Skills and experience
Passion alone isn’t enough to succeed in business. Yes, you’ll need a love for animals, but you’ll also need to be pragmatic, numbers-oriented, and bring the right sum of skills, experience, and ambition to the table.
- Veterinary expertise: In addition to a solid clinical background, you need to understand the veterinary landscape, including emerging technologies, pet owner trends, and market opportunities. A deep curiosity and passion for animal health are incredibly valuable in an industry that is constantly evolving.
- Relationship building: Success relies heavily on building strong relationships. You’ll need to lead and motivate teams, build trust with clients, and maintain good relationships with vendors. Be compassionate. Listen. Take the time to understand people’s needs and values, and you’ll earn their trust and respect.
- Operational skills: Strong operational skills are key. This involves optimising daily workflows, finding the right balance between clinical and administrative tasks, and managing resources effectively. Financial management skills are crucial for overseeing budgets, cash flow, and profitability.
- Strategic planning: Practice owners need to think strategically about growth, market positioning, and long-term goals. Be prepared to use your problem-solving skills to address the inevitable challenges that will arise, and get comfortable with taking calculated risks to achieve business objectives.
Don’t underestimate the challenges of running your own business. You might have years - even decades! - as an employee in the veterinary world, but that doesn’t necessarily prepare you to be an effective business owner.
Surround yourself with a team who shares your vision and complements your skills, and be prepared to navigate the challenges of practice ownership with determination and resilience.
The vision
Now, it’s time to visualise your practice. Define the scope of your services. Narrow down your options into a structured service offering so that you and your clients are on the same page come opening day.
What animals do I want to treat?
Will I focus on general care, or will I offer specialty service?
Will I provide emergency or after-hours service?
Am I going to offer wellness plans and preventive care packages?
Do I need to work with referral hospitals?
Can I implement mobile services?
Will I offer grooming, boarding, or daycare services?
This is also a good time to think beyond the walls of the practice. Consider your personal goals and priorities, and how running a business will fit into those broader life plans. Ask yourself:
Work-life balance: How will you manage your time between the clinic and personal life? Are you prepared for the long hours and intense responsibilities that come with practice ownership?
Personal considerations: Do you have family or personal commitments that will affect your availability? What role will your hobbies and interests play in your life outside of work?
Long-term vision: What are your long-term goals for the practice and for yourself? How will owning and running this practice align with your personal and professional aspirations?
On average, UK-based veterinarians are contracted to work 37 hours per week but actually work 43 hours per week. Owners often work substantially more.
Make a business plan
A business plan lays out your goals, strategies, and financial projections, as well as the resources needed to start and sustain your practice. A well-crafted business plan can also help you secure funding from lenders or investors by demonstrating your practice’s viability and potential for profitability.
Your business plan should include:
Executive summary: Overview of your practice, including mission, vision, and key objectives.
Business description: Detailed description of the practice, services offered, and target market.
Market research: Analysis of the local market, competition, and potential client base.
Marketing strategy: Plan for attracting and retaining clients, including branding and advertising.
Operational plan: Outline of day-to-day operations, including location, facilities, and equipment.
Management and staffing: Organisational structure, roles, and staffing plan.
Financial plan: Budget, revenue projections, break-even analysis, and funding needs.
Legal and regulatory compliance: Information on licences, insurance, and legal considerations.
Risk analysis: Identification of potential risks and strategies for mitigating them.
Growth and exit strategy: Plans for future expansion and long-term goals.
Consider including a SWOT analysis in your business plan. A SWOT analysis is a strategic planning tool used to assess internal strengths and weaknesses, as well as external opportunities and threats.
- Strengths (S): Internal factors that give the business a competitive advantage. E.g., location, staff experience, strong brand.
- Weaknesses (W): Internal factors that may hinder the business. E.g., limited resources, lack of specialised services, excess demand at peak hours.
- Opportunities (O): External factors that the business can leverage for its advantage. E.g., new diagnostics equipment, growing demand for veterinary services.
- Threats (T): External factors that could pose challenges or risks to the business. E.g., competition, economic downturns, regulatory changes.
Assemble a planning committee
Start building your team. As your plan takes shape, surround yourself with experts who understand the nuances of the veterinary industry. Engaging these professionals early in the planning process ensures that your practice is built on a solid foundation.
Veterinary consultant: A seasoned veterinary consultant can offer industry-specific insights, helping you navigate challenges unique to veterinary practice ownership. They can advise on business strategy, clinic setup, and operational efficiency.
Accountant: Engaging an accountant early on will help you understand the financial aspects of starting a practice, including budgeting, tax planning, and financial projections. They can also advise on the most suitable business structure and help manage cash flow effectively.
Legal advisor: A lawyer specialising in veterinary or healthcare law can assist with business registration, contracts, lease agreements, and compliance with industry regulations. They ensure that you’re legally protected and compliant from the start.
Other practice owners: Talk to a range of established practice owners and learn about their experiences. Pick their brains, learn more about what worked and, perhaps more importantly, what didn’t.
Architect: A professional experienced in designing veterinary facilities can optimise the layout of your property for workflow efficiency, client experience, and regulatory compliance. They can help with everything from space planning to obtaining permits.
HR consultant: Setting up good HR practices is crucial for staff recruitment, retention, and compliance with employment laws. An HR consultant can help you establish contracts, staff training programs, and policