Between a rock and retirement
While an abundance of buyers sounds like a good thing, it may also signal a dangerous standoff in the marketplace. Some owners
have been reluctant to sell, waiting for the economy to recover and improve their retirement outlook. But buyers are getting
"Sellers have been hesitant because of their own financial status and ability to retire and get enough for their practice,"
Glassman says. "So if they're scared about anything, it's developing a good enough sales price for them to meet their own
economic requirements through years of retirement."
Glassman, who offers personal financial planning for sellers, says those who retire at age 65 will typically live to be 90.
So their financial plans need to consider how much money they need from the sale to sustain their accustomed lifestyle for
the next 25 years. And in some cases, sellers simply can't afford to retire yet.
Some of this, Glassman says, is because "no-lo practices" (no-value/low-value) still exist in the marketplace. "It's still
extremely important for sellers coming to the marketplace to understand what their practices are truly worth," he says. "Do
your valuation far enough in advance to be sure you're going to get the money you need to retire after you've paid the taxes
from the sale."
Tom McFerson, CPA, ABV, is a partner with Gatto McFerson CPAs in Santa Monica, Calif. He's also seen some practice owners
hesitating to sell because they're looking for more money going into retirement. However, as the stock market has come around,
retirement plans are healthier, he says, and personal portfolios are stronger. There are also signs the real estate market
and the veterinary industry are coming around.
"There's definitely more activity in the last year as opposed to the prior three or four years," McFerson says. "Interest
rates are still good, and the economy feels better."