If you’re considering selling your veterinary practice, there are unique challenges to face, and preparation is key!
As the year progresses, the landscape for selling veterinary practices in Australia presents unique challenges and opportunities. For practice owners considering a sale, understanding the intricacies of the current market is essential if you want to maximise the value of your practice and ensure a successful transaction.
The impact of the current economic situation
We’re all aware that the Australian economy is under pressure due to rising inflation and fluctuating interest rates, both of which can impact veterinary practices in several ways.
Increasing operating costs
Operating costs are increasing, partly driven by the need to offer competitive wages and ongoing staffing shortages. Increasing costs have led to tighter profit margins, making some practices less financially appealing to potential buyers. It takes careful internal management to maintain profits, and closely monitoring the cost of materials and staffing levels is essential.
Financial management & stable profitability
If you are considering selling your veterinary practice, successful financial management and a clear demonstration of stable or growing profitability are more important than ever. Practices that show resilience in the face of the current economic challenges are more likely to stand out in a competitive market. A potential buyer is more likely to scrutinise your practice’s performance over the past two years than its long-term history.
Technological innovation is a major attraction for potential buyers
On the other hand, technological innovation is becoming a major attraction for prospective buyers. Practices that have successfully introduced cutting-edge technologies are more efficient and attractive in the marketplace.
Buyers are particularly interested in practices that have adopted the latest technologies, as they can offer the potential for future growth and differentiation from neighbouring practices. With numerous veterinary AI solutions available and more on the horizon, practice owners can make their practice more attractive by using them to control costs and improve efficiency in diagnostics, workflow, and customer communications.
Demand for veterinary practices remains strong.
Despite the economic challenges, the demand for veterinary practices remains strong, especially for those in well-established and desirable areas.
With corporates…
Corporate groups are as active as ever and remain a viable option for those planning an exit in three to five years. Most groups currently acquiring practices are well-established, making it easier for sellers to research post-settlement working conditions and their overall reputation. The horror stories of terrible working conditions have faded as corporates become integral to the veterinary landscape and have adapted to post-Covid workforce expectations.
And first-time practice owners…
Another particularly active market segment is the sale of smaller practices to first-time owners. At Ray White Practice Sales, we see a high demand for affordable smaller practices in metropolitan areas. We’ve observed a trend where young veterinarians are experiencing their “entrepreneurial seizure” (as described by Michael Gerber in The E-Myth) earlier in their careers than ever before.
Preparation is everything!
Given the complexities of the current market, if you’re considering selling your practice, then preparation is essential. The partners at Ray White Practice Sales have worked with the professions for the past twenty years, owning their own professional practices along the way, so they understand how to prepare a practice to achieve the very best outcome for the owner.
If you want to arrange a market appraisal or a private and confidential discussion about your circumstances, contact Peter, or Brett on 1800 032 801 or visit the Ray White Practice Sales website.
