74% of vet respondents do not know worth of practice – study

74% of Irish vets could be at a disadvantage when selling their practice because they do not know what their business is worth, according to the findings of a new study by Irish accounting and advisory firm, HLB Sheehan Quinn.

HLB Sheehan Quinn’s third annual Veterinary Practice Survey Report (for 2019-2020) says the entry of corporates to the Irish market is “creating opportunities for veterinary practice owners who want to sell their business”.

However, practice owners should be wary of pitfalls and consult advisors before negotiating with potential purchasers, the advisory firm warns.

Research for this report was conducted during September 2019, with 121 respondents from veterinary practices across Ireland participating in the study.

Other notable findings from the study included the result that 68% of practice owners who are not currently incorporated would consider incorporation.

In addition, 40% of practice owners are considering selling within the next three years. However, 70% of practice owners have not identified a successor, the study notes.

Recruitment, work-life balance and credit control were identified by respondents as the three biggest challenges facing Irish practices with 22%, 18% and 12% of participants naming these respectively.

Work hour issues

Across the profession, long hours and rota issues continue to be a problem and are contributing to difficulties in recruitment.

54% of practices who participated in the study, plan to recruit vets or nurses in the next 12 months. However, across all regions, practices report problems attracting and retaining staff, with sole practitioners often working long hours themselves as a result.

Like newly qualified doctors, veterinary graduates are opting to go abroad for a year or two post-qualification. Once they have experienced better living and working conditions abroad, many are reluctant to return to the long hours in traditional veterinary practices in Ireland.

Gender pay gap and job satisfaction

While overall job satisfaction levels among survey participants show improvement when compared to last year – perhaps reflecting better work-life balance in practices that have scaled up over the last 12 months – job satisfaction levels among female respondents are lower than those of their male peers (38% of female respondents are satisfied versus 70% of male respondents).

Four in 10 survey respondents are female, with women outnumbering men in the under-40 age group.

The study found significant disparity regarding the earnings of female respondents versus male counterparts with just 23% of female respondents earning over €60,000 per annum compared to 80% of males.

Although the numbers suggest a significant gender pay gap, factors such as drop off and fluctuating career ambitions as well as an evolving career cycle for vets are likely contributing factors, HLB Sheehan Quinn says.

Brexit impact

The impact that Brexit will have on the agriculture sector is another concern, particularly for large animal practices.

Respondents are also worried about the future supply of medicines traditionally sourced from the UK.

Commenting on the findings, HLB Sheehan Quinn managing partner Mark Butler said: “Considering the number of vets who hope to sell their practice in the next three years, it is eye-opening that seven in 10 practice owners who participated in our research don’t know what their practice is worth.

“Practice owners need to consider engaging with expert advisors with transactional experience in advance of retirement or exit so that they can negotiate effectively when entering into discussions with prospective purchasers,” the managing partner added.

“Long hours and difficulties attracting and retaining staff are a challenge for practices across the country.

While remuneration is important, practices need to be looking beyond pay to benefits such as flexible working, health screening and health insurance, learning opportunities, mentoring and career progression.

“Scaling up can be one way for practices to improve their ability to attract and retain staff,” Butler said.