The American Pet Products Association’s 2022 National Pet Owners Survey (APPA) reveals that pet ownership continues to be a significant part of U.S. households, with 70 percent or 90.5 million families owning pets. In 2022, total spending on pets reached $123.6 billion, a 19 percent increase from 2020, with the highest expenditure category being surgical veterinarian expenses.

As the demand for pet health care continues to rise, it’s essential to understand the veterinary practice business if you’re considering starting, selling, or buying a veterinary practice. Hiring a professional is highly recommended to help you navigate the complex world of veterinary practice business and ensure you get the best possible deal.

In this guide, we’ll cover the essential things you need to know about general veterinary practice business. So, let’s get started!

2024 Trends of Selling Veterinary Practice

If you’re looking to sell your practice, now is a great time to do so. Why?

When determining the value of a veterinary practice, an operating profit, also known as EBITDA, is first established. The value is then determined by applying multiples to that number based on different factors. The veterinary market peaked during the pandemic. It has been going down since then due to tough economic times. However, the multiples are still higher than historical averages.

But before we talk about how to buy a veterinary practice, let’s focus on the trends in such acquisitions.

Veterinarians often seek to sell their practices or animal hospitals to larger veterinarian clinic groups.

The 2023 Brakke Industry Overview predicts that large veterinarian corporations—with greater financial resources and workforce—will likely purchase many smaller ones currently in business.

Many veterinarians are choosing to sell or partner with larger clinic groups because of the benefits they can provide. A large veterinarian clinic group can offer more job opportunities for veterinarians and allow them to work in their field without investing in equipment or staff.

Moreover, veterinarians and large veterinarian clinic groups see an opportunity to create value by combining resources and expertise. Vets can expand their resources and client base by joining others to form a larger group, enabling veterinarians to offer more services and treatments, which makes them more attractive—and keeps clients coming back.

Regional or national companies are also increasing their veterinarian practice buy-in activities.

According to Mark Ziller in a FOX Business interview, co-founder and CEO of Innovative Petcare—a Texas-based company that owns 75 animal hospitals across 16 states—there has been an accelerating trend in which large companies purchase independent practices.

Veterinary practices are typically an excellent investment because they provide steady revenue, and services are in high demand. People want to keep their pets healthy and happy, so there will always be a need for veterinarians and other pet care professionals.

Another reason for increased deal activity is that veterinarians are not treating pets but livestock, farm animals, and zoo animals. This means that veterinarians need more equipment and supplies than ever before, making them better targets for acquisition by large corporations with deep pockets who can afford all these resources, unlike smaller practices.

Fewer younger veterinarians are into veterinarian practice buy-in.

Fewer businesses were acquired in 2022 than in the previous year, according to Brakke—about 300–500 compared with more than 1,000 in 2021.

One contributing factor can be that fewer younger veterinarians are into veterinarian practice buy-in, which means fewer new veterinarians enter the field every year. Today, younger veterinarians are more likely to become employees than buy practices from retiring veterinarians. Because their salaries far exceed what they could have earned as independent practitioners a few decades ago, the desire to open their practice is diminished.

Step-by-step guide on veterinary practice acquisition

When you’re looking to buy a veterinary practice, you want to make sure you’re buying the right one. Remember that this is a long-term investment that will affect your life and career for years to come. It’s important to do your research to make an informed decision about where and how you want to invest your time, energy, and money.

This guide will take you through the process of veterinary practice acquisition.

Step 1: Find a practice to acquire.

The first step is to find a practice that you want to buy. You can search online for veterinary practices for sale and ask your network of colleagues and friends if they know of any practices for sale. If you’re looking for a particular type of veterinarian practice—for example, a specialized clinic for pet maternity—then target your search appropriately.

Step 2: Gather information on the practice.

After finding a practice you’re interested in, it’s time to learn as much as possible about it. Start by talking with the current owners of the practice and getting their perspective on why they’re looking to sell. You can also speak with other veterinarians in your area who are familiar with this practice or chat with one of the clients to give you an insider’s view on how well-liked or respected the current veterinarian practice is within the community.

Step 3: Evaluate your options and your finances.

Once you’ve learned as much as possible about the practice, make sure you understand your financial situation before making any decisions. You should consider whether this is the right time to purchase a practice and if you can afford it.

Step 4: Hire a professional to assist with the acquisition process.

