Building and managing a veterinary business from scratch can be challenging. It takes a lot of effort, hard work, and dedication. But once the practice grows, the owner can enjoy their return on investment. But sadly, unforeseen circumstances can force the veterinarian to sell the business early. Deciding to sell their veterinary business can be tough and emotional for the veterinarians after so much investment, but it might be the best available option. There are several reasons veterinarians would sell their veterinary practice other than part of a retirement plan, such as,
- Disability or illness
- Alternative entrepreneurial adventures
Disability Or Illness
What happens if you get in, say, a snowmobile accident, suffer a severe injury and can no longer go to work, let alone stand behind the counter? If you are struck with a disability, you might be able to manage your business, but you might not be in your business. As well, many vets who suffer ill health in whatever form find that they simply do not have the energy, stamina or desire to continue being involved with their practice. If corporation already has an exit strategy, makes it all the easier for them when and if they decide sell its veterinary practice.
Death is another common reason why a veterinary practice is sold. The death of a veterinarian will have the loved ones take over the business. If there are no capable hands to handle the business appropriately, they result in closing or selling the practice. There may also be legal proceedings regarding mortgage loans or other debts that may require that the business be sold.
Running a veterinary practice involves a lot of hard work and long hours. This can be very stressful and physically and mentally draining. Over time, the veterinarian may experience burnout and be tempted to give up on the business. Even the most positive and passionate veterinarians can burn out with time and think of walking away. As a veterinarian, it is even worse if you are not getting the desired return on investment for all that stress. You may choose to sell your veterinary clinic and cut your losses. Preparation in advance, can ensure you don’t have to.
The dissolution of a marriage can be, and often is, a messy affair. Sometimes the clinic is own jointly with a souse – and this can get complicated. Clearly, you will want and need the advice of a competent family lawyer in the event of a divorce, but you will also very likely need to have a sound estimate of your business’s value, even if you have owned it outright since before the marriage. In the case of joint ownership, there is the possibility that one of the parties will opt to buy the other out. But this often does not happen. Why? Because the value of the practice is so high that neither side has the capital to buy the other out or the means or desire to take on the debt needed to do so. In such cases, a sale of the veterinary practice is often unavoidable.
Disputes between shareholdersA lot of veterinary practice sales arise due to shareholder disputes. These often occur because one or several parties want to exit the business and the other shareholder or shareholders cannot or do not want to raise the capital needed to buy them out. As with similar situations in divorces, a sale transaction becomes inevitable, even if one or some of the shareholders do not want to sell.
Sometimes, veterinary practitioners may want to explore other more exciting ventures and sell their vet practice. This could affect their concentration on their veterinary practice. To save the business, they may result in selling it to someone else who can devote more time to making it grow.
There are several other reasons why veterinary practitioners sell their practice. However, it is best to know its actual value before selling your practice. This way, you avoid selling below market value. Enterprise Valuators Corporation (EVCOR) is a value specialist devoted to helping veterinarian owners identify aspects of their businesses that build their value. Ensure you reach out to them to help evaluate the value of your practice.