Iowa Owner/Operator Vet Practice - Priced to Sell!
Included in the purchase of the clinic is roughly $132,000 in assets. A new owner would receive $84,000 in general DVM equipment, the majority of it purchased within the last 3 years. Nearly $15,000 in wholesale inventory will transition to a buyer, as well as around $14,000 in A/R, with 70% of it collectible.
Growth exists in adding grooming services for the current clients, as well as some boarding. The current owner previously worked with large farm animals, but due to health issues has discontinued that practice in recent years. This would be a great area for growth, as the practice is situated in farm country.
- Year Established: 1961
- Location: Northwest Iowa – serving a 25-min radius
- Services: Check-ups and urgent care for dogs, cats, horse and some small farm animals
- Lease: $1,500/month
- Reason for Selling: Declining health
- Employees: 2 Vet Techs, 1 Office Assistant
- Hours: Mon – Thurs 8am to 5:30pm, Fri 8am – 5pm, Sat 8am – 12pm
- Seller Training Period: 1 year working 20 hrs/wk
- Growth Opportunities: Add grooming and more vets; current owner has not worked with large animals in recent years, but a new owner could add this service back
- Current Owner’s Responsibilities: Owner/Operator
- List Price: $249,000
- 2017 Gross Sales: $386,278
- 2016 Gross Sales: $451,893
- 2017 Cash Flow: $68,257
- Profit Margin: 24%
- $132,000 worth of assets included in the purchase
- Equipment: $117,000 – autoclave, blood analyzer scanner, digital navigator, therapeutic laser, anesthesia machinery, x-ray
- Intangible Assets: Name recognition, website
- Inventory: $15,000 in wholesale value
- A/R: $14,000 – 70% collectible
*amounts may vary
Cash Flow Analysis
|Description of Financial Statement||P&L Statement||Tax Return||Tax Return||Tax Return||Notes|
|Net Income Shown on Financial Statement||$20,079||$102,199||$72,073||$65,225|
|Compensation to Owner||$10,367||$12,000||$12,000||$12,000|
|11% Tax on total W2 Salaries||$1,140||$1,320||$1,320||$1,320|
|Interest||$207||$1,484||$2,298||$1,990||Non-onward going expense|
|Rent||$23,870||$26,145||$26,340||$20,340||Onward rent of $1500/month|
|Health Insurance||$11,261||$0||$0||$0||Personal expense|
|Auto Expense||$464||$0||$0||$0||Personal expense|
|Contributions/Donations||$869||$0||$0||$0||Non-onward going expense|
|Seller's Cash Flow = Total Addbacks + Net Income||$68,257||$143,148||$114,031||$100,875|
|Profit Margin||17.67 %||31.68 %||28.96 %||28.16 %|
- 18% profit margin in 2017
- 2 Veterinary Technicians
- One has 8 years of service with the clinic
- One has 3 years of service with the clinic
- 1 Office Assistant
- Has been with the clinic for 1 year
Equipment - $117,000
All equipment included in the sale has been purchased within the last 3 years, with the exception of the x-ray machine.
- Autoclave - $6,000
- Small animal dental unit - $1,600
- X-ray - $9,000
- Power dental float – horses - $4,500
- 2 microscopes - $1,200
- RK Incinerator model EHA - $4,000
- Analyzing equipment - $60,000
- Replaced blood analyzer and Abaxis vetscan
- Also does urinalysis
- Incorporates info into Cornerstone software
- Monthly fee paid, but credit is given back for usage
- CR4000 digital navigator-3058 - $21,000
- Gas anesthesia machine - $2,000
- Therapeutic laser - $2,300
- Vital signs anesthesia monitor - $2,500
- Miscellaneous medical equipment - $3,800
- Number of veterinarians employed in Iowa – 1,500+
- Hourly mean wages of around $37
- Annual mean wage of $78,040
- Veterinarians in Iowa earn more than 94% than other animal-related careers in Iowa
- Iowa veterinarian salaries are in the top 93% of all careers in Iowa
The Firm Business Brokerage used a Cash Flow Valuation methodology to determine the Purchase Price of the business.
The industry standard for veterinary practices is to take 80% of the gross sales to get the price.
The formula used is as follows:
2017 Sales x 80% = Fair Market Value
$386,278 x .80 = $309,022
List price is set at $249,000.
The owner has been ill and was out of the clinic for several months in 2017, leading to the decline in sales and cash flow. He is willing to take a $60,000 reduction in price for this reason.
Purchase Price: $249,000
100%Bank Loan: $249,000
Bank Loan 10-year term at a rate of 5.5% equals a monthly loan payment of $2,702.
Please note that the decision of whether to extend a loan on any sale belongs to the bank, and this document does not guarantee specific terms or verify that financing is available.
Offer Price: $
% Buyer Cash Down at Closing: $
% Seller Carry Back via Promissory Note: $
year term at a rate of %
% of Purchase Price secured by Buyer and Seller
Total Bank Loan Need: $
% of Purchase Price
Desired Loan Type:
Desired Bank Terms: year term at a rate of %
Total Business Assets, Inventory, and A/R: $
Total Undercollateralized Loan: $
|Monthly Payment to Bank:||$|
|Yearly Payment to Bank:||$|
|Monthly Payment to Seller:||$|
|Yearly Payment to Seller:||$|
|Total Monthly Debt Service:||$|
|Total Yearly Debt Service:||$|
Fixed Charge Coverage Ratio
The bank will require a minimum ratio of 1.5 to be lendable.
2017 Cash Flow
|Annual Debt Service:||$|
Buyer's Net Operating Income (NOI)
The amount of money the Buyer will retain as profit.
2017 Cash Flow
|Annual Debt Service:||-$|
Buyer's Return on Investment (ROI)
The rate of return on the Buyer's down payment.
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