensation for the doctor's work as a veterinarian

The net profits for your hospital represent the return on your investment in the practice. Buyers look for a track record of stable, high net profits, so the more profitable the practice, the higher its valuation.

Current technology
Well-managed practices are equipped with current technology that is in good repair and capable of delivering the level of health care service sought by today's pet owners. If you are behind in transitioning to newer equipment and techniques, it will likely be reflected in your practice valuation.

Attractive facility
Location, ease of traffic flow, furnishings, and decor all contribute to the ambiance of your practice and its appeal to potential buyers. Even a profitable practice will lose points in its overall perceived value if it appears outdated, overcrowded, or generally disheveled.

Outstanding service
The best managed practices demonstrate their commitment to their patients through excellent customer service that meets their clients' needs. They are often multi-doctor or team-oriented practices that support flexibility and diversity in delivering the best possible treatment for pets.

The good news is that any veterinary practice can be improved with enough time and proper planning. But before starting your upgrade plans, talk to us at Wells Fargo Practice Finance about our customized practice upgrade and equipment financing packages. As an AAHA member, you automatically qualify for preferred pricing on competitive fixed-rate loans. You'll also receive our complimentary Project Planner with guidelines to help you manage your practice upgrade. And once your practice is ready to sell, you can list it on our online Marketplace at wellsfargo.com/veterinarians.

To learn more about practice upgrade and equipment financing, just call your Wells Fargo financing specialist at 866-4MY-PAWS (866-469-7297) or visit us at wellsfargo.com/veterinarians.

 

Consult your tax advisor and/or accountant for a statement of tax and accounting rules applicable to your particular situation and for all other tax and accounting advice.

All financing is subject to credit approval.

©2013 Wells Fargo Bank, N.A. All rights reserved. Wells Fargo Practice Finance is a division of Wells Fargo Bank, N.A.

 

 

Comments (1) -

Sarah
SarahUnited States
12/18/2013 8:25:03 AM #

Well I figure that the average American that isn't going to live very lavishly would need maybe around 2,000-2,500 Dollars a month during retirement, but obviously that would/could change depending on how they choose to live. As far as picking/talking a/with financial planner, these days you have to be really careful, because some of them will rip everything you have out of your pockets. So make sure you pick the right one, here some info on how to pick the right one: www.mutualfundstore.com/.../choose-your-advisor  However, you still need to listen to your gut, and do the research needed.

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