- Do Your Homework Before Buying a Veterinary Practice
Buying an independent veterinary practice can be one of the most rewarding career moves you make — if you go in with a clear head and do your due diligence. Too many buyers fall in love with the idea of practice ownership, only to discover they’ve taken on a demanding job, not a scalable business.So how do you ensure you’re purchasing a true asset with long-term income potential and not just a 7-day workweek?Here’s a detailed checklist of what to evaluate before making an offer.
- 1. How Long Has the Practice Been Operating?
A long-standing practice usually means loyal clients, experienced staff, and steady revenue. A 10+ year history typically shows the business has weathered economic shifts and built a strong referral base. Newer practices can be attractive, but come with more risk — especially if growth has depended heavily on the seller’s reputation. - 2. What Type of Veterinary Services Are Provided?
Not all clinics generate revenue the same way. Understand the range of services offered:- General wellness and vaccinations
- Surgical procedures
- Dental cleanings and extractions
- Diagnostics (X-ray, blood work, ultrasound)
- Emergency/urgent care
- Exotic or large animal services
- Boarding and grooming
A diverse service offering can improve client retention and average revenue per visit.
- 3. Are the Financials Clean?
Get CPA-reviewed financials for the past 3 years:- Profit & Loss statements
- Balance sheets
- Tax returns
- Monthly production and revenue by provider
- Payroll and staffing costs
Clean books reflect good management. Sloppy or inconsistent reporting may hide issues like overstaffing, poor pricing, or unpaid receivables.
- 4. Production and Revenue Trends
Look at trends over the last 36 months:- Is revenue growing, declining, or flat?
- How reliant is the clinic on the seller’s caseload?
- What is the average revenue per client?
- How many active clients are there?
- Are certain services underutilized?
A healthy practice has consistent client volume and a balanced income stream.
- 5. What’s the Seller Actually Making?
Go beyond the reported salary. Calculate total owner benefit:- Wages and distributions
- Personal expenses (vehicles, travel, CE)
- Family on payroll?
- One-time or discretionary expenses
This shows the real cash flow you’ll have to pay debt, reinvest, and support your lifestyle.
- 6. Is It Bankable?
If you’re financing the deal, the bank will want to see:- Strong Debt Service Coverage Ratio (DSCR)
- Verifiable add-backs
- Consistent historical collections
- Transition support from the seller
- SBA or conventional loan eligibility
Weak cash flow or unclear earnings can tank financing. Address those before making an offer.
- 7. Local Competition and Demand
Know the market:- How many clinics are nearby?
- Pet ownership and population growth in the area?
- Are nearby clinics full, closed to new clients, or growing?
- Any underserved niches (urgent care, exotics, etc.)?
Local dynamics influence your future ability to grow.
- 8. Client Base and Revenue Drivers
Look closely at the income engine:- Number of active clients and visits per year
- Revenue per visit and per client
- Wellness plans or membership models?
- How many clients come from referrals?
- How sticky is the client base to the seller?
Strong recurring revenue makes your transition smoother.
- 9. Equipment, Facility & Software
Equipment can make or break operations:- Condition of surgery suites, dental machines, imaging, kennels
- Practice management system in use (e.g., AVImark, eVetPractice, Cornerstone)
- Paperless or manual records?
- Facility layout, size, and lease terms
- Room for expansion?
Budget for upgrades if needed.
- 10. Transition and Team Retention
Ask:- Is the seller staying on temporarily?
- Will techs and receptionists remain?
- Any key employees with non-competes?
- How is morale?
- Will clients stay after the owner leaves?
The smoother the handoff, the stronger your early cash flow.
- 11. Your Growth Plan
Think beyond day one:- Can you expand hours, services, or staff?
- Add specialty services or mobile visits?
- Boost marketing or referral programs?
- Is there room for a second doctor?
Growth opportunity = long-term value.
- Final Thought: Don’t Rush the Purchase Collar
Buying a veterinary practice is about investing in a future that fits your goals and your life. Ask the tough questions, and walk away if the numbers don’t make sense.Thinking about buying a veterinary practice?
Let’s talk. We help buyers evaluate opportunities, structure financing, and buy with confidence.
US Medical Funding
Don’t Buy a Job on Four Legs: Read This Before You Buy a Veterinary Practice!
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