Practice Valuation Essential

Posted by dcjack on March 6, 2010 under Articles |

As the veterinary practice owner looks to the implementation of a succession plan and the ultimate sale of the practice,  it strikes me as an “essential” that he or she obtain an independent valuation of the practice for a number of reasons.  First, it will provide the owner with an objective opinion of the value so as to establish a clear guide for negotiations.  Second, there is little doubt that a prudent prospective purchaser will want to review such a valuation not only for his or her own purposes for to assist in obtaining bank financing to complete the transaction.  Practice valuations may be useful for other purposes as well; for instance, in determining the quantum of life insurance to secure in order to fund the buyout of a deceased co-owner.  The valuator will need a great deal of information from the owner to  develop an opinion and will need some time to thoughtfully review the nature of the practice in order to determine the value of the goodwill; as such, engaging a expert early in the process is recommended.