By Brandon Finazzo, Head of Practice Solutions

Veterinary medicine is a thriving industry, with pet ownership on the rise in the United States and around the world. According to the American Pet Products Association, Americans spent over $100 billion on their pets in 2020, and this trend is expected to continue. 

This growth in the pet industry has made veterinary medicine an attractive career option, and because practice owners earn more than employed veterinarians ($282,000 vs. $80,000), practice ownership can be even more attractive to some.

If considering veterinary practice ownership, deciding between starting a veterinary practice from scratch or buying an existing one can be a difficult decision. Weighing the pros and cons of each option can make the decision a little simpler.

Starting A Veterinary Practice

Starting a veterinary practice from scratch can be an exciting and rewarding endeavor. Here are some of the pros and cons to consider:

Pros:

1. Control: Have complete control over the direction of your business, from the location to the services offered.
2. Flexibility: Design your business model to fit your lifestyle and goals.
3. New equipment: Purchase new and up-to-date equipment that is tailored to your specific needs.
4. Personalized customer service: Create a personalized customer service experience that can set your practice apart from the competition.

Cons:

1. High costs: Start up costs, including purchasing or leasing a building, equipment, and supplies, can add up quickly.
2. Building a client base: Build a client base from scratch, which can take time, effort and money.
3. Risk: There is no guarantee of success.

Starting A Veterinary Practice Example:

Dr. Sarah has just completed her veterinary degree and is considering starting her own practice. She wants to focus on personalized, high-quality care for her patients and believes that starting her own practice will allow her to achieve this goal. 

She begins by researching the costs of starting a new practice and determines that she will need to secure financing to cover the initial costs. Dr. Sarah spends several months scouting locations and ultimately decides to lease a building in a growing suburban area. 

She invests in new equipment and starts building her client base through word of mouth and social media. Within two years, her practice has become a thriving business, and she has developed a loyal client base.

Buying A Veterinary Practice

Buying an existing veterinary practice can be a quicker and less risky option than starting from scratch, but it also has its own set of pros and cons:

Pros:

1. Established client base: Take advantage of a more immediate and steadier stream of revenue.
2. Immediate income: Start earning revenue from day one.
3. Established brand: Save time and effort in marketing efforts because of the existing recognizable brand and reputation.
4. Easier financing: Banks may be more willing to lend money to purchase an existing practice, as there is a proven track record of revenue.

Cons:

1. Lack of control: You may be limited in the changes you can make to the business, such as the location or services offered.
2. Higher initial investment: Buying an existing practice can be more expensive than starting from scratch, as you are purchasing an established business.
3. Reputation: You may inherit a practice with a negative reputation that is difficult to overcome.

Veterinary Practice Purchase Example:

Dr. John is a seasoned veterinarian who is ready to own his own practice. He is considering buying an existing practice in his hometown that has been in operation for over 30 years. The practice has a large and loyal client base, but the current owner is looking to retire. 

Dr. John recognizes the potential of the practice and decides to make an offer. After reviewing the financial records and meeting with the owner and staff, Dr. John feels confident that he can maintain the quality of care that the practice is known for. 

He secures financing to purchase the practice and begins to make some minor changes, such as updating the website and adding new equipment. Within a few months, he has successfully transitioned into the new role, and the practice continues to thrive under his ownership.

The Final Decision

Deciding whether to start a veterinary practice from scratch or buy an existing one is a significant decision that requires careful consideration. 

Starting from scratch offers complete control and flexibility but can be expensive and require time and effort to build a client base. Buying an existing practice provides immediate income and an established client base but can be expensive and limit changes to the business. 

Ultimately, the decision will depend on personal preferences, financial situation, and career goals. Ready to begin the journey toward practice ownership? Whether starting or buying a practice, Panacea Financial is ready to help.

Whether relocating, expanding, starting, buying, purchasing equipment or buying into your practice, we have the tools to help you! Explore practice financing options here.

Panacea Financial, a division of Primis. Member FDIC.