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When listing your veterinary business for sale, your primary focus is often finding the right buyer, which is an entirely logical process. However, preparing for the moment when a suitable buyer is found is also crucial.
Almost every buyer and their advisors—solicitors and accountants—will conduct a due diligence process on your veterinary business and ask questions to scrutinise your business thoroughly. Preparing for this process well in advance can save time and money, expedite the transaction, and demonstrate transparency to the buyer, instilling confidence in all parties involved.
If you’re unprepared for the due diligence process, the worst-case scenario is that a deal can fall through due to the lengthy process. Both buyer and seller can experience deal fatigue and become frustrated with the volume of required details. Legal and accounting costs can also escalate significantly due to the extensive back-and-forth communications.
So, why not prepare everything in advance before a buyer is found?
Preparing all necessary documents and information beforehand ensures a smooth, efficient, and transparent sale process. This proactive approach not only facilitates a quicker sale but also enhances buyer confidence, potentially increasing the value and attractiveness of your business.
Being transaction-ready will also weed out time-wasters as their questions can be immediately answered rather than over several weeks, so gauging how serious their intent is is easier.
Most business sale transactions depend on the buyer securing financing to complete the purchase. Securing finance requires finance brokers and lenders to thoroughly assess the transaction’s validity before approving the necessary funds. How a business is presented to a lender can significantly impact whether a loan is approved, rejected, or renegotiated. You can facilitate and expedite the financing process by presenting your business in a compelling and easily understandable manner.
It’s not uncommon for a buyer’s lawyer to lack experience in the veterinary sector. They often manage transactions across various industries, which means they may not have the necessary understanding of the nuances in your field. By compiling all required information into a coherent suite of documents, you can provide the buyer’s lawyer with the necessary knowledge, thereby expediting the transaction from a legal standpoint.
Many of us trust our accountants and value their advice, which is beneficial if they are experts in the veterinary profession. However, many accountants lack specialised knowledge and may not provide sound insights into your situation’s potential. Making sure you are presenting all the opportunities your business offers, not only to the buyer but also to their advisors, will help get everyone on the same page.
When a private buyer becomes interested in a veterinary practice, they will ask questions about aspects of the business they understand.
These questions might include:
You’re probably familiar with these questions as they’re the ones you routinely ask about your business. However, providing individual answers to these questions can take weeks, as buyers may only ask some at a time, making the process painful and drawn out.
Since we know the type of questions a buyer will ask, collating this information upfront is a great idea. It can also help distinguish genuine buyers from those who are just window shopping.
Selling to a corporate group can offer several benefits, the most significant being that they often pay substantially more for a business than a private buyer. However, you should anticipate a rigorous due diligence process involving approval from multiple parties, including external accounting firms. Completing Due Diligence spreadsheets before engaging with corporate buyers will expedite the transaction and impress decision-makers and advisors evaluating your business.
Not everyone prepares thoroughly in advance of finding a buyer for several reasons:-
At Ray White Practice Sales, we invest in thoroughly preparing a business for buyer inquiries. We conduct a comprehensive normalisation of your accounts and ensure all financials, lease documents, and other crucial information buyers seek are up to date.
Unlike many brokers who act more like “dating agencies”, merely introducing buyers and sellers before stepping back, we remain committed to guiding you through every step of the process. However, our focus is on finding the right buyer, negotiating optimal outcomes for you, and preparing due diligence is a task that demands dedicated resources and a considerable time investment.
Finding a buyer and agreeing on a deal is an exciting milestone. However, the excitement can quickly fade if, four months later, you’re still trying to finalise the sale as the buyer and their advisors continue to request additional information.
To help you prepare for the due diligence process, Ray White Practice Sales has developed a spreadsheet we would be delighted to send you to help you on your sales journey.
If you’re interested or would like to know more, email me at carl.burroughs@raywhite.com or call 0416 190 000.
Carl Burroughs has been at the forefront of professional services business development in Australia since 2001. His marketing company, Integrated Dental Marketing (IDM), has helped hundreds of dental practices achieve their goals through proactive marketing and advertising campaigns. Carl has personally consulted with many of the dental corporations and groups that have emerged within the profession over the past 20 years. More recently, Carl co-founded Ray White Practice Sales, which is a brokerage service dedicated to helping the Veterinarian and Dental sectors. Although still in its first year of operation, Ray White Practice Sales has consulted with dozens of Vet Practices around Australia and helped achieve outstanding outcomes for the Vet Practice owners they represent.
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