How to buy a veterinary practice (and check the numbers first)
Short answer
To buy a veterinary practice, verify revenue by doctor and by service line (exams, surgery, dentistry, diagnostics, pharmacy, boarding or grooming), active client and patient counts, transaction counts and average transaction, and pharmacy inventory and margins. Check who owns the relationships (the selling vet or associates), staff retention, equipment, and regulatory items: state rules on who can own a veterinary practice, and controlled-substance registration, which doesn't simply transfer to a new owner.
Vet practices combine a medical service, a retail pharmacy and sometimes boarding or grooming. Each line has its own economics, and the doctors drive almost all of it.
Revenue by line and by doctor
| Line | Check |
|---|---|
| Exams and wellness | Visits, reminder compliance, wellness plan members |
| Surgery and dentistry | Procedures per month, who performs them |
| Diagnostics (lab, imaging) | Equipment owned vs leased; reference lab costs |
| Pharmacy and food | Margin, inventory turns, online competition |
| Boarding / grooming | Occupancy, staff; see our grooming and boarding guides |
| Revenue per veterinarian | How much depends on the seller |
Worked example: revenue per doctor and what the seller's chair is worth
Illustrative example, not a real practice or market compensation
A practice does $2,100,000. The software shows the selling vet produced $900,000, two associates $650,000 and $550,000. Associates are paid 20% of their production in this example: $130,000 and $110,000. The seller pays themselves no salary and takes the profit, so the P&L shows earnings of $520,000 before the owner. If the seller retires at closing and you hire an associate to replace their production at the same 20%, that's $180,000, assuming the new vet keeps all $900,000, which they usually won't at first. Say they produce $650,000 in year one: revenue falls by $250,000, and at the practice's 30% contribution margin on extra revenue in this example, profit falls by about $75,000 on top of the $180,000 salary. So the $520,000 becomes roughly $520,000 − $180,000 − $75,000 = $265,000 in year one. Owner production is the single biggest number in a vet practice purchase.
Add-back traps
- The seller is the highest-producing vet. A replacement veterinarian's pay comes out if they leave.
- Pet-related personal expenses (the owner's animals treated free).
- Equipment leases treated as one-time.
- Inventory written down or stockpiled before sale.
Documents to request
- Practice software reports: revenue by doctor and category, clients, transactions.
- Tax returns, P&Ls, bank deposits, processor statements.
- Inventory list and controlled-substance logs.
- Staff roster: veterinarians, technicians, pay, tenure, agreements.
- Equipment list and leases; lease of premises.
- Licences, inspection reports, any board complaints.
Controlled substances, radiology and the clinic itself
Veterinary practices stock controlled substances for anesthesia, sedation and pain control. A DEA registration can't be transferred except with the DEA's written consent and on its conditions (21 CFR 1301.52), so plan the registration with your attorney, and have controlled-substance inventory counted and logged at closing. Ask for the last biennial inventory and any loss or theft reports. X-ray equipment is typically registered with the state radiation control program, and anesthetic gases bring workplace safety obligations. Walk the building with someone who knows clinics: surgery suite, kennel areas, ventilation and drainage. Equipment (digital radiography, ultrasound, dental, lab analyzers) is often leased or subscription-based; list what's owned, leased and how much is owed.
Red flags specific to veterinary practices
- Active client counts that use a long lookback, such as three years, which overstate the real base.
- Falling pharmacy revenue as clients buy online, without a plan to compete.
- Associates without employment agreements or non-solicits your state will enforce.
- Controlled-substance logs that don't reconcile.
- Board complaints or malpractice claims involving any veterinarian.
- Fees well below nearby practices, which may look like upside but can mean price-sensitive clients.
Worked example: active clients and the pharmacy line
Illustrative example, not a real practice
The seller says the practice has 6,500 clients. Using an 18-month lookback, the software shows 4,100 active clients with 5,300 active patients. Average annual revenue per active client is $2,100,000 ÷ 4,100 = about $512. Pharmacy and retail are $380,000 of revenue (18%), down from $440,000 two years ago as clients buy medications online. If that trend continues, pharmacy revenue falls by about $30,000 a year, and at a pharmacy margin of 35% in this example, gross profit drops by $10,500 a year. Not fatal, but a trend to plan around: an online pharmacy option for clients, or a stronger focus on services that can't be bought online.
