5 Benefits of Selling a Veterinary Practice Through OMNI Practice Group
When beginning the process of selling a Veterinary practice, it’s imperative to work with specialists who have experience in selling Veterinary practices. Experienced transaction brokers can help Veterinary practice owners streamline the sale and achieve their ideal return on investment. The team at OMNI Veterinary Practice Group are specialists in this industry, and in their latest article they highlight five benefits of selling a veterinary practice through their services.
- They Are Marketing Specialists
Working with a trusted industry specialist such as OMNI Veterinary Practice Group gives sellers access to a wider array of market options. Because the company’s staff has significant experience in the marketplace, they know how to quickly locate qualified buyers and to promote the seller’s practice in high visibility markets.
- They’re Experts in Business Transitions
The specialists at OMNI Veterinary Practice Group have many years of experience in business transitions. They’ve helped hundreds of sellers to achieve their ideal objectives through the selling of their Veterinary practice. This means they can guide sellers throughout the entire process, from finding qualified buyers to completing negotiations and due diligence alongside the buyer’s legal team.
- Frees Up the Business Owner’s Time
The work of Omni Veterinary Practice Group helps to support business owners in running their organization throughout the negotiations. They won’t have to take time away from their business to review the marketplace or to deal directly with buyer negotiations. They can leave all the work to the team at OMNI Veterinary Practice Group. This also means that they can retain the value of their company throughout the transaction, helping to support the on-going growth of the company and meet the needs of their patients while OMNI Practice Group responds to all transition requirements.
- They can Prepare the Business for Sale
Because of OMNI’s experience in the marketplace, they know what it takes to prepare a company for sale. They can pinpoint structural issues within a business and help the seller to eliminate these structural issues before the sale begins. They can also highlight the elements the buyer will be analyzing during their due diligence, and complete processes areas such as the completion of all equipment paperwork to ensure every part of the transaction is in place before the sale begins.
- They Seamlessly Close Business Transactions
The length of time a business transaction takes to complete can have a significant impact on a business owner and their finances. The team at OMNI works to reduce the timeframe of the sale and streamline the closing process. They ensure each element of the sale is completed according to the seller’s timeframe, and help reduce closing costs to ensure optimal value for the business.
Specialists for the sale of Veterinary practice businesses, OMNI is committed to working with sellers across the marketplace in finding qualified buyers for their practice. To learn more on the company and their services, contact their office team today at 877.866.6053.
Selling Your Veterinary Practice Does NOT Mean You Have to Stop Practicing
5 Reasons to Hire a Veterinary Practice Specialist During the Veterinary Business Sale Process
1. Database of Buyers
Those within the marketplace will have access to a comprehensive database of practice buyers. They will have completed all due diligence on those capable of completing the transaction and have developed comprehensive business relationships within the industry. This can help streamline the business transaction and ensure sellers receive a lucrative price for their business.
2. Full Access to Marketing Channels
Specialists within the veterinary practice marketplace can help enhance sale strategies through effective marketing channels. They know the areas potential buyers look for buying opportunities and can craft refined marketing strategies designed to appeal to specific types of buyers. Their access to these highly effective marketing channels also means industry specialists can help maximize the value of the business and reduce sales roadblocks.
3. Help Selecting a Transition Plan
Working with a trusted veterinary practice sales expert also means that business owners can select their ideal transition plan when selling their company. For example, they may wish to only sell part of their practice and remain the owner of the rest of the company. Specialists within the industry can help coordinate this process and ensure that the full value of the entire organization is protected during the sale. Veterinary practice sales experts can also help coordinate sales to corporate groups by individual owners, advising the owner on their rights within the process and helping to complete the complex documentation involved within the sale.
4. Direct Access to Sales Knowledge
One of the leading reasons so many veterinary business owners are now choosing a specialist for the sale of their practice is that specialists can answer questions based on direct knowledge within the industry. They can help the practice owner decide what to do with their equipment after the sale. for example. They can also answer questions related to post-sale staff needs, as well as how to communicate with staff directly during the sale process. This eases the sales transition and ensures business owners also have an expert available to consult with throughout.
5. Creating a Valuation for the Company
By determining the value of the company, veterinary practice experts can ensure their client achieves full value for money. They can use their industry knowledge, as well as their understanding of the local marketplace, to ensure the company is valued at a level that will attract high-quality buyers and ensure a fast, and profitable sale.
By working directly with a trusted veterinary practice sales expert, veterinary business owners can maximize the return for their business investment. To learn more, speak with the team at Omni Veterinary Practice Group directly at 877.866.6053 or email info@omnipg-vet.com.
Buyer Hot Buttons
In this article, we will review the practice attributes that today’s buyers are paying close attention to – their “Hot Buttons”- as well as our recommendations on how to address those Hot Button issues in order to make the practice as valuable and marketable as possible.
Hot Button #1: Asking Price. Today’s buyers are sophisticated and very well informed about the market value of veterinary practices in their area. If the practice is initially priced well above its true market value, it will take much longer to sell. Even if you find a buyer who is willing to offer more than the market value, overpriced practices will ultimately end up selling near their true market value once the buyer’s advisors and practice lenders begin to weigh in on the practice purchase price.
