How to Build a Profitable Veterinary Practice

How to Build a Profitable Veterinary Practice

Posted on July 25, 2013 by Michael Martin Leaño

Running your own veterinary clinic isn’t easy; building a profitable practice from scratch can be even more challenging. There are a lot of factors to consider and details to pore over–we’re not even talking about your vet skills yet. To help you get started on your veterinary practice, here are a few tips to help you prepare and make it profitable.

Establish a vision

Forming a clear vision is crucial in planning your business. It will define your long-term goals for your practice and give details as to why you’re doing what you’re doing. To develop your vision statement, think of how you want your practice to be. This should encompass the business’ size, scope, specialisations, and other details about your ambitions for it. Don’t forget to write it all down.

You’ll also need a mission and values for your practice. The mission should define why your practice exists and what it will do to realise your vision. The values, on the other hand, are about your beliefs, or the beliefs shared among your practice’s partners and/or backers. These values would provide a basis where decisions will be made and determine your business’ culture.

Choose your location for Veterinary Practice

Your veterinary practice’s location is vital to its success. It’s not just a matter of getting the most visible space; you also have to consider other factors including the following:

• Customer convenience
  The location of your premises should be convenient for the customer, especially in terms of accessibility.
  
• Parking
  Your premises should have enough parking for both employees and customers. This is important: if customers find it difficult to park, they could go to your competitor instead.
  
• Storage space
  Your place of business needs to have enough space to store your equipment, medicines, and other necessary supplies.
  
• Area demographics
  Consider the characteristics of the neighbourhood’s population. How many residents does it have versus establishments? What are the residents’ income levels? You’ll have to do a bit of research but the information will tell you if your business is suitable in the area.
  
• Competition
  You also need to study other nearby veterinary practices in the area. Find out which clinics serve your target market and try to figure out their strategy. Don’t just copy what they do; understand why they do what they do.
  
• Rental or ownership
  When you set up your clinic, you’ll either rent or buy the premises. Your decision will depend on a number of factors like potential returns, suitability of the property, and price, which would dictate whether you can afford the arrangement or not.

Figure out the everyday details

In addition to your actual medical proficiency, running a profitable veterinary clinic would require some skill in managing its day-to-day operations. You’ll also have to figure out all the everyday details before you start the business so that you’re ready. These include the following:

• Operation hours
  What days and hours would you be open? Would you be available during holidays or weekends? Would you allow appointments after business hours? Knowing the demographics (see above) would give you a better idea what business hours your customers would prefer.
  
• Cost of services
  You have to establish how much you’re going to charge your customers. You can get a price list from other practices in the area; just make sure they don’t know you’re one of the competition. Again, knowledge of local demographics is invaluable since it would tell you about the residents’ income level and how much they’d be willing to spend.
  
• Employees
  Your practice will need only a handful of employees for it to operate. At the very least, your business could use a receptionist, and maybe a veterinary assistant and licensed technician. Once your business grows, you might also want to get an attendant for your kennel, if you have one.
  
• Software
  To help run your business smoothly, you might want to get the appropriate software. There are a number of veterinary practice management systems out there that would allow you to build a database of electronic medical records, write prescriptions, schedule appointments, and manage your inventory.

Forecast your expenses and income

For your practice to survive and thrive, you have to know the ins and outs of its finances. You’ll need to prepare your practice’s financial projections for its first 36 months so that you can better plan its expenses, especially while it’s still not making any money. Having comprehensive financial projections would also improve your chances for getting a loan to bankroll your practice. Your financial plan should cover several important facets including:

• Sales forecast
  Since you don’t have past data to use as basis for your sales forecast, you’ll have to look at other factors like existing practices in the area. Don’t forget to factor in seasonality.
  
• Expenses budget
  You need to determine how much you’re going to spend to run your practice. Start by categorising your expenses: for instance, employee salaries and rent would fall under fixed costs, while promotions and advertising would be considered variable costs. You’ll also have to guesstimate taxes and interest.
  
• Cash flow statement
  It’s necessary to prepare a cash flow statement, which would show how money would move in and out of your practice. The information would be based on your sales forecast, balance sheet, and other presumptions.
  
• Income forecast
  Another detail you should include is your practice’s net income and revenue projection. You’ll need the information that you used in your sales forecast.

Develop a marketing campaign

Here’s another important step: you need to create your practice’s marketing strategy so that you can promote it and increase your patient numbers. Since you’re new in the neighbourhood, you’ll first have to focus on introducing yourself and attracting the attention of potential customers.

Think about the different types of media you can use to reach your audience. For instance, you can advertise on the local radio station, give away flyers, set up a website, or hold an open house and invite nearby residents and other establishments.

Promoting a new veterinary practice is tricky because while you can attract attention to convince people to visit your clinic, persuading them to try your services is an entirely different matter. You’ll have to offer special promos (e.g. discounted check-ups) and provide quality medical work and excellent service.

Build your team of advisors

It doesn’t end there. You also have to assemble your own team of professional advisors to help you through the preparations, opening, and actual operations. You’ll need a good accountant for the numbers, an attorney for legal concerns, a marketing consultant to help you promote your practice, a lender for financial backing, and a contractor or handyman for upkeep.