33 Q3 2021 | Animal Health Solutions
Most veterinarians understand that the value
of a clinic is a function of goodwill, the value
of your equipment, and the desirability of
your clinic and location. Unfortunately, most
veterinarians overlook one of the most critical
variables that factor into the sale of the clinic:
the office lease agreement.
The value of a veterinary clinic is largely predicated on the desirability of the location
and the terms of the office lease agreement. Many veterinary clinics are devalued as
a result of less-than-favorable lease terms, or problematic "assignment" sections
that hold practice sellers personally and continually liable after sale, and enable
landlords to unreasonably involve themselves in the sale and/or acquisition of the
clinic. It is essential that the terms of your lease agreement are properly structured well
in advance of the sale of your practice to ensure a smooth, stress-free, and profitable exit
from your veterinary practice.
If there is something the COVID-19 pandemic has taught us, it is that unexpected and
costly circumstances can impact us in the blink of an eye, and the only way to offset the
impact is by being as prepared as possible. The following are a few important aspects of
your lease to review and amend before considering a clinic transition.
Considerations to selling your clinic
What is your clinic worth? When and by whom should you have it appraised? When
should you start planning the transition? What criteria will you look for in a prospective
buyer? Will you be able to sell the clinic with enough profit to enjoy a comfortable
retirement? When should you advise your landlord that you are leaving?
There is no easy answer to all of the above, and this is just the tip of the iceberg.
