Buying or selling veterinary practices, including memorial services for veterinary practices as part of the total price, can seem like an overwhelming task. In this video, the presenter explains a couple of approaches to valuating a practice for the buyer or the seller.
The first approach is fair market value. This can be arrived upon in several different ways, but its basic definition is the price that would be agreed upon by a willing buyer and a willing seller.
Comps are helpful in determining the fair market value, whether they are from a few similar practices or the market in general. Data points such as revenue, profitability, income, and assets are all taken into consideration for arriving at a fair market value. This is usually the approach preferred from doctor to doctor.
The other way of evaluating a practice is an investment or synergistic value. This has no precedent or standard and is based on the appropriate price for a specific buyer. The presenter advises buyers using this approach to consider and compare many alternatives and be selective before agreeing to a deal.
If you need help with a valuation for your veterinary practice, don’t hesitate to reach out for help! Memorial services for veterinary practices is an important part of this process!