- N is for… NEW START-UP. Atempting prospect for many, as this will avoid sizeable goodwill payments. But bear in mind that new starts are traditionally very tough to get off the ground, so it’s worth thinking about what “niche” you can offer which is currently not available locally. Do seek independent advice in terms of property location and change of use and the all-important business plans and forecasts which will be.
- O is for… OWNERSHIP. Do you set up in your sole name, partnership, limited company or as an LLP? Quite often we see a practice owned under one structure and the property another. The advice of an accountant will need to be sought here as everyone’s circumstances are different and you want to be certain you’re setting up the most tax-efficient and flexible structure.
- P is for… (Financial) PREASSESSMENT. A commonly asked question by many new purchasers is, “How much can I borrow?” The answer though is different depending on individual circumstances. By asking a few straightforward questions, your business adviser should be able to provide you with a specific answer and point you in the direction of suitably sized practices. And knowing this up-front will almost certainly demonstrate to both sales agents and vendors that you are a serious business prospect.
- Q is for… QUESTION. When assessing practice sales particulars, bear in mind they have been prepared to reflect a practice in the best possible light. Ask the vendor and sales agents questions to cover any aspects you are unsure of or which appear to be missing and also prepare your own adjusted profit figure (referred to often as EBITDA) to reflect what the practice would look like under your ownership rather than relying on the agent’s figure.
- R is for… RESEARCH. Viewing a practice is essential (and your conduct and attitude during this visit will often make or break whether your offer is accepted – remember it is a seller’s market and what you do or say during the viewing makes a huge difference). In advance of a viewing, ask the agent any questions you may have around the financials (rather than asking the vendor direct during viewing) and also check out local competition. It’s also worth spending a few hours looking around an area in advance or after your viewing to “check out” the neighbourhood.
- S is for… SAVINGS. In most cases for a first-time buyer you will be expected to contribute from your own funds towards a purchase. As a rule of thumb, 10% should be budgeted for most purchases with 90% coming from the banks, although if you could contribute more it would reduce your loan commitment and monthly outgoings.
- T is for… TIME. On average a veterinary sale/purchase should take maximum four to six months. Some lawyers will tell you it will take much longer, but it shouldn’t. Challenge them to work within a four- to six-month timescale.
- U is for… USEFUL CONTACTS. Build a team of experts around you to help you when looking to purchase, during the purchase process and also post-purchase to ensure you maximise the potential of your business. Your accountant, solicitor, business adviser, bank manager and recruitment company should be viewed as part of your team with whom you should speak on a regular basis.
- V is for… VALUATION. In most cases an independent bank valuation will be required to back up and verify the goodwill and freehold purchase price. Occasionally an element of negotiation is needed if these figures differ and this is where your independent adviser can guide you in your discussions with both bank and sales agent to ensure a price is agreed which works for all.
- W is for… WILLS (and future planning). You are acquiring a sizeable asset so it is essential you review your Will and potentially consider trusts to ensure a tax-efficient structure. Life and protection cover should also be reviewed to ensure any borrowing is repaid in the event of death or serious illness.
- X is for… X MARKS THE SPOT. When looking to purchase, you should make an ideal wish list for your “perfect” practice. This will help you when considering sales particulars and viewing practices to ensure you find the “right” one.
- Y is for… YEEHAH! The sound you will make when you eventually complete on the purchase of your practice and know you are now fully in control of your own destiny (it is this lack of control which is pushing so many veterinary surgeons towards purchase).
- Z is for… ZEALOUS. You will need to be dedicated and almost fanatical about your business. You also need to keep investing in yourself going forward and regularly attend business-related seminars and courses.
