{"id":22953,"date":"2022-12-01T00:00:49","date_gmt":"2022-12-01T00:00:49","guid":{"rendered":"https:\/\/todaysveterinarybusiness.com\/?p=22953"},"modified":"2023-01-24T15:47:48","modified_gmt":"2023-01-24T15:47:48","slug":"control-financial-wellness-1222","status":"publish","type":"post","link":"https:\/\/navc.sitepreview.app\/todaysveterinarybusiness.com\/control-financial-wellness-1222\/","title":{"rendered":"Control the Controllables"},"content":{"rendered":"

Cognitively, we understand that uncertainty is part of life. We\u2019re taught to live one day at a time and \u201cDon\u2019t worry about tomorrow, as today\u2019s problems are enough.\u201d Emotionally, we know that uncertainty breeds anxiety and worry. While we might realize that faith and fear cannot coexist, 2022 proved it was much easier said than done.<\/p>\n

The year began with the Russian invasion of Ukraine, adding to an already problematic supply chain, especially for world food and energy. We experienced high inflation, a bear stock market with losses exceeding 20% from January\u2019s record highs, and, as of this writing, a possible recession that would shrink the overall economy. Mix in political turmoil, climate change, border insecurity, rising crime and natural disasters. Most folks feel uncomfortable and a little anxious about the future.<\/p>\n

The veterinary profession faces even more uncertainty, given the shortage of veterinarians<\/a> and other team members. The new year, 2023, offers no apparent relief.<\/p>\n

So, what do smart people do today with their business and personal finances? The only rational approach is to control the controllables.<\/p>\n

Hopefully, you know your veterinary practice\u2019s key performance indicators and work consistently to control what you can to drive to the desired numbers. Focusing on those targets likely leads to a well-run practice with satisfied clients and handsome profitability for the owners.<\/p>\n

Ideally, your practice exists in perpetuity. If you\u2019re the owner, your job is to take care of your team, patients and clients and prepare the practice for its next owner. Profitability helps deliver quality medicine and makes the practice valuable to others, thereby ensuring continuity. Unprofitable veterinary practices aren\u2019t worth much. You can\u2019t sell your job.<\/p>\n

Practice owners have heard of EBITDA multiples<\/a>. Think of EBITDA as adjusted earnings and a multiple as a year. Over most of Fritz\u2019s more than 30-year career in the veterinary profession, multiples generally ranged from three to six. Four to five is the average for small animal practices. As of this writing, they\u2019re worth perhaps eight to 12 times adjusted earnings. So, by any historical measure, now is a great time to sell a profitable veterinary clinic.<\/p>\n

Practice owners, please note that improved profitability is the best investment you can make. For example, growing profits by $1 might increase the practice value (your personal net worth) by $8 to $12.<\/p>\n

We firmly believe the best time to sell a veterinary clinic is when you\u2019re ready. Therefore, the smartest strategy is always to operate the practice as if it\u2019s for sale. Controllable items that buyers find attractive include:<\/p>\n