Opportunities
Ann Arbor Area Vet Practice w/49% Profit Margin
Sold
Owner is willing to stay on up to 3 years!
Specifications
Excellent care, a large client base, and increasing sales are hallmarks of this dynamic and efficient vet clinic. Serving clients within a wide radius of the Ann Arbor/Jackson, Michigan area, this clinic has 4,200 square feet of space including 3 exam rooms, a lab, a radiology room, treatment room, surgery, isolation, break room, and pharmacy. Over $240,000 in equipment enables this clinic to handily rise above the competition. Working with only 4 staff members in addition to three veterinarians, this is a streamlined operation.
Focused on veterinary care for dogs and cats, the clinic offers general care, dental services, surgery, digital radiology, and prescriptions through their pharmacy. In addition, there is a boarding room with space for 9 dogs and 7 cats earning over $20,000 annually.
The owner of this business is currently practicing an average of 25 hours per week. The second veterinarian works an average of 22 hours per week. The owner would also like to stay on for 1-3 years after the sale, fostering confidence in the transition and aiding the new buyer in continuing high-quality services.
Business Highlights
- Year Established: 2000
- Location: Jackson/Ann Arbor area
- Service Area: Wide radius around clinic
- Clients: Dogs and cats
- Customers: 4,000 active clients of all ages and income levels from a wide radius from the clinic
- Services: General vet services, dental cleanings, surgery, radiology, pharmacy, counseling, boarding
- Building: 4,200 sq. ft.: reception, exam rooms (3), pharmacy/lab, accessible restrooms, kitchen, office (2), treatment room, surgery, radiology room, isolation, kennel room, break room. The building and land are for sale outside the sale of the business.
- Reason for Selling: Exit strategy
- Employees: 3 Vets, 1 Tech, 2 Receptionists, 1 Kennel
- Seller Training Period: Seller will remain on staff for 1-3 years, or as negotiated
- Growth Opportunities: Increase hospital/doctor hours, add emergency services, increase radiology, increase boarding, increase marketing
- Current Owner’s Responsibilities: Veterinarian 20 hours/week
Financial Highlights
- List Price: $1,800,000
- Gross Sales:
- 2018: $956,234
- 2017: $825,062
- 2016: $687,330
- Cash Flow:
- 2018: $371,886
- 2017: $215,825
- 2016: $173,187
- Assets Included in Purchase*
- Equipment: $240,000: General, surgical, and radiological vet equipment including digital x-ray
- Inventory: $19,000
- A/R: $2,000
- Intangible Assets: Well-respected clinic, good social media reviews, reliable staff, large client base with many new clients annually, long-term clients
*amounts may vary
Cash Flow Analysis
| Description of Financial Statement | P&L Statement | Tax Return | Tax Return | Tax Return | Notes |
| 2018 | 2017 | 2016 | 2015 | ||
| GROSS SALES | $956,234 | $825,062 | $687,330 | $689,419 | |
| Net Income Shown on Financial Statement | $258,773 | $117,818 | $101,191 | $133,223 | |
| ADDBACKS | |||||
| Other unrelated Salaries | $16,800 | $22,000 | $19,538 | $16,783 | |
| 11% Tax on total W2 Salaries | $15,957 | $14,628 | $11,731 | $7,896 | |
| Depreciation | $0 | $305 | $436 | $565 | |
| Rent | $25,400 | $25,400 | $25,400 | $25,400 | Onward going rent would be $64,600/year |
| Lawn Care | $1,330 | $1,573 | $1,632 | $1,658 | |
| Internet | $862 | $640 | $750 | $737 | |
| Pet Expenses | $994 | $861 | $656 | $1,095 | |
| One-Time Improvements | $667 | $0 | $2,197 | $1,300 | |
| Cell Phone | $1,430 | $1,663 | $1,625 | $1,655 | |
| Auto-Fuel | $3,666 | $3,159 | $3,752 | $2,005 | |
| Health Insurance | $8,619 | $7,740 | $6,545 | $7,832 | |
| Simple IRA | $3,851 | $3,780 | $5,351 | $2,219 | |
| Compensation to Owner | $128,260 | $110,981 | $87,106 | $55,000 | |
| Replacement | $-94,723 | $-94,723 | $-94,723 | $-94,723 | |
| TOTAL ADDBACKS | $113,113 | $98,007 | $71,996 | $29,422 | |
| Seller's Cash Flow = Total Addbacks + Net Income | $371,886 | $215,825 | $173,187 | $162,645 | |
| Profit Margin | 38.89 % | 26.16 % | 25.20 % | 23.59 % |
Typical Clients
- 2,000 active clients
- 5,000 clients in the database
- 293 new clients in 2018 Jan. – Oct.
- 313 new clients in 2017
Specific information regarding clients is available upon the receipt of a signed Non-Disclosure Agreement.
Services
- General care
- Dentistry
- Radiology
- Surgery
- Pharmacy
- Boarding
Employees
- 3 Veterinarians
- 1 Technician
- 2 Receptionists
- 1 Kennel/Assistant
Growth Opportunities
- Increase doctor/hospital hours
- Include emergency services
- Increase radiology offerings
- Increase boarding
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
Cash flow is the sum of business net income plus any owner perks and any non-onward going expenses.
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.
For this business, a 2018 cash flow was used with a prescribed multiple is 4.9. With this information, the computation is as follows:
$371,886 x 4.9 = $1,822,241
The fair market value found above positions the business list price at $1,800,000.
*The Firm Business Brokerage is not a real estate brokerage and therefore the staff will not handle any aspect of the lease, sale or purchase of real estate.
Print, sign and send to:
210 N 78th St. 2nd FloorOmaha, NE 68114
Or fax to:
f 402.939.0857