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Tuesday, December 4, 2012

Starting A Vet Clinic

My last post on Jennifer's email was actually not her main point in writing, though I thought it was certainly worth commenting on.  Here is the last part of her email to me....

My question to you is... what do you think the average expenses are to set-up a private practice? I have figured to start off having 1 vet tech and 1 receptionist and the salary/health benefits etc. But I am not entirely sure of what equipment is needed. I want to have the practice at my home and do house-calls also, so I wouldn't be adding the cost of rent. I know that kennels will be needed,but am having difficulty finding what items are important and what can be added later on. I know some vets coallate with universities for testing or refer to bigger clinics when they are a smaller practice.

I will have to plead some ignorance here, as I've never started my own veterinary practice and don't plan on doing so.  I'm comfortable working for a multi-location veterinary practice and managing one clinic.  I'm sure I could be successful at it but I don't have an entrepreneurial spirit.  Therefore my comments will be based on second-hand knowledge and I'll rely on my readers who have gone this route to chime in.

Jennifer, before starting your own practice I would first look hard at the finances of practice, talk to a veterinary consultant, and get some business classes under your belt as I mentioned in my last post.  If you're planning on opening a practice you should work for someone else first so that you're not learning how to be a business owner and a doctor at the same time.  Get some veterinary experience and learn what the day-to-day running of a practice will be like.  Then you can consider opening a practice.

It's also not going to be as easy as you might think to practice from your home.  First of all you may not even be allowed to do that depending on local zoning laws.  You will need to check with your city and county courts to see if you are allowed to start this kind of business from your home.  Even if you live in the country this may be prohibited and you can get into a lot of trouble by just doing it.  You'll also need to do modify your home.  Most states have strict laws on the facilities of a veterinary practice.  You may need to change your lighting to provide the right lumens.  If you're going to do surgery you will have to have proper ventilation systems installed, as well as a surgery suite.  You must have non-porous surfaces that can be disinfected.  You'll need to make sure you don't have any carpet where parasites and diseases can be harbored.  Depending on the age and setup of your home you may have to rewire the house, knock out some walls, and do other major renovations.  None of this will come cheaply or easily and you'll have to get inspected during the process with a veterinary inspector giving final approval.

Let's assume that you've succeeded in all of this and have a part of your home set aside as a veterinary clinic.  You said that you want to do house calls, which is a completely different situation.  I've been on some house-calls and it's not as easy as you might think.  If you just take some supplies you'll be very limited in what kind of services you can offer.  You will also need to consider bringing a staff member along to allow you to give injections and collect lab samples.  Most owners can't restrain effectively, and if they get injured while restraining their own pet in a veterinary situation, YOU can be held liable for their medical bills, lost wages, etc.  

Let's say that you want to be able to do most services on a mobile basis.  In that case you'll need to bring a lot of equipment with you and will need to invest in the proper storage system for your vehicle, even if you don't have a complete mobile clinic.  The most recent issue of Veterinary Practice News has a cover article on being a mobile veterinarian.  This would be a great article to read.  One section lists equipment that you should consider having:

"Practitioners well-versed in mobile veterinary care offered up some suggestions for medical and diagnostic equipment that every vet on the go should consider owning:
  • Digital scale
  • Blood pressure monitor
  • Traveling centrifuge
  • Portable ultrasound machine
  • Portable digital X-ray
  • Thermography camera"

What about lab equipment?  That will depend on what kind of practice you want to have.  Nowadays most veterinary clinics have in-house blood analyzers.  Yes, you can submit your samples to a major veterinary laboratory, but you may have to wait until the following day before you see the results, delaying your treatment.  In serious cases you'll want the basic answers right away, as waiting 12-24 hours could result in a severely worsening condition.  Radiology equipment is also pretty standard in modern veterinary medicine and not having it can significantly limit your practice.  Most clients would prefer to be able to get all of their services in one place and won't like the idea of going somewhere else for routine lab tests or diagnostics.  If you're going to concentrate on only preventative care you won't need much of this, but you'll also have a harder time being profitable and may not practice the kind of medicine you want.

You also may not want to start a veterinary practice in your area.  As the adage goes, there are three important things in real-estate:  location, location, location.  Your home and particular location may be too far from potential clients or too close to other vets to be successful.  It's recommended to hire a veterinary consultant to analyze your area, including demographics and average salaries.  This analysis can help determine if you really should start where you are or go somewhere else.  Having a practice out of your home to save rent and because it's convenient may sound nice, but it may also end up in bankruptcy if it's not a good place to start a business.

So the bottom line...what does it cost?  From my experience a small, simple, full-service veterinary practice needs around $200,000-300,000 to begin.  Some of my colleagues who have done this may be able to give a different number.  I know it's not difficult for a stand-alone practice to cost $500,000 to $1 million in construction, equipment, and other start-up fees.  Unless you've won the lottery you'll have to get a business loan, and a bank or other loan agent will want a solid business plan in hand as well as some reasonable assurance that you know how to manage a business before they will free up that kind of money.

So adding education and start-up costs, you're looking at having around $300k-400k of loans to pay back.  And now you're starting to see why a $50 office visit charge isn't so unreasonable.

Jennifer, my biggest advice to you is what I said in my last post.  Talk to a consultant.  Take business classes.  Work for a vet and learn what it's like behind the scenes.  Mentor with a vet who will walk you through the business side of veterinary medicine.  Right now I don't think you really understand what being a vet and a business owner is really like.  You can get that education before you get to that point, which will either deter you from that career or help you be more successful.  Either outcome is in your best interest.

For the last two entries I've talked heavily about the business side of being in veterinary medicine.  Though this was intended to coach someone through going into the profession, I think this is valuable for the average client to understand.  Vets really do struggle in their business and there really are many more costs and considerations than most people realize.  Loving animals and being a good doctor simply aren't enough to stay in business.  If clients can understand the challenges that vets face in simply keeping their doors open they may be more understanding of the charges that vet has.