When is the Best Time to Sell a Veterinary Practice?

In the unpredictable financial landscape of 2021, it’s vital to know when the ideal time is to cash out on a profitable investment. Your veterinary practice may be a place that you love, but it’s an investment first and foremost. When you decide to sell your veterinary practice, you may benefit from people’s willingness to pay a premium depending on whether you’ve strategically positioned your practice. 

A few indicators will tell you whether now, or sometime in the near future, is the right time to sell your veterinary practice and get a satisfactory return on your investment. 

Favorable Interest Rates Are Tempting and Corporates Will Pay a Premium 

Because of the pandemic, interest rates have been plummeting across the board, leading to increased demand for acquiring profitable businesses, including veterinary practices for sale. As mentioned, people are willing to pay a premium because attractive interest rates increase the long-term benefits of investing in new businesses. Long-term fixed rates are topping out at around 3 or 4 percent resulting in decreasing payments and interest costs while boosting investment security. 

If you’re looking to sell your veterinary practice, now could be the perfect opportunity as interest rates will likely remain reasonably low for some time. This means that a potential purchaser will pay a premium knowing they will have to pay less in the long run. Corporate veterinary practices have been rapidly expanding and paying a premium for existing veterinary practices for sale. You can get top dollars for a sale right now. 

Knowing Your Location 

If you are popular in your location, then now or the near future may be the best time to sell. Prospective buyers will find you more attractive when they know that you’re the go-to practice in your town or neighborhood. It also helps if your veterinary practice has a good reputation, including top-quality equipment, a strong team, and other attributes that make it appealing to buyers. 

It will be easier for prospective buyers to justify to lenders that your practice is worth the investment once they know you have these attributes. 

Tax Planning May Be Easier 

With lower interest rates and borrowing costs for prospective buyers, the value of veterinary practices will skyrocket. Because borrowing costs are lower, the net return after interest costs for buyers will be more attractive. The rate of return that veterinary practices for sale offer are higher than alternative investments like savings accounts and bonds. 

You can also get yourself a nice net return with respect to tax as there are sale methods whereby you can reduce your frictional tax costs. Because your practice is desirable to buyers, they are more willing to structure the sale to your benefit. 

Looking for maintenance services for your veterinary practice? Contact EVCOR today to learn more about our services and how to buy/sell veterinary practices.