Our calculator gave this veterinary clinic a 9.2 out of 10.
That is one of the strongest scores we have seen in a while.
So what makes it so good?
The clinic is listed for $795,000 and claims about $394,000 in annual cash flow.
According to the listing, it has been around for more than 30 years, the owner only works two days a week, and most of the day-to-day work is handled by a hired veterinarian and staff.
Running this deal through the BizHub calculator leaves about $278,000 a year after loan payments.
That is very strong cash flow for a sub-million dollar acquisition.
The debt coverage is also excellent, with DSCR around 3.39.
That gives a buyer a lot more cushion than most SBA deals.
The down payment is also recovered in roughly 0.29 years, which is extremely fast.
The asking price works out to only about a 2.0x cash flow multiple.
That is actually below what similar pet service businesses often trade for.
For a business with this much cash flow, long history, and recurring customer demand, that valuation is attractive.
The clinic also runs at an almost 40% profit margin, compared to an industry average closer to 25%.
That is impressive, especially for something described as semi-absentee.
I generally like pet service businesses.
Pet spending tends to be surprisingly resilient.
People may cut back on plenty of things, but they usually keep spending on their animals.
This clinic also has upgraded equipment, including digital x-ray, dental, and ultrasound units.
That helps reduce immediate capital expenditure risk for the buyer.
The listing also mentions a loyal client base and long-employed staff members, which are both important in a relationship-driven local healthcare business.
The biggest risk is the hired veterinarian.
This business appears heavily dependent on having the right DVM in place.
Unless you are a veterinarian yourself, you are not stepping in and replacing that person if they leave.
That matters a lot.
A veterinary clinic without enough veterinary capacity is not the same business.
And much of the projected growth depends on adding more veterinary hours or opening on Saturdays.
That upside sounds simple, but only if the labor is available and the existing team can support the increased volume.
This is a very strong deal on paper.
Strong cash flow.
Reasonable valuation.
Long operating history.
Excellent debt coverage.
And a resilient industry.
BizHub scored this deal a 9.2 out of 10.
My biggest concern is not the business itself.
It is how dependent the business is on keeping the right veterinarian in place.
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