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Should the Seller and Buyer Split
the Valuation Fee?

Kirsten Poppen, J.D.
Simmons Midwest

Determining practice value is critical when selling your practice.  Much of our business involves providing accurate practice valuations for a variety of reasons, including practice sales.  Often we are asked whether a seller and potential buyer can split the valuation fee.  While they can split the fee, there are some important items to consider whether it should be split. 

First, it is important to note that our value for the practice doesn’t change if we represent the seller, the buyer, or both.  Rather the difference is that the party who pays for the valuation, in essence, owns the report and can decide how much of the information she wishes to share with other parties, and equally important, when to share it. 

During our valuation, the seller provides substantial confidential information.  There may be sensitive items involved with the valuation that the seller wishes to not disclose to the buyer; items beyond sharing the value (and financials) of the practice.  Additionally, the seller may wish to be the only one who participates in our discussion about the practice.  This discussion may include problem areas or things that negatively impact the value.  If the buyer has paid for half of the report, the seller loses these options. 

Notably, we have seen situations where the valuation leads the seller to decide to wait to sell the practice.  Instead, he chooses to incorporate our suggestions to increase the value and revisits selling later. 

In short, there is no universal answer to splitting the valuation fee.  At Simmons, we’re happy to discuss your particular situation to see what is right for you.

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JULY

AVMA
July 19 - 22, 2008
New Orleans, LA

July 21st
Speaker:  Byron Farquer, DVM
Co- Speaker:  Christine Merle, DVM
- First, Break All the Rules ~ The Client Centered Practice
- Are You Surviving or Thriving in Ownership? ~ Leadership Success Stories
- Uncompromising Quality and Service ~ Improving Your Brand Image
- Going From Good to Great ~ Reaching the 5-Star Rating

Contact Simmons Pacific for additional information

July 21st
Representatives from the AVPMCA, including Dave Gerber and David & Larry McCormick, will be presenting a one day hands-on workshop on practices with no value and/or low value.  Check with the AVMA for the advance registration or contact Simmons Northwest or Simmons Mid-Atlantic.

AUGUST

AVPMCA
August 21 - 22, 2008
Kansas City, MO
Dr. Dick Goebel will preside at the Mid Year Meeting of the Association of Veterinary Practice Management Consultants and Advisors (AVPMCA).  For additional information contact Simmons Great Lakes.

PVMA - Hershey
August 15-17, 2008
Hershey, PA
David McCormick will be hosting 1 on 1 workshops on practice value - for buy/sell, buy-in, and management purposes.  Call Simmons Mid-Atlantic to arrange a time (888.881.7084) or stop by the booth to reserve a slot.

Southern Veterinary Conference
August 14 - 17, 2008
Birmingham, AL
Visit our booth for materials and information on buying or selling a veterinary practice and practice appraisals.  Contact Simmons Southeast for additional information.

View All Simmons' Events & Meetings Here