Are you planning to sell or purchase a veterinary practice? If you’re not sure what is required of you financially and legally to buy or sell a practice, I suggest putting together an advisory team featuring a lawyer, accountant and banker who can ensure your purchase/sale goes smoothly. And here are a few tips and insights to consider before you even start the process of buying or selling, (based on my years of specializing in supporting veterinary practice sales).
Selling
Before selling a veterinary practice, it’s always a good idea to give your accountant plenty of notice. I request a full two years, as that gives me time to ensure that shares in the practice qualify for the capital gains exemption. If this is worked out in advance, finding a potential purchaser is cause for excitement, not concern. Rather than risk being offside a required 24-month test (for shares to qualify for exemption), you can ensure that you’re in the clear. Why risk deferring a perfectly good deal when you can secure it with some relatively painless preparation?
Buying
Purchasing a practice can be a good opportunity for a young vet who wants to be a business owner. In spite of various changes in the market, these practices are still extremely profitable. While there are some philosophical differences among younger, millennial vets—they tend to be more hesitant about long-term investments—this also presents exciting new opportunities. For example, many veterinarians are now participating in staggered sales, selling a 50 percent interest in their practice at one point and the other 50 percent a couple years later. A complete sale may seem easier, but staggered sales allow veterinarians to exercise far more control over the transaction.
Whether you’re buying or selling a veterinary practice, there are many options available. Getting a great deal is always possible, but only if you consider all the variables.
Ed Mitukiewicz, CPA, CA, CFP is a tax partner at the Elora office of Collins Barrow. He is a member of the Canadian Tax Foundation and an associate member of the Ontario Veterinary Medical Association. Ed has assisted veterinarians across the province with incorporation decisions, practice acquisition, veterinary corporate reorganizations and planning for practice dispositions.
Want to get in touch with Ed?
Connect with him by email at {encode="emitukiewicz@collinsbarrow.com"} or on LinkedIn.
*Expert Series blog posts are the result of a collaborative effort between partners and the National Marketing Team.
Related content
