Veterinary Practice Ownership: The Good The Bad and The Ugly
For some vets, practice acquisition will be either and ambition or a natural progression on the veterinary career ladder. But it’s certainly not an easy feat. Owning and running a practice is a complicated affair that requires several soft skills, which many leaders lack.
In this article, we look at three of the biggest challenges of ownership, the skills you’ll need to succeed, and why we believe ownership is a brilliant option for those who want to create their own “place” in the veterinary landscape and invest in themselves!
Challenge Number One: Owners Have To Work A Lot
Veterinary practice owners have a lot on their plate. They not only have to deal with business development but also with recruitment, clinical duties, payroll, marketing admin, and much more besides.
Research shows practice owners work an average of 71 hours a week. And even then, there’s still normally not enough time to get everything done!
Unlike veterinarians, practice owners are always on duty. They cannot simply jump ship if the practice is short-staffed or under pressure.
Many owners also struggle with the delegation of tasks and end up balancing both clinical work (which can take up a huge portion of their time) and managerial duties - causing a conflict of interest that can detract from leadership.
Almost all owners also have to invest a huge amount of their available time working in practice initially to get the business off the ground. This can be a trap that many fail to ever escape from, such is the allure and volume of clinical work.
Currently, a large proportion of veterinary leaders are struggling with fatigue and burnout, something we explore in our recently published study on leadership (which you can download here).
Challenge Number Two: Ownership Can Be Costly
How much it costs to set up a practice can vary depending on several factors.
If you're acquiring an existing practice, for example, you’ll be buying goodwill (the relationship value baked into the existing client list and how well the business is run) and ‘stuff’ in the form of materials and equipment.
Well-run practices can cost a lot. If you’re bidding against corporations, you might be unable to compete. If, on the other hand, a practice is badly run, the price tag and demand for this business will be much more manageable.
If you are starting from scratch, you can build a facility as you like. But this doesn’t come cheap (or stress-free), and you’ll have no clients on your books to pay your bills. Either way, you’re going to require cash to get up and running- which will be in the form of private investment, a loan, or your own cash, possibly all three! One thing you never want to be short of is liquidity.
Costs that new practice owners have to consider include:
The price of the acquisition
Staff wages
Fees for drugs and consumables
Equipment costs
Marketing costs
Rent/mortgage costs
This is by no means exhaustive, but it does give you an indication of what’s in store for the new business owner - lots of hungry mouths to feed on a regular, and recurring, basis!
Practice owners in a startup situation must also be prepared to lose money each month as they build up the business to the point of breakeven. How long this takes depends on the demand for the service.
The clinic’s location and your marketing skills (and, dare we say it, sales skills) will be huge considerations. The runway to sustainable profit might be anywhere from six months to three years.
Although the initial cost of practice ownership can be high, the investment does tend to pay off. In the US, the owners of a well-run practice take home more than $200,000 a year than the average vet. However, this figure is highly variable and should not be considered a certainty. There will be many good years where you do well, but also some lean years where you don’t. The old entrepreneurial adage of sometimes you’ll eat chicken, while othertimes you’ll eat feathers is true!
Challenge Number Three: Management Can Be A Real Pain
If you’re starting from zero, hiring and training a new team can be an intensive and potentially problematic process.
Practice owners starting from scratch have to consider a multitude of factors before even going down the road of recruitment.
They have to decide what their practice values are (to help guide the hiring process), decide what their ideal candidate skills match looks like, and what exact strategy they want to use to increase their odds of reaching this ideal person. All of that against a current backdrop of global clinical staff shortages.
Owners who are acquiring an existing practice have the added challenge of adopting a team. Taking over and retraining a new team so they accept a new owner and culture is absolutely not for the faint-hearted.
Fraught with challenges, it takes skill and may prove to be impossible - as you are unlikely to change people’s values. Expect turbulence in the form of pushback and potentially higher staff turnover for a while.
Rebuilding a team is pretty much a nailed-on certainty when you buy a going concern, which is going to take time to work through. But doing so is incredibly rewarding as your new team takes shape.
Whatever route you take, more than half of surveyed clinics are currently short of at least one veterinarian, meaning you are going to have to work very hard to attract and retain talent. And your success in doing so is going to be a crucial factor in your outcomes.
Owning A Veterinary Practice Is Hard… But Worth It.
Ownership is great if you want to be your own boss and have creative control over everything you do. Freedom is one of the most powerful elixirs that entices people to set out on their own. A practice that is run well, with a clear vision, defined values, strong leadership, and a team that works well together is a joy and the financial rewards are potentially great. But there is no guarantee of success, and there are many practice owners who are stressed, burned out, and unhappy. The difference is how well you create a vision, build a team, and make fellow humans happy. Clinical skill matters too, but a lot less than people think.
If You Liked This Article, Then Perhaps You’d Also Be Interested In Our Leadership Training
If you are a prospective practice owner or currently running your own business, we’ve got a webinar that can help you avoid many of the pitfalls others have made when moving into ownership.
During the session, we’ll cover:
1- Classic mistakes leaders make and how to overcome them.
2- The importance of vision and how to create one.
We’re passionate about helping leaders like you, so if you want to take your practice to the next level, click here.
References:
1- ‘Being a veterinary practice owner is hard. But good. But still hard.’ 2 Jun. 2019, https://www.dvm360.com/view/being-veterinary-practice-owner-hard-good-still-hard-0. Accessed 10 Sept. 2021.