Opportunities
Small Animal Vet with Over $500K in Sales
Sold
Specifications
For 47 years, this small animal vet near Omaha has been offering full-service hospital care and will sell nearly $140,000 in equipment along with the business. Located in a community of roughly 26,000, this practice has seen a 21% increase in sales between 2014 and 2016 and a 34% increase in cash flow during the same period. Average client visits bill from $120 to $125, with some special procedures costing $1,500. Weekly visits range from 50 to 55 per week, with emergencies seen during regular business hours.
Services range from immunization and wellness care to microchipping and nutrition counseling. All laboratory work is done in-house, and a digital radiography machine is on location for non-invasive diagnosis. Other equipment includes computers, laptops, K-Laser, stainless steel surgical tables, microscopes and more. Inventory of food and pharmaceuticals are also included, with the vet regularly stocking Science Diet and Hill’s Prescription Diet foods.
The current owner is selling as part of a planned retirement strategy. Keep up the growth with adding kennel and grooming services, or by extending service hours. Adding Saturday hours would capture the busy professional with furry friends who need care.
A 10% down payment of $35,700 would profit a new owner $42,378 after debts the first year. This is a perfect opportunity for a DVM looking to own their own practice, or for a team of DVMs to move in and grow their client base.
Business Highlights
- Years in Business: 1970, current owners since 1994
- Location: Dodge County Nebraska
- Demographics: Community of 26,000; second largest vet clinic in its area
- Clients: average 50-55 patients visits weekly charging $100-$125 per routine visit; client base 70% dogs and 30% cats
- Services: immunization and wellness care, internal medicine, dental care, digital radiology, nutrition counseling, microchipping, pharmacy and parasite control agents; laboratory work done in-house
- Lease: $2,000 per month for 4,840 sq. ft.
- Reason for Selling: Retirement planning
- Employees: 1 Vet Tech, 1 Office Aide (both are paid hourly wages)
- Hours: Mon – Fri 9am to 5:30pm; no scheduled emergency hours, but will tend to emergencies during normal business hours
- Seller Training Period: 90 days
- Growth Opportunities: Kennel and grooming services, extended hours
- Current Owner’s Responsibilities: Practicing DVM
Financial Highlights
- List Price: $357,000
- 2016 Gross Sales: $528,791
- 2015 Gross Sales: $487,936
- 2016 Cash Flow: $102,030
- Growth Trend: 21% increase in income for the past 2 years
- $155,390 worth of assets included in the purchase
- Equipment - $138,390
- 8 computers/laptops
- DVM Manager software
- Digital radiography machine
- K-Lasere
- Indexx Lab
- Isoflourane vaporizer
- 2 stainless steel surgical tables
- 6 surgical packs
- Microscope
- Shoreline kennels
- Inventory - $17,000
- Pharmaceuticals and food
- Regularly stocks Science Diet and Hill’s Prescription Diet Foods
- Pharmaceuticals and food
- Equipment - $138,390
*amounts may vary
Cash Flow Analysis
| Description of Financial Statement | Tax Return | Tax Return | Tax Return | Notes |
| 2016 | 2015 | 2014 | ||
| GROSS SALES | $528,791 | $487,936 | $417,441 | |
| % Change Over Prev. Year | 8.37 % | 16.89 % | ||
| Net Income Shown on Financial Statement | $67,100 | $49,319 | $3,394 | |
| ADDBACKS | ||||
| Compensation to Owner | $109,565 | $103,948 | $106,299 | |
| 11% Tax on total W2 Salaries | $12,052 | $11,434 | $11,693 | |
| Depreciation | $2,126 | $2,302 | $3,954 | Non-cash item |
| Interest | $908 | $1,062 | $1,554 | Non-onward going expense |
| Retirement Plan | $3,860 | $3,613 | $4,239 | Retirement plan for owners |
| Auto-Personal Use | $10,675 | $12,922 | $18,724 | Auto use unrelated to business |
| Non-Business Telephone | $7,265 | $6,308 | $5,204 | $200/mo for business telephone |
| Replacement DVM Salary | $-100,470 | $-92,707 | $-79,313 | 19% of total sales |
| 11% Tax on Replacement DVM Salary | $-11,051 | $-10,197 | $-8,724 | |
| TOTAL ADDBACKS | $34,930 | $38,685 | $63,630 | |
| Seller's Cash Flow = Total Addbacks + Net Income | $102,030 | $88,004 | $67,024 | |
| Profit Margin | 19.29 % | 18.04 % | 16.06 % |
- 21% increase in income over the last 2 years
- 7% ($40,855) increase in sales between 2015 and 2016
Services
- Comprehensive annual wellness program
- Examinations
- Immunizations
- Nutritional and behavioral counseling
- Laboratory testing as needed
- In-house diagnostic laboratory and comprehensive reference laboratory testing
- Surgical procedures
- Routine spays and neuters
- Dental and oral surgery
- Orthopedic surgery
- Wide range of other procedures with integrated pain management
- In-house digital radiology
- Dental services
- Routine cleanings
- Extractions
- Geriatric exams, consultation and laboratory testing
- Pet food supplies and premium nutrition available
- Science Diet
- Hill’s Prescription Diets
- Flea, tick, heartworm and other parasite control agents
- Heartgard
- Frontline Plus
- Advantage
- Iverhart
- Microchipping
- Emergencies – active clients can contact the office and patient’s call will be forwarded to one of the vets
Competitive Advantage
- Second largest veterinary clinic in its area
- Marketing program includes website by hibu, inc.
