April  2017    
Volume 9, Issue 4    

Is Veterinary Medicine a
Time for Money Business?

Upcoming Events

VSPA Meeting
Vancouver, Canada
May 17-19, 2017

VetPartners Meeting
Indianapolis, IN 
July 19-21, 2017

AVMA Conference
Indianapolis, IN 
July 21-25, 2017



In general, veterinary practices are not, as we refer to them in the business world, a scalable businesses model. This means, that it is often difficult for a practice to easily accommodate a growing amount of work. There are several reasons for this including limitations on facility size, unpredictability of case requirements and, most importantly, the number of hours in the day!
So how can you, as a practice owner, grow your practice (and your income) without working endlessly? In other words, how can you improve the scalability of your business?
First, you have to recognize that everyone in your practice, including yourself, is replaceable. This means that you need to set your practice up so that it will operate smoothly whether or not you are there. I can already hear you saying: "My clients won't see anyone other than me." That may be true because that is the expectation that you have encouraged and supported. What if you became ill, needed surgery or had a family emergency? Would your clients stop taking their pets to your practice when they are ill? Our clients, like us, are creatures of habit. When faced with the choice of taking their animals to the same practice with the same support staff (even if they see a different doctor) as opposed to finding another practice with which they are completely unfamiliar, they would likely still come to your practice. And I would argue that if they wouldn't, they may not be clients worth keeping. So, hire a new associate, or contract relief veterinarians to allow you to a) spend more time managing your business, b) see more clients, or c) take some (much needed!) time off.
Second, set your business up to make money while you are not there. This means adding boarding, day-care and grooming services (if your space allows) and delegating as much as possible to your support staff. While many veterinarians will tell you that boarding, day-care and grooming services often are more trouble that they are worth, these services allow you a passive income stream where money flows to your business while you are home with your family over the holiday weekend, away on vacation, and even while you are sleeping. If you feel you don't have time to manage the day to day operations associated with these services, hire a good practice manager or promote one of your support staff who shows promise. The return on the investment in their salary increase will likely be well worth it!
Third, if you haven't already done so, hire a good practice manager. While it may seem daunting not to be in complete control of the practice books and finances, the highest and best use of your time is generating revenues for your practice by being a doctor. Look for someone with experience in veterinary practice management and consider hiring someone who is certified, even if it is at a premium rate. Also, make sure your practice manager is dedicating 100% of their time to this task. If you have your practice manager cover the reception or fill in as a technician when you are short staffed, you will need to spend more of your time on managing the business.
Finally, what if your facility size is limiting your growth? Some smaller clinics have only one or two exam rooms making it very difficult for two doctors to work at the same time or even for one doctor to see multiple clients at a time. If this describes your practice, you should seriously consider expanding or relocating your facility. While this certainly requires a significant upfront investment on your part, if your intent is to own and run your practice for at least seven to ten years, you will likely be able to repay this investment through increased revenues and profitability. Additionally, the value of your practice will increase not only by virtue of having a new and improved facility, but also because of its increased profitability. And if you have been sitting on the fence for some time about this as an option, keep in mind that interest rates (and construction costs) are on the rise. The longer you wait, the more this will cost you in the future.
If you are currently renting space, consider purchasing or building a new facility. This will allow you to hold the real estate in your personal or in another entity's name, establishing an additional passive income stream (rent) for yourself. Owning the property also provides added security to lenders and may allow you to secure a more favorable interest rate when financing your expansion.
Ultimately, if you want your practice to grow its revenues, net income and value, you need to increase its capacity. Remember, even Ray Kroc started with one restaurant before McDonalds became a global empire. 

What stage are you at in the Practice Lifecycle?