What moves the value of a veterinary practice
We don't value deals or publish multiples we can't verify. Appraisers and lenders weigh these factors:
| Factor | Supports a higher value | Pulls it lower |
|---|---|---|
| Doctor production | Spread across associates | Seller produces most revenue |
| Client base | Growing active clients, good reminder compliance | Shrinking, lapsed patients counted |
| Service mix | Diagnostics, dentistry, surgery | Mostly vaccines and pharmacy |
| Staff | Credentialed technicians who stay | High turnover |
| Facility and equipment | Modern imaging and lab, room to grow | Cramped, old equipment |
The first 90 days after you buy
Have the seller introduce you or your associate to long-standing clients in person, and keep the team, the appointment templates and the fee schedule unchanged at first. Make sure DEA registration, state premises permits and X-ray registration are in place for the new owner, and reconcile controlled-substance logs on the first day. Then look at reminder compliance and missed appointments, which are often the quickest operational gains.
Wellness plans: prepaid care you will deliver
Many practices sell wellness plans: a monthly or annual fee covering exams, vaccines and routine tests. Ask for the number of active plans, what each includes, how they are billed, and how much care is still owed on prepaid plans. Unused care on a prepaid plan is a liability, so ask for a credit at closing. Check, too, whether plan pricing still covers what it includes after recent price increases.
Associate veterinarians' agreements
If associates produce much of the revenue, read their agreements: base pay or production-based pay, term, notice and restrictive covenants. Whether those covenants transfer in a sale, and whether they can be enforced, depends on state law. Meet each associate before closing. Their plans matter more than the equipment list.
Questions to ask the seller
- What did each veterinarian produce in each of the last two years?
- How many active clients and patients, using a 12 to 18 month lookback?
- Will you work through a transition period, and for how long?
- Which associates and technicians are likely to stay, and on what terms?
- Which equipment is leased, and what's owed?
- Any DEA, board or inspection findings?
The pharmacy and lab lines
Medications, diet sales and in-house lab work can make up a meaningful share of a practice's revenue. Ask for revenue and cost by line, and for the inventory count and turnover. Online pharmacies and outside labs compete for this revenue, so compare the trend over three years. Check the controlled substance logs and DEA registration separately: a new owner generally needs their own registration, and discrepancies in the logs are a compliance problem you don't want to inherit. Equipment for in-house labs and imaging is often leased, so add any payments to your debt service.
Meet the practice manager early. They often know more about daily operations than the seller.
Frequently asked questions
Can a non-veterinarian own a vet clinic?
It depends on the state. Some restrict ownership to licensed veterinarians; others allow lay ownership with a licensed veterinarian responsible for medical decisions. Check your state veterinary board.
Does the DEA registration transfer?
Under federal rules, a DEA registration can't be assigned or transferred except with the DEA's written consent and on its conditions. Plan for the buyer's or practice's own registration and the handling of controlled-substance inventory.
How do I check the client base?
Practice software reports: active clients and patients (seen in the past 12 to 18 months), new clients per month, visit frequency and reminder compliance.
Is pharmacy revenue at risk?
Online pharmacies compete for prescriptions. Check pharmacy revenue trend and margin, and any online store the practice uses.
What happens to a vet practice's revenue when the selling vet retires?
Some clients follow the vet they know, especially for long-standing patients. Retention is usually better when the seller works alongside the buyer or an associate for a transition period, introduces clients personally, and the support staff stay. Measure revenue by doctor so you know how much depends on the seller.
How do I verify a vet practice's revenue?
Practice management software reports by doctor and service category should tie to card processor statements, bank deposits and tax returns. Pharmacy and lab purchases from distributors and reference labs give a cross-check on volumes. Ask for active client counts using a 12 to 18 month lookback.
Sources
- 21 CFR 1301.52 (DEA registration not transferable without written consent), eCFR
- DEA Diversion Control Division
- eCFR 21 CFR 1301.52 (DEA registration: termination and transfer)
- AVMA (American Veterinary Medical Association)
- OSHA (workplace safety, including radiation and anesthetic gas hazards)
- SBA SOP 50 10 8.1
Related guides
General information, not legal, tax, financial or investment advice. Rules and lender practices change; check the linked sources and talk to your attorney, CPA and lender about your deal. Examples with named numbers are illustrations, not real businesses. OKtoBuy's Deal Check does not value businesses or give price opinions.