Many of the veterinary practice owners VetEvolve engages with are waiting for the right moment to sell their practice. Although it may seem like a good idea in your larger plan to hold onto your practice until closer to retirement, there are a number of benefits to choosing to sell your veterinary practice now.
With inflation hitting every business hard — including veterinary practices — and fees skyrocketing for labs and vendors, it has been challenging for veterinary owners to keep their prices competitive while continuing to drive revenue growth. Add to this a nationwide veterinarian shortage forcing practices to operate short-staffed and making it difficult to hire, and the complex landscape of owning a veterinary practice now starts to come into full view.
With the direction the economy and the veterinary industry are headed, the challenges veterinary owners face today only stand to become more difficult as time goes on. Selling a veterinary practice now rather than later can help to drive sustainable practice growth faster, and free up your money for investment so you can achieve financial freedom and have a larger retirement income sooner.
From here on, the challenges of combining practice ownership responsibilities with clinical work will only increase. Grow the next stage of your veterinary career refocusing on clinical time and partnering with VetEvolve which is skilled in the rest of it.
Below is an overview of the reason why now may be the time to sell your veterinary practice instead of later.
If You Need Support
As discussed above, owning a veterinary practice in today’s landscape is no easy feat. Navigating hiring, lab contracts, and an increased cost of operations all pose significant challenges to growing a practice.
If your practice has fallen behind, it may be easy to think that you will catch up when things are a little easier. Every year in VetEvolve’s history, it has become more and more difficult for small business owners to operate, especially in the veterinary space. Waiting to solve significant issues can cause problems to compound in the long run, making them more difficult and costly to fix overall.
Partnering with the right veterinary practice buyer sooner in the face of several difficulties in the veterinary industry can help you have a more successful practice sale, and be a positive step for the longevity of the practice. A veterinary practice buyer may have deeper knowledge of resources available like labs and vendors, and will be able to take hiring off of your plate so you can focus on continuing to provide exceptional pet care.
If You Want to Invest in the Practice’s Buyer
While the economy is headed in the wrong direction, you can get on the right side by selling your veterinary practice sooner rather than later. If you plan on reinvesting into the group you want to sell your practice to, a sooner investment is better due to the time value of money.
To properly understand the time value of money, let’s run through a quick example of calculating future value. The future value equation is FV = PV x (1+i)n, where FV is future value, PV is present value, i is the interest rate per period, and n is the number of periods. For the purpose of this example, let’s imagine you’re investing $10,000 with a 5% interest rate.
If you invest the $10,000 now, the value of that $10,000 in 5 years would be FV = $10,000 x (1 + 0.05)5, or about $12,763. In ten years, the value of that $10,000 would be FV = $10,000 x (1 + 0.05)10, or about $16,289. So in ten years’ time, $10,000 uninvested will be more than $6,200 less than $10,000 invested ten years earlier. As time goes on, your money will continue to grow exponentially, so the sooner you start investing, the better.
While many practice owners want to hold onto their practice until closer to retirement age, younger practice owners may benefit financially from selling earlier and investing back in the company that bought the practice. In this way, owners are able to continue to support the growth of their practice without the burden and risk of practice management in a complex veterinary environment.
If You Want to Have Financial Freedom (And More Free Time) Earlier
Having financial freedom at a younger age and removing the burden of practice ownership from your plate can help you recenter on larger life goals. Selling a veterinary practice is a complex decision for owners, but it can also offer a great deal of freedom for your future post-sale.
With the cash purchase price immediately following the sale, you will be able to have partial financial freedom quickly. Adding in partial time freedom from having fewer duties and more time off, you will be able to take more breaks, avoid or treat burnout, and focus on the parts of your life outside of work that are most important to you.
Consider what you would do with a retirement income in your 40s or 50s versus your 60s or 70s. If you want to travel, explore, and live an active lifestyle, having more liquidity younger may be the right move for you. Selling earlier can mean getting halfway to fully retired and fully financially free at 40 or 50 versus later in life.
By selling your veterinary practice now, you will not only have the opportunity to invest earlier, but you can experience financial freedom at a younger age. With the added support of new practice owners, you will also be able to re-balance your life between your personal and professional goals.
Talk to VetEvolve About the Options for Selling Your Practice
If you are ready to discuss the options for selling your practice, connect with VetEvolve. It is never too early for low-pressure initial conversation, and we will always keep discussions with practice owners 100% confidential.
To schedule a meeting, reach out to VetEvolve here. Or, if you want to learn more about what you can do now to ensure a successful practice sale in the future, read here.