{
  "slug": "vet-practice-valuation-multiple",
  "title": "Veterinary Practice Valuation Calculator",
  "heading": "Veterinary Practice Valuation Multiple Calculator",
  "category": "financial",
  "url": "https://www.revenuelab.fyi/toolbox/vet-practice-valuation-multiple",
  "summary": "Estimate practice value from EBITDA and current market multiples.",
  "description": "Veterinary practice sales are usually priced off a multiple of adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization, with owner compensation normalized to fair market doctor pay), not off top-line revenue. This calculator normalizes owner-related add-backs into EBITDA, applies a market multiple you choose based on deal size and buyer type, and returns an estimated enterprise value plus a revenue-multiple cross-check. Independent single-doctor practices commonly trade at 4-6x EBITDA; multi-doctor practices with strong systems and consolidator interest can reach 7-9x, while corporate platforms sometimes pay double-digit multiples for scale and real estate combined.",
  "formula": "Adjusted EBITDA = net income + owner comp above market + interest + taxes + D&A − market-rate replacement doctor cost; Value = adjusted EBITDA × multiple.",
  "dateModified": "2026-09-30",
  "run_url": "https://www.revenuelab.fyi/api/public/calc?tool=vet-practice-valuation-multiple",
  "inputs": [
    {
      "id": "revenue",
      "label": "Annual revenue",
      "kind": "number",
      "hint": null,
      "default": 2200000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "netIncome",
      "label": "Reported net income",
      "kind": "number",
      "hint": null,
      "default": 280000,
      "unit": "$",
      "min": -1000000,
      "max": null
    },
    {
      "id": "ownerComp",
      "label": "Owner compensation paid",
      "kind": "number",
      "hint": null,
      "default": 260000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "marketDoctorPay",
      "label": "Fair-market replacement doctor pay",
      "kind": "number",
      "hint": null,
      "default": 170000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "addbacks",
      "label": "Other add-backs (interest, D&A, discretionary)",
      "kind": "number",
      "hint": null,
      "default": 60000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "multiple",
      "label": "EBITDA multiple",
      "kind": "number",
      "hint": null,
      "default": 5.5,
      "unit": null,
      "min": 1,
      "max": 15
    }
  ],
  "outputs": [
    {
      "id": "value",
      "label": "Estimated practice value",
      "format": "currency",
      "hint": null,
      "primary": true
    },
    {
      "id": "ebitda",
      "label": "Adjusted EBITDA",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "ebitdaMargin",
      "label": "EBITDA margin",
      "format": "percent",
      "hint": null,
      "primary": false
    },
    {
      "id": "revenueMultipleImplied",
      "label": "Implied revenue multiple",
      "format": "decimal",
      "hint": null,
      "primary": false
    }
  ],
  "worked_example": {
    "inputs": [
      "Annual revenue: 2200000 $",
      "Reported net income: 280000 $",
      "Owner compensation paid: 260000 $",
      "Fair-market replacement doctor pay: 170000 $",
      "Other add-backs (interest, D&A, discretionary): 60000 $",
      "EBITDA multiple: 5.5"
    ],
    "outputs": [
      "Estimated practice value: $2,365,000",
      "Adjusted EBITDA: $430,000",
      "EBITDA margin: 19.5%",
      "Implied revenue multiple: 1.08"
    ]
  },
  "how_to": {
    "title": "How to use this",
    "steps": [
      "Enter annual revenue ($).",
      "Enter reported net income ($).",
      "Enter owner compensation paid ($).",
      "Enter fair-market replacement doctor pay ($).",
      "Enter other add-backs (interest, d&a, discretionary) ($).",
      "Enter ebitda multiple.",
      "Read your estimated practice value on the right — it updates as you type.",
      "Hit Share to keep the scenario or send it to someone."
    ]
  },
  "scenarios": [
    {
      "name": "Conservative",
      "description": "Lower-end numbers — what if things land soft?",
      "values": {
        "revenue": 1320000,
        "netIncome": 170000,
        "ownerComp": 155000,
        "marketDoctorPay": 100000,
        "addbacks": 35000,
        "multiple": 3.3
      }
    },
    {
      "name": "Typical",
      "description": "Defaults — the most common real-world setup.",
      "values": {
        "revenue": 2200000,
        "netIncome": 280000,
        "ownerComp": 260000,
        "marketDoctorPay": 170000,
        "addbacks": 60000,
        "multiple": 5.5
      }
    },
    {
      "name": "Ambitious",
      "description": "Higher-end numbers — what if things really pop?",
      "values": {
        "revenue": 3520000,
        "netIncome": 450000,
        "ownerComp": 415000,
        "marketDoctorPay": 270000,
        "addbacks": 95000,
        "multiple": 8.8
      }
    }
  ],
  "limitations": [
    "Results are estimates before tax, fees, and inflation unless an input explicitly covers them.",
    "Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.",
    "This is educational maths, not financial advice. Check anything contractual with the lender or your accountant."
  ],
  "faq": [
    {
      "q": "Why subtract a market-rate doctor salary if I'm the owner?",
      "a": "A buyer will need to hire a replacement doctor at fair market pay to do the work you currently do as owner. Adjusted EBITDA reflects what the practice earns after paying a real doctor salary, which is the cash flow a buyer actually receives, not the inflated number you get by leaving owner pay at zero."
    },
    {
      "q": "What multiple should I use?",
      "a": "Single-doctor practices under $1.5M revenue often trade 3-5x; multi-doctor practices $2M-$5M with good systems commonly see 5-7x; larger, well-documented practices with growth trends can reach 7-9x from private equity-backed consolidators. Real estate, if included, is valued separately."
    },
    {
      "q": "Does this include real estate if I own the building?",
      "a": "No. This values the practice's operations only. If you own the real estate, it's typically valued separately via appraisal or cap-rate analysis and either sold with the practice or leased back to the buyer under a separate agreement."
    },
    {
      "q": "How accurate is a multiple-based estimate?",
      "a": "It's a reasonable planning-stage estimate, not a substitute for a formal valuation. Actual deals also weigh growth trend, payer/case mix, staff retention, lease terms, and competitive buyer interest, any of which can move the final multiple up or down half a turn or more."
    }
  ],
  "related": [
    "https://www.revenuelab.fyi/toolbox/vet-revenue-per-dvm",
    "https://www.revenuelab.fyi/toolbox/practice-transition-timeline-value",
    "https://www.revenuelab.fyi/toolbox/associate-buy-in"
  ],
  "license": "CC-BY-4.0",
  "citation": "RevenueLab — Veterinary Practice Valuation Calculator (https://www.revenuelab.fyi/toolbox/vet-practice-valuation-multiple)"
}