I recently had the chance to sit down with Teija Heikkilä, founder of Pet Vet M&A and one of the most experienced advisors in the pet care industry. Teija has been in this space for decades. She opened one of the first dedicated dog daycares in the U.S. in the 1990s and has since sold more than 250 pet care businesses. Her firm specializes in helping owners of pet resorts, daycares, grooming operations, and veterinary practices get the best possible outcomes when it is time to sell.
The conversation was eye-opening. Whether you are planning to sell in the next year or you have never even thought about an exit, the truth is the same: if you run your business as if you are going to sell it tomorrow, you will not only be ready when opportunity knocks, you will also run a stronger and more profitable operation today.
The Metric Buyers Care About: EBITDA
If there is one thing buyers care about, it is EBITDA, which stands for earnings before interest, taxes, depreciation, and amortization. In plain terms: cash flow. You might hear talk about revenue thresholds, but what really matters is how much profit your business generates after expenses.
To get meaningful interest from private equity groups, most facilities need at least $250–300K in EBITDA.
Larger EBITDA typically earns higher multiples. Private buyers often top out around 3x, while well-positioned facilities can achieve much more in a structured auction process.
Payroll is Your Biggest Lever
Rent is often fixed. Marketing costs can only be optimized so far. Payroll is where operators have real control. Teija’s guidance: keep payroll (fully burdened, excluding owner comp) under 40 percent of revenue. Many top operators hit 32–35 percent.
How do you get there?
- Train your staff well and build efficient staffing models.
- Simplify your service menu so employees can focus on what is profitable.
- Use software and processes that reduce mistakes and wasted time.
Diversification and Risk
COVID taught the industry a painful lesson. If all your revenue comes from boarding, you are exposed. Buyers now look for businesses that balance boarding, daycare, grooming, and training. Diversification lowers risk, makes your business more resilient, and helps retain staff by providing more stable hours.
But there is a warning here. If revenue relies too heavily on a single groomer or trainer, that creates key-person risk. Buyers may discount your EBITDA or add contingency terms. The solution is to build departments with multiple skilled staff so no single person carries the business.
Clean Financials Tell a Better Story
One of the most common mistakes Teija sees is messy financials. Inconsistent categories, personal expenses mixed in, or year-to-year reporting changes all raise red flags. Buyers do not want risk, and inconsistencies can knock serious value off your deal.
The fix is fairly straightforward:
- Keep three years of tax returns, P&Ls, and balance sheets.
- Standardize your chart of accounts.
- Make sure adjustments for owner benefits are clearly identified.
Think of your financials like a book. The cleaner the story, the more attractive your business looks.
A Bigger Opportunity For Your Team: Career Paths
One surprising benefit of consolidation is career growth for staff. In a one-owner, one-location model, your best people often hit a ceiling. Larger companies can offer paths into regional management and beyond. That makes your facility more attractive, not just for valuation, but also for retaining the talent that drives your business today.
Practical Advice for Operators
Teija summed it up simply:
- Run your business like you will sell it tomorrow.
- Focus on EBITDA. Every major decision should be weighed against whether it increases or decreases cash flow.
- Keep payroll in check. Efficient operations protect margins.
- Simplify your services and pricing. If customers are confused, they walk.
- Clean up your financials. Consistency reduces risk and boosts multiples.
Even if you are years away from thinking about selling, these habits mean more money in your pocket now and a stronger exit later.
If you are interested in exploring the sale of your pet care business, reach out to Teija Heikkilä at Pet Vet M&A. With more than 250 successful transactions, she knows how to help you prepare, position, and maximize the value of your business.
.svg)
