Today's Veterinary Business

DEC 2018

Today’s Veterinary Business provides information and resources designed to help veterinarians and office management improve the financial performance of their practices, allowing them to increase the level of patient care and client service.

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employee payroll, landlord and vendors. You should be able to pay yourself after six months but prob- ably not at the level you are used to earning as an associate. As the business owner, you are last to be paid. You might not be able to pay yourself the going rate for 18 months or longer. If you can't go without a regular paycheck, starting a practice might be too risky for you. Have a Trusted Adviser Opening a business of any kind is fraught with risk, yet they are launched every day. Unless you have experience opening oth- er practices, make liberal use of business advisers. Attorneys, ac- countants, consultants, real estate agents and marketing profession- als are some of the people you might need on your team. (To find experienced veterinary advisers, visit www.vetpartners.org.) You will save money by having your neighbor's nephew's roommate build your website, or by asking your sister, the estate attorney, to review your lease, but you need the industry-specific expertise that will help you avoid common and not so common pitfalls. While you dream of build- ing the perfect hospital, strongly consider opening your practice in leased space and postponing the ideal facility for a few years. Yes, your lease payments will line the landlord's pockets, but you will have significantly less risk. Opening in leasehold space might require loans of $400,000 or more. If you add real estate and a ground-up construction project, quadruple that cost and then some. Building a clinic rather than remodeling existing space will take more time. If you are risk-averse, start small and plan to build five or 10 years later. The value of planning a new practice can't be overstated, but should you have a formal business plan? While veterinary-specific lenders usually don't require one as part of the loan process, most outside lenders do. At a minimum, you will need to create financial projections for the first one to three years the business is open. These projections need to be reasonable, not optimistic. Think about the very first patient to come through the door. It's more likely to be for ear mites than a tibial-plateau-leveling osteotomy. Even if you don't need a formal business plan, you will benefit from putting together an informal plan at a minimum. Think about how you will differentiate your practice from its existing competitors, and the community niche it will fill. Who, besides yourself, will be the practice's key leaders? Will your website have an internet pharma- cy? What products will you stock? How do you want the business to grow, and what services, staff po- sitions and employee benefits will you add, and when? And what will you do if disaster strikes? Planning for success is more fun, but thinking through how to deal with adversity will help you identify resources to turn to if things go sideways. Starting a veterinary practice represents a major investment that will reshape your entire profession- al career and your personal life. Greater risk might be followed by the potential for greater rewards, but nothing is guaranteed. While you can control much of the risk related to the internal operations of the business, you can't control environmental risks like the economy or the emergence of competitors. The street in front of your practice could be closed for weeks due to planned or emergen- cy road repair. Success is never guaranteed, but the investigation and analysis you do before taking the plunge — along with a healthy dose of self-reflection — will make you aware of and better able to mini- mize the risks. Money Matters columnist Leslie A. Mamalis is the owner and senior consultant at Summit Veterinary Advisors. Learn more at www.summitveterinaryadvisors.com.

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