You hear the hype regarding business valuations as a tool for business improvement, but why is it so important?
Part of your veterinary practice should be an annual valuation.
The following article was provided by James E. Guenther, DVM, MBA, MHA, CVPM, CVA, CEPA, CM&A, owner of Strategic Veterinary Consulting.
I am a veterinarian, business consultant, and a veterinary business owner. I see my veterinary business from all sides. I work there, I act as a business consultant to identify issues that may impact the business, and I treat that same business as a CEO. Because I see the business from all sides I need ways to monitor success (or failures). I have a toolbox of charts, graphs, financial statements, Key Performance Indicators (KPI), and my ultimate scorecard, the annual valuation.
So, you probably are wondering why I use the valuation as a business tool? The answer lies in the volume of information it provides to me. It substantiates a value for the business for a year’s hard work and determines the Net-Cash-Flow provided to the owner. In other words, did all of the managing duties provide improvement in the bottom line of the business? Doesn’t knowing the value for your business on an annual basis a good thing, especially for Financial...