A veterinary practice appraisal is a tool used to determine the dollar value of your veterinary practice. Such appraisals are common when buying a practice, selling a practice, merging practices, bringing in a partner, or for management, tax, and estate planning purposes.
Practice appraisals determine the value of both the tangible and intangible assets of the practice. Tangible assets include veterinary medical equipment, office furniture, and equipment and inventory.
Goodwill is an intangible asset, but is also the most important asset of your veterinary practice. Goodwill is generated by the profits of the practice and by other factors that determine whether your practice will retain your regular clients and attract new ones in the future. Goodwill is what enables you to attract another veterinarian to invest in and join your practice as a partner or enables you to sell your practice at a profit when you decide to retire.
Included in all veterinary practice appraisals done by Dr. Felsted is a feasibility (affordability) analysis that allows both the buyer and seller to see in an understandable format whether or not the cash flow is sufficient to cover debt service, taxes, and a fair salary for their ongoing work in the practice.
In addition to determining whether or not the cash flow is sufficient, the appraisal also enables the buyer and seller to understand the financial and operational strengths and weaknesses of the veterinary practice. This insight into the veterinary practice also makes a practice appraisal a good tool for strategic planning, as it enables you to identify and work on areas in your practice that need improvement.
Contact us for information about how we can help you obtain your practice goals.