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From poorly puppies to sickly snakes, veterinary practice, Shuttleworth Veterinary Group in Rawtenstall has built an enviable reputation for excellent standards of care and service over the years.
Vet, Vince Wager, joined the business in 2010 and had discussed the possibility of opening a second practice with the company’s owner, Hammad Sarwar. So when an opportunity arose to acquire a suitable property in Rochdale, the colleagues looked into the business case for setting up in the town.
Explains Vince, “There were already several vets’ practices in Rochdale but the building and location were ideal and we believed we could bring something new to the town based on the best practice model of the existing business in Rawtenstall.
“There were several questions about how to set up the business and how to manage the property acquisition element of the process so we arranged a meeting with Haworths Chartered Accountants for its advice on a wide range of practical matters.”
Future Flexibility
Vince and Hammad wanted to set up the new business, Valley Vetcare, as a 50/50 partnership and had already decided to buy rather than rent the property.
Hammad already owned the Rawtenstall practice and the two companies were to be linked by common computer systems, a shared client database and the use of shared equipment.
Vince says: “We needed to look at the best way to structure the new business in terms of deriving the maximum benefit from the links between the two practices while keeping them financially separate. We also wanted to ensure that there was enough flexibility in the structure of the company and assets ownership to factor in varied options when we decide on exit and earn out plans in the future.”
Haworths’ Jeff Allsebrook says: “We outlined the possible options for dividing shares in the business and structuring the property purchase to build flexibility into the company’s asset base. While the property purchase was financed by a bank loan from Hammad’s existing business bank, we also advised the business partners on asset finance options for a new X-ray machine and helped to compile the application.”
Vince continues: “After listening to Haworths’ advice we decided to keep the property and the business financially separate. Hammad and I own the premises jointly and we rent it to the Rochdale practice, which we also own on a 50/50 basis.
“This means that if we decide to sell the practice in the future and the buyer cannot afford to buy both the business and the property we can continue to rent the property to the new owners.”
Supporting Growth
The property purchase was completed by January 2014 and the Valley Vetcare practice in Rochdale opened to its first clients on 1 April. In the meantime, Haworths continued to help the fledgling company with the practical financial matters surrounding set up, including VAT registration and installation of the company’s SAGE accounting systems.
Going forward, Haworths will be responsible for dealing with the report and accounts for the new veterinary practice and Vince and Hammad will continue to involve the company in decisions about the property.
Vince adds: “At the moment the practice is based on the ground floor of the building and we are using the upstairs as office space. We are hoping to expand to the first floor as we grow but in the meantime we need to decide whether to rent that space out as a revenue generator and we will continue to consult with Haworths to ensure we consider all the financial implications of those choices as the business develops.”
Jeff says: “Every business is different and it’s important that we get to know our clients so we can give the best possible advice. “
