How to Value a Veterinary Practice in 2025

If you plan to sell your veterinary practice in the next few years or even wonder what it might be worth today then you need to understand how valuation actually works. We get a lot of questions about how to calculate value because most practice owners still believe it is just about total revenue or how long you have been in business but that is not how it works anymore. 

The way practices are valued has changed especially in 2025 because buyers are smarter, the market is more competitive and private equity firms look closely at your financials before making an offer. If you are still guessing or using outdated valuation methods you could be leaving a lot of money on the table.

Let us explain how to value your veterinary practice in today’s market properly and what numbers matter when buyers are doing the math.

How Buyers Think About Value

Most practice owners assume their value is based on gross revenue but the truth is buyers do not care about how much you make if you are not profitable. What they care about is your EBITDA. That stands for earnings before interest, taxes, depreciation and amortization.

EBITDA shows how much profit your practice is actually making before accounting and taxes. It tells buyers what they can expect to earn if they take over your clinic.

Example of EBITDA in Action

If your practice earns $1.2 million in revenue and your EBITDA is $250,000 and market multiples are around 5x then your practice might be worth $1.25 million.

That multiple depends on a lot of factors including your team, your location, your systems and even your lease terms. But without knowing your EBITDA you are just guessing.

What Impacts the Multiple

Buyers will offer multiples of your EBITDA based on how attractive your practice is. A single doctor practice with no associates, no digital records and weak branding will get a lower multiple than a well-run practice with strong systems and a scalable team.

Things that increase your valuation multiple include a loyal and growing client base, clear financial records, associate veterinarians who plan to stay cloud-based practice software, updated equipment, modern facilities, well-documented protocols, smooth handover processes, a strong local reputation and a consistent online presence.

On the other hand if your practice depends entirely on you if you take home cash off the books or if your systems are a mess you are going to struggle to get a strong valuation.

Three Years of Clean Financials

Every serious buyer is going to ask for at least three years of financials. That includes profit and loss statements, tax returns, payroll summaries and production reports. And no they do not want spreadsheets you created in Excel last night. They want documents from your accountant or software reports they can verify.

In one of our webinars a practice owner asked our growth expert Blake how to make sure their practice is ready to sell for the price they want. Blake said the most important thing is to get everything organized, especially your finances. If your records are messy or the numbers are incomplete buyers will either lose confidence or lower their offer. That is one of the main reasons practices sit on the market for months without any serious interest. Buyers want to trust the numbers and if they cannot they move on. 

So if you are thinking about selling in the next two or three years now is the time to get your systems in order and make sure your practice tells the right financial story.

Understand What You Can Add Back

One thing you will hear about in valuation is “add backs.” These are owner-specific expenses that are not necessary for a buyer to take on and can be added back to your EBITDA to make your numbers stronger.

Examples of Add Backs

• Personal car or travel expenses run through the business

• One-time legal or consulting fees

• Owner’s salary if they plan to exit after the sale

• Family members on payroll who do not work full time
  

The potential buyers will verify each add back but when you have a clear schedule that shows exactly what to adjust it helps them see the true earning potential of your practice and that can lead to a much better offer.

Location Still Matters

The location of your veterinary practice plays a big role in the value. A well established clinic in a growing suburban area with good schools and housing will get more attention than a rural location with no associates and declining population.

But that does not mean small-town practices cannot sell well. If your books are strong and your EBITDA is solid. The buyers will still be interested especially if you work with the right advisor who knows how to position your practice.

Why Associate Retention Increases Value

If your practice has associate vets who plan to stay after the sale that can bump your value significantly. Buyers see this as a signal of stability. It means the business will keep running smoothly and patients will not leave after the owner steps out.

This is also a good time to think about offering your associate a retention bonus or putting some kind of transition plan in place. It makes your practice more attractive and reduces risk for the buyer.

When Should You Get a Valuation

If you are three to five years away from selling now is the perfect time to get a professional valuation. Why? Because it shows you what you are worth today and more importantly what you can fix to increase that value.

Maybe your lease is expiring and renegotiating it would improve your value. Maybe you are undercharging or carrying too much inventory. Maybe your practice is profitable but your EBITDA looks low because of unoptimized salaries or expenses.

A valuation helps you find those issues now while you still have time to fix them.

Avoid the Common Mistakes

Here are a few things that kill value fast:

• Taking home cash under the table that does not show up on your books

• Paying yourself or your family members through complex structures

• Not preparing a transition plan or succession strategy

• Trying to sell when you are burnt out and numbers are down

• Working with brokers who do not specialize in veterinary practices
  

This is not like selling a house. Buyers have very specific checklists and if your practice does not meet them you will not get top dollar.

What to Do if You Are a One Doctor Practice

If you are a single doctor practice and thinking of selling in the next three years, now is the time to make it less dependent on you. Start delegating more. Build a strong support team. Document your protocols and client communication systems. Clean up your finances and invest in your branding.

This is the window where you can turn your practice into an attractive business that sells at the right price to the perfect buyer. 

Final Word

Selling a veterinary practice is one of the biggest financial decisions you will ever make. And in 2025 you cannot rely on guesswork or some random calculations. Buyers want clean numbers, strong systems and a business that can run with or without you.

At DVMelite we help practice owners get their financials and operations in order so when the time comes to sell they get the value they deserve. Whether you are three years away or thinking about listing soon we will help you position your practice to sell faster and for a better price.