Decision Data: Build, renovate or buy new veterinary equipment?

November 13, 2019

A dive into data yields numbers on capital improvements and investments different-sized veterinary practices made and how satisfied the owners and managers were with them.

It can often be difficult for a veterinary practice owner or manager to decide how to change their business model, when to add services and how to adjust for changing times. The team at dvm360 has been working with two of the sharpest veterinary analysts around (John Volk and Dr. Karen Felsted) to examine major changes practices have made and how happy the decision-makers were when all was said and done.

For the next few months, we'll be sharing results from their study as well as resources and commentary to help you make a decision as a practice owner or manager-or make a plan happen once you've decided.

This week, we look at the question of capital improvements or investments.

NOTE: Categories are based on the survey question, “What were your practice's gross revenues in 2016?” and questions about 2017 behavior and decisions.

 

Percentage of practices that made capital improvement or investment decisions

Practices with gross revenue of ...Percentage
Less than $500,00041%
$500,000-$999,00050%
$1 million-$1.5 million51%
$1.5 million-$2 million49%
$2 million-$3 million56%
$3 million-$5 million68%
$5 million or more56%

Source: dvm360 Decisions Survey; Dr. Karen Felsted of PantheraT Consulting; John Volk of Brakke Consulting

Capital improvement or investments made

Bought practicePercentage
Less than $500,0007%
$500,000-$999,0004%
$1 million-$1.5 million3%
$1.5 million-$2 million0
$2 million-$3 million4%
$3 million-$5 million8%
$5 million or more7%
Built/renovated practice
Less than $500,00022%
$500,000-$999,00021%
$1 million-$1.5 million26%
$1.5 million-$2 million24%
$2 million-$3 million42%
$3 million-$5 million40%
$5 million or more53%
Bought new/replacement equipment
Less than $500,00088%
$500,000-$999,00090%
$1 million-$1.5 million91%
$1.5 million-$2 million87%
$2 million-$3 million81%
$3 million-$5 million75%
$5 million or more73%

Source: dvm360 Decisions Survey; Dr. Karen Felsted of PantheraT Consulting; John Volk of Brakke Consulting

 

No. 1 reason for capital improvement or investment*

To increase quality of medical care41%
Practice growth18%
To increase efficiency14%
Increased demand for services11%
Added services that needed equipment9%
Outgrew facility4%
To position practice for sale2%

*Only responses of more than 1% were included.

Source: dvm360 Decisions Survey; Dr. Karen Felsted of PantheraT Consulting; John Volk of Brakke Consulting

No. 1 benefit seen after capital improvement or investment*

Increased quality of medical care43%
Increased efficiency18%
Better working conditions13%
Improved client service11%
Additional revenue4%
Positive client feedback3%
More competitive in marketplace3%
Improved profitability2%
No benefits3%

*Only responses of more than 1% were included.

Source: dvm360 Decisions Survey; Dr. Karen Felsted of PantheraT Consulting; John Volk of Brakke Consulting

Satisfaction with decision

Extremely satisfied43%
Moderately satisfied29%
Satisfied26%
Dissatisfied1%
Moderately dissatisfied<1%
Extremely dissatisfied<1%

Source: dvm360 Decisions Survey; Dr. Karen Felsted of PantheraT Consulting; John Volk of Brakke Consulting

For money's sake

We also asked practice owners and managers if the capital investment was made for tax purposes or availability of excess cash? The answer is, “Yup.”

  • 58% for for tax purposes
  • 62% to use excess cash.