- Mobile optimization
- SEO optimization
- Analytics
- Hospital is an industry leader in its use of digital radiology to noninvasively diagnose pets
- Unique due to the size of its practice related to general and advanced dentistry
- Clinic has been in continuous operation since 1970 and has loyal clientele
Income Analysis
Equipment & Furniture - $138,390
| 8 Computers and laptops - $10,000 | Isofluorane Vaporizer - $3,000 |
| DVM Manager software - $3,800 | 2 Stainless steel tables - $10,000 |
| Digital Radiography Machine - $39,000 | Digital scale - $600 |
| Therapeutic Laser - $24,000 | Makita orthopedic drill with pins - $800 |
| Microscope - $1,000 | Indotrach tubes |
| Autoclave - $500 | Bags |
| Kennels - $600 - $800 | Hand dental scaler |
| Surgical Pack - $6,000 |
Employees
- Office/Practice Aide
- Employed since 2007
- $12.50/hour
- Ensures all animals in the hospital are walked, fed, watered and loved
- Keeps clinic clean
- Vet Tech
- Employed since 2010
- 14.50/hour
- Assists doctors with patients
- Monitors lab work
- Medicates hospitalized animals and oversees their welfare
Industry Outlook
- Number of veterinarians employed in Nebraska – 700+
- Hourly mean wages of around $37
- Annual mean wage of $77,410
- Nebraska is one of the top 5 states with the highest concentration of jobs and location quotients in the industry
- Projected national 10-year growth of 9% - faster than average
Growth Opportunities
- Increase social media presence
- Currently there are many positive reviews on different platforms
- Reach out to other platforms
- Instagram would be a perfect fit, showcasing the pets you see and any before and after pictures from treatment
- Animals are a huge draw on Instagram and a great way to get followers
- Regularly update existing social media accounts
- Add grooming and boarding services
- Hire more veterinarians and/or vet techs to gain more patients
Valuation Details
The Firm Business Brokerage used a Cash Flow Valuation methodology to determine the Purchase Price of the business.
The formula used is as follows:
Cash Flow x Prescribed Multiple = Fair Market Value
$102,030 x 3.51 = $358,125
Cash Flow is the sum of business net income plus any owner perks and any non-onward going expenses. The 2016 Cash Flow was $102,030.
A multiple is prescribed by a 20 question, 100-point parameter ranking system that is used to analyze the current business health. Each question is based on a scale from 1 to 5: 1 being low, 2 below average, 3 average, 4 above average, 5 high. The average of the responses sum is the business’ prescribed multiple. The prescribed multiple for this business is 3.51.
List price is set at $357,000.
Funding Example
Purchase Price: $357,000
10%Buyer Down Payment: $35,700
25%Seller Financing: $89,250
65%Bank Loan: $232,050
Seller Financing 5-year term at a rate of 4.50% equals a monthly loan payment of $1,664.
Bank Loan 7-year term at a rate of 5.25% equals a monthly loan payment of $3,307.
After business expenses and loan payments, a buyer with a down payment of $35,700 would retain a profit of $42,378, which results in a 118% return on investment in the first year!
A lender is required to have a minimum 1.5 coverage ratio for any business loans extended. At a proposed Purchase Price of $357,000 with the terms listed above, the coverage ratio is 1.71. Please note that the decision of whether to extend a loan on any particular sale belongs to the bank, and this document does not guarantee specific terms or verify that financing is available.
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210 N 78th St. 2nd FloorOmaha, NE 68114
Or fax to:
f 402.939.0857