Solution: Set an asking price for the practice within the normal range of market values in the area. This is accomplished by conducting a thorough analysis of comparable sales in the local market. Be sure to engage an experienced, local broker to accomplish this task.
Hot Button #2: Practice Location. We find that the majority of buyers are looking to purchase a practice primarily in urban/suburban areas. Therefore, it usually takes longer to sell a veterinary practice in a rural area. In addition, most buyers prefer a retail-type space with good visibility, although an attractive professional building location is also a viable option.
Solution: Utilize a long-term, strategic analysis of your current location. If the area is “going downhill” or the building in which the practice is located does not have the type and volume of tenants it once did, consider the costs vs. benefits of relocating your practice to a better area or a different type of building. If you are 7 to 10 years away from transitioning your practice, the benefits and potential gain in practice value can often justify the investment required to relocate.
NOTE: If your practice is in a rural area, the other “Hot Buttons” discussed in this article become even more important to buyers.
Hot Button #3: Equipment and Aesthetic Appearance/Cleanliness. Because most buyers have been practicing for less than 5 years, they would prefer to utilize newer equipment and digital technologies in their practices. The practices that have digital radiography and chair-side computers tend to sell quicker and at a higher price than their counterparts.
Also, first impressions are important, so practices that do not have a positive “curb appeal” when buyers walk in the door for the first time can lose value and take longer to sell.
Solution: Just as with your location analysis, it is imperative to have a long-term plan for keeping your equipment and facility up to date. The more time you have until the practice sale, the easier it will be to garner a sufficient return on investment from purchasing new equipment. We recommend that you upgrade your equipment 3 to 5 years prior to selling your practice.
In regard to aesthetics, we again recommend updating your office décor and finishes 3 to 5 years before the sale to initiate a positive response from potential buyers. Hiring an interior designer or remodeling the practice can enhance practice value and marketability.
Hot Button #4: Practice Cash Flow. Most buyers are looking for practices that generate sufficient net cash flow (after operating expenses) to cover their personal living expense needs, which can be substantial considering that many potential buyers have student loan debt in excess of $200,000. Additionally, the ability for a buyer to obtain financing for the practice purchase is heavily tied to the historical cash flow of the practice.
Solution: Cash flow is related to both expense control and revenue enhancement. Start by ensuring that your major expense categories (staff payroll, veterinary supplies, and lab fees) are within industry norms. Next, make sure that you are doing everything possible to enhance practice revenue, increase case acceptance, attract new patients, and retain your existing patience base.
Hot Button #5: Type of Patient Base. When we sell a veterinary practice, our experience has been that the majority of buyers are looking to acquire a practice with a fee for service and/or PPO patient base. DMO patient bases are definitely waning in popularity and, with the recent changes to Medicaid reimbursement, a patient base with a significant Medicaid component may be viewed negatively by some buyers.
Solution: With the help of a practice management or insurance consultant, conduct an analysis of the insurance plans that you currently accept along with those that are prevalent in your market area to determine if it is worthwhile to drop some plans and possibly add others. If handled properly, these changes may help increase new patient flow, decrease practice overhead, and make your practice more valuable and marketable to potential buyers.
If Medicaid accounts for the majority of your patient base, you have likely already experienced a significant decrease in revenue and should consider developing a long-term strategic plan to build a fee for service and/or PPO patient base. A location/demographic analysis will be essential to identifying potential opportunities in your area.
Hot Button #6: Active Patients & New Patient Flow. Active patient count and new patient flow are extremely important to buyers in evaluating the health and goodwill of a practice. We have often heard that, on average, patients switch Veterinarians every seven years. Therefore, an easy way to determine if your patient base is growing or declining is to divide your number of active patients (seen in the past 24 months) by seven and compare the result to the number of new patients you have seen in the past year. If the number of active patients leaving your practice each year is larger than the number of annual new patients, then your patient base is shrinking and may be cause for concern.
Solution: Conduct a periodic analysis of your active and new patient counts to evaluate the health of your practice and identify trends that may need to be corrected. Enhancing the patient experience and maintaining an effective recall system can ensure maximize patient retention, while implementing an internal marketing strategy (asking for referrals from existing patients) and an effective external marketing strategy (such as a website or direct mail) can improve new patient flow. Hiring a practice management consultant on a periodic basis can help you and your team to stay on track in these areas.
Hot Button #7: Upside Potential. When an acquisition opportunity provides the buyer with the potential to increase revenue through making minor changes in the practice, the buyer will typically be more inclined to offer full market value for the office. Retaining services that are being referred to specialists, increasing operating days or hours, and implementing relatively simple internal or external marketing strategies are all attractive ways for a buyer to increase revenues and patient flow.
Solution: While you should take advantage of the revenue potential of your practice prior to the sale, be sure to identify and quantify any opportunities that you have not pursued to your practice broker and potential buyers.
By understanding the factors that influence a potential buyer’s perception of value, making the changes necessary to maximize practice value and marketability, and planning ahead, practice owners can ensure that they will be in a great position when the time comes to sell their most valuable asset.
-Rod Johnston, MBA. CMA