Better Preparation = Higher Valuation More Money

Working with you and your financial information, I have the proven experience to help you achieve a thorough, fact-based and higher valuation for your practice.

How to create higher valuations.

Depending upon the accuracy and completeness of its information as well as the experience and due diligence of the valuator, the same practice could yield very different valuations. Based on my in-depth experience as both a practice-owning veterinarian and consultant, I know how to value your practice and look at the practice management system to achieve a maximum value.

Among other analyses, I’ll reconstruct financial statements and tax returns. I’ll make separate calculations for owner compensation in salary and benefits as a staff clinician as well as owner compensation for practice management. Compensation taken above these amounts can be added to net adjusted income (“excess earnings”) in addition to non-cash expenses such as loan interest, certain taxes, depreciation and amortization (EBITDA) may be credited to owner as “Owner’s Discretionary Income”.

Excess earnings are most important in valuing your practice.

The historical excess earnings trend is the most important financial variable in determining your practice’s value—not gross revenue as commonly thought. Typically, a practice’s future earnings will reflect its actual performance in the current and prior years and thereby serve as a reasonable base to which incremental changes reflecting economic and business assumptions can be applied.

The affordability of buying a practice depends on the excess earnings available to pay the new owner a competitive professional income, cover the debt service costs and produce a reasonable return on investment.

Goodwill is also crucial. And you need to know what to look at.

Goodwill is also highly important to the valuation process for closely-held professional businesses. These intangible assets generate value over and above the value of a practice’s tangible assets.

Business goodwill for a veterinary practice encompasses a range of intangible assets such as the practice’s location and facility, trade area demographics and competition, market reputation, advertising and marketing, size and expertise of the professional staff, ability to attract and retain clients, scope of services and a proven record of generating cash flows from a stable client base. Working together, we’ll put a value on each of these.

Call Dr. Randy Carsch, DVM today!
He Will EARN Your Business!

We are now] set up with an employee review process, new forms, internal marketing, pricing and fee structure, and…standardized estimates. This has resulted in increasing my ACT over 45%, allowing me to hire an associate 2 days a week.

Bruce T. Williams, DVM
Renton Veterinary Hospital, Renton, WA