Acquiring a veterinary practice is a complex process that requires careful consideration of multiple factors. Hiring a professional can help immensely. A professional can assist with the practice’s valuation, identify potential risk areas, help with financing options, and negotiate the deal terms. Moreover, a professional has the necessary experience and expertise to help you navigate the legal and regulatory aspects of the acquisition process. By hiring a professional, you can be confident that you’re getting the best possible deal and that the acquisition process will be smooth and efficient.

Working with a broker specializing in veterinary practices is the best way to secure your future as a veterinary practice owner.

Step 5: Conduct due diligence and finalize the deal.

Once you’ve agreed on the terms of the acquisition, it’s time to conduct due diligence. A professional can help you throughout this process and ensure everything is correct. This process involves verifying all the information the seller provides, such as financial statements, contracts, and legal documents, to ensure no hidden surprises after the deal is closed. You should also review the practice’s operational processes, client base, and staff to ensure that everything is in order.

Assuming everything checks out, you can move forward with finalizing the deal by signing a purchase agreement and transferring ownership of the practice. Having an attorney review the purchase agreement to ensure it’s legally binding and protects your interests is essential.

Congratulations, you’re now the owner of a veterinary practice!

How much does it cost to start a veterinary practice?

A common question most veterinary professionals have is if it’s better to buy or start from scratch. According to the Independent Veterinary Practitioners Association, opening a small animal clinic will set you back about $1 million, but starting up a mobile veterinary practice costs much less—around $250,000.

Employee costs are a significant expense for any veterinary practice. Before hiring new employees, you should know how many people you need to hire and their salary levels.

The average veterinary technician earns $36,000; the mean annual salary for a veterinary hospital manager is about $51,000. A veterinary assistant averages around $31,400 per year, while the role of receptionist has an income of approximately no less than 30 grand per annum.

Can a non-veterinarian own a veterinary practice?

Although several states have legalized non-veterinarian ownership of veterinary practices, most still prohibit it. The reason is: State veterinary practice acts make sure that licensed veterinarians (DVMs) make medical decisions—not anyone else.

However, while the standards of practice laws and practitioner ownership doctrine are intended to ensure high levels of care in veterinary medicine, they may keep other professionals—such as veterinary nurses and managers—from advancing their careers through management positions or ownership, making it hard for DVMs who want to expand or sell their practices, because they may need help finding new clients.

Tips on creating your veterinary practice business plan

Once you have acquired or started your veterinarian practice, you can create the practice’s business plan. You can take your veterinary practice to new heights with the right business plan. It helps you keep track of where you’ve been and where you’re going, so you can make smart decisions about the direction of your veterinary practice. Business plans are helpful when applying for loans.

Let’s take a look at some of the best practices for making sure your veterinarian practice business plan turns out great:

Do your research.

Know what other veterinarian practices look like, what they do well, and what they don’t do so well. You can also talk to other veterinarians in your area who have started their own businesses; they’ll likely be able to give you valuable insight into what worked for them and what didn’t.

Identify your target market.

When you’re a veterinarian practice business owner, knowing who your customers are and how they want to be served is important. Knowing your customer helps you decide what services to offer, how much they should cost, and where to advertise them. Once you have identified the target customer, you can start marketing specifically toward that audience.

Strategize and break down your goals to achieve them.

It can be overwhelming to think about everything that needs to be done. To make it easier, break down your goals into small pieces and strategize how each fits your overall strategy. This will help keep you focused on what needs to be done right now so you don’t feel overwhelmed by the big picture! For example, you aim to increase the number of people visiting your practice. In that case, you can break this down into small steps such as learning more about your target audience, setting up social media ads, or doing promotions. The key is to focus on one step at a time so you don’t feel overwhelmed.

Review your veterinarian practice business plan and amend as needed.

Reviewing your practice business plan regularly is good, especially if you are making changes helping you stay focused on what needs to be done and why it is important for your business (and fun!). To make sure that you’re doing things right, keep track of metrics such as revenue, profit margins, and expenses. Review them frequently to see how they are trending over time.

Key Takeaway

Remember, owning and running a veterinary practice requires hard work, dedication, and a commitment to providing the best possible care to your patients. But when it comes to buying a veterinary practice, hiring a professional is crucial in ensuring you make the best investment decision for your financial situation and career goals. With careful planning and execution, you can buy and build a successful veterinarian practice business that provides a valuable service to your community.

We hope you found this guide helpful in learning about general veterinary practice. If you have any questions, please don’t hesitate to reach out!