Veterinary practice valuations for Melbourne clinic owners and the vets buying in.

A Melbourne veterinary practice is valued on the earnings it keeps after every vet, including the owner, is paid a market salary and after market rent. Our valuers test whether clients are loyal to the clinic or to one vet, how income splits across consults, surgery, diagnostics and retail, and when the equipment and fit-out will need replacing. In Victoria the Board registers vets, not premises, so value sits in the team, the client base and the facilities rather than a premises licence.

What a buyer of a Melbourne vet clinic is really paying for

A clinic's worth comes from active clients who keep coming back for vaccinations, dentals, desexing and the conditions of older pets, and from the team that looks after them. The valuation measures that base directly: active client and patient counts from the practice software, how often they return, average spend per visit and how revenue splits between consultations, surgery, imaging, pathology, hospitalisation and the food and parasite products sold at the counter. A suburban clinic in Templestowe or Point Cook with a steady population of pet-owning families is a different asset from a newer clinic still building its book, or a mixed practice on the city fringe in the Yarra Valley or the Mornington Peninsula that also sees horses and livestock. Each has its own pattern of seasonal demand, after-hours load and travel time, and the report sets the earnings on what the clinic has actually done rather than a sector average.

Vet pay, the owner's role and the team

Many clinic owners pay themselves a mix of drawings and dividends and work far more hours than they would ask of an associate. The valuation removes that and charges a market salary for every clinical role the owner fills, plus a cost for the management work they do after hours. It then looks hard at the team. A practice where two or three vets share the caseload, with experienced nurses and a practice manager, can keep its clients when an owner steps back. A practice where one vet sees most of the appointments carries a real risk that clients leave with them. Recruiting and keeping vets and nurses is a cost every buyer prices in, so the report records staff tenure, any vacant positions and whether locum costs have been inflating expenses. If the seller will stay on after the sale, the length and terms of that handover are set out because they change how much of the goodwill transfers.

Premises, approvals and the Board's guidelines

The Veterinary Practitioners Registration Board of Victoria registers veterinary practitioners and specialists. Its guideline on veterinary facilities says facilities and equipment are not approved or licensed by the Board, and that practitioners must make sure any approvals or licences they need are current. The same guideline lists other bodies involved: local councils for practices that are also domestic animal businesses under the Domestic Animals Act 1994, the Department of Health for storage of scheduled drugs under the Drugs, Poisons and Controlled Substances Act 1981, the EPA for some practices that temporarily store biomedical waste, and the Department of Health's radiation safety area for practices with X-ray equipment. For a valuation, the question is whether each approval the clinic relies on is in place and can be put in the buyer's name without delay. The valuer lists them; the steps to transfer them are for your lawyer and the relevant body.

Equipment, fit-out and the lease

A modern small animal clinic carries digital X-ray, ultrasound, dental units, anaesthetic machines, in-house pathology and surgical lighting, and these wear out. The valuation separates equipment the business needs from goodwill, records the age and condition of the major items, and adjusts earnings for a realistic replacement cost so a buyer is not paying full price for gear that must be replaced in the first year or two. Some equipment is leased or financed, and those obligations come off the price. The lease gets the same scrutiny: a clinic is costly to move because of plumbing, kennels, theatres and radiation shielding, so a short remaining term or no option to renew takes value away. If the owner also owns the building, the business and the property are valued separately. Property is valued by a property valuer in Victoria; we value the business.

When Melbourne vet practices are valued

• ·Sale of a clinic, including testing an offer from a corporate or group buyer
• ·An associate vet buying a share of the practice
• ·A partner retiring and the others buying them out
• ·Moving the practice between a family trust, company or super fund
• ·Separating the clinic from the freehold before a sale
• ·Market value evidence for small business CGT concessions on exit (your accountant applies them)

• ·Guideline 6: Veterinary facilities, equipment and assistance in the provision of veterinary services, Veterinary Practitioners Registration Board of Victoria
• ·Veterinary Practice Act 1997, legislation.vic.gov.au
• ·Drugs, Poisons and Controlled Substances Act 1981, legislation.vic.gov.au