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Who wants to be a practice owner?
Hone your veterinary skills early in your career and continue to take courses
Up until about the past 10 years, it was almost a given that you would graduate veterinary school and become a practice owner (assuming you were going into practice) in 5 to 10 years out of school, if not sooner. OK, in my case, it was 9 months, but that’s not something I would suggest.
Fast forward to today, and it’s done a complete 360o. The sentiment now is that no, you will not own a veterinary practice. Why not? The reasons abound; but there are some potential key factors:
- Too much student debt
- You don’t want to work that hard
- The regulatory and benefits environment is too challenging
- Too costly to open a state-of-the-art practice
- Too much competition from networks with deep pockets, making it a very risky venture
- Too hard to find support staff and other veterinarians to share the workload
- Today’s veterinarians just want to practice medicine, with little interest in business.
All this begs the question of whether practice ownership for individual veterinarians is dead or alive. My experience in working with veterinary students, Veterinary Business Management Association groups, and recent graduates tells me there is still a heartbeat. Although many new graduates are not particularly interested in being business owners, there are still many others that indicate they would like to own a practice in the future. Is this realistic, and does it make much business sense? From someone who has been involved in practice ownership and multihospital ownership for nearly 30 years, my response is that it makes total sense for the right person. Follow the 7 steps below and see how you feel about ownership after completing the process.
1. Do you have the appropriate medical and surgical skills?
Before considering ownership, these should be second nature, because as a new owner, much of your time and energy will go to running and growing your business. You cannot be stressed or slowed down by everyday medicine and surgery. It takes most practitioners 3 to 5 years to gain the experience and confidence to start multitasking as a practice leader. Ideal candidates have worked at large, busy, multidoctor practices or come from an emergency medicine background.
2. Do you have the temperament?
Practice owners and team leaders should be even-keeled, stable, steady individuals who handle stress well. Your team, clients, and family need ownership to be a good fit for you, or chaos will become the norm. Wanting to own a practice and being the right person to own are 2 different things. Ask your family, friends, colleagues, support staff, and maybe a psychologist or clergyperson to assess whether you are suited for ownership. It’s better to know now before you get in over your head. Practice or business ownership is a blessing to many and a major stress for others.
3. Do you have the right motive?
Why do you want to do this? Is it just about the potential financial rewards and selling it off to big corporate as soon as you can? Or do you feel you can provide top-notch personalized medicine and customer care, a place that will be an employer of choice and something that will be your legacy? Like most things, if you do the right things for the right reasons, success will follow.
4. Do you have the right work ethic?
This is not to insult anyone, but owning a small business is a major commitment and typically requires a lot of time and effort. New owners who are trying to make ends meet often wear a lot of hats and work a lot of hours. Without that devotion, practices certainly can fail. Are you willing to sign up for this?
5. Do you have spouse and family support?
You may be willing to put in the hours needed to make the business successful and see your dreams come true, but if you have a partner and family members, are they on the same page? Does it get old if you can’t make it to some family events or can’t free up weekends for social events? It takes 2 or more to tango, so be sure everyone is on the same page; it’s not worth the stress or potentially tearing your family apart because you had to be a practice owner.
If you made it through questions 1 through 5 and still feel you are a quality candidate to be a practice owner, then you are ready to move onto what I refer to as the due diligence stage. In this stage, you begin looking for the right prac- tice in the right place for the right price.
6. Finding the right practice.
If you’re going down the road of ownership and taking on the risk, you want to stack the odds in your favor, giving your financial backers more confidence in supporting you.
Look for a practice that is for sale in an ideal location—yes, location makes a big difference. Picking an area ripe for growth and where you can practice high- quality medicine makes all the difference in succeeding. Maybe it’s a community you come from, where you will have an immediate following. Considering a “sleeper” practice within a mile or 2 of a large facility may not be a bad move, as you can build up your clinic, with the potential to be a merger target in the future.
b) Business plan:
Be prepared to present a business plan to your financial supporters, be it a bank, family members, or others. The proper demographics, as discussed above, will be an essential part of this. The veterinary business has a great reputation, and you should be able to articulate why you are a stellar candidate to lead a practice and show why the one you want to purchase has great potential. Student debt, if you have a solid credit history, should not be a deterrent. In fact, practice ownership is likely the best way to help dig yourself out of debt if you have any lingering.
7. Having the right team.
Using professionals who specialize in the veterinary space pays dividends. Accountants and management consultants can have a big impact on the success and profit of your business. Saving a few bucks using generalists is not worth it—and that comes from firsthand experience. What gets measured, gets managed, and these professionals can help you manage the important practice metrics such as costs of goods sold and profitability.
It is true that practice ownership is not for everyone. However, looking toward the future of veterinary practice ownership, I believe opportunities will abound to team up with progres- sive practice groups, where in essence, you will be able to enter a variety of joint ventures or partnerships and profit-sharing opportunities with a group. These ownership models will be ideal for those who want to limit the risk of going it on their own. It can be a tremendous advantage to leverage their know-how, buying power, financing, and overall support.
If you believe ownership is in your future, follow the advice above. Hone your veterinary skills early in your career and take leadership and basic business courses, which will allow you to excel in ownership, be it on your own, with other colleagues, or with opportunities with veterinary groups.
Jeff Rothstein, DVM, MBA is the founder and copresident of Mission Veterinary Partners, headquartered in Novi, Michigan, which operates more than 250 veterinary hospitals in more than 30 states. He is a frequent presenter at veterinary conferences and veterinary schools and can be contacted at email@example.com.