A veterinary practice runs a service business and an inventory business at once, and blended margins hide which one is carrying the other.
Nashville is the headquarters city of the healthcare services industry. The groups acquiring dental, veterinary and optometry practices, the private-equity firms behind them, and the lenders financing the transactions are largely based here or run their deal teams here. Practice owners in Middle Tennessee are approached earlier and more often than owners almost anywhere else.
That changes what the numbers have to be ready for. An owner who has never considered selling still needs a normalized earnings figure, because the first serious conversation usually arrives unannounced and the practices that negotiate well are the ones whose books already tell a clean story.
What that means for the numbers.
- Normalized owner earnings, kept currentNot assembled the month a letter of intent arrives. Owner compensation set to market, capital spending on a depreciation schedule, deferred revenue released as care is delivered.
- Growth capital and the second locationMiddle Tennessee is adding population faster than most metros. Expansion decisions here are frequent, and they are financing decisions before they are clinical ones.
- Rising occupancy costCommercial rent in Nashville and the inner suburbs has moved sharply. Occupancy as a percentage of collections deserves closer attention than the national benchmarks assume.
- No state income tax, which changes entity mathTennessee has no personal income tax on wages, which alters the owner compensation and entity questions relative to most states.
- A labour market competing with hospital systemsYou hire clinical and administrative staff against one of the densest concentrations of healthcare employers in the country.
What the close actually produces
Books closed on an agreed date each month, with a chart of accounts built for a veterinary practice built around how the practice earns. Deferred revenue carried as a liability, provider compensation isolated from operating cost, and inventory handled where it applies.
That is the foundation. The value comes from the conversation about what the closed numbers mean, which is what the CFO side of the engagement is for.
Frequently asked.
Do you only work with veterinary practices in Nashville?
No. We work nationally. Nashville is where we are based, and practices in Middle Tennessee often prefer a firm that understands how quickly this market moves.
Do you file our taxes?
Tax filing stays with your CPA, who works from closed, accurate financials. If you want one firm handling the return as well, say so on the first call and we will point you to firms that do.
What do you need to start?
Read-only access to your accounting file, bank and merchant statements, payroll reports, and your practice management reporting.
General information for practice owners, not accounting, tax, legal, valuation or investment advice for your situation. MedPraxis CFO is not a CPA firm, a registered investment adviser, or a business broker. Talk to your own CPA, attorney or adviser before acting on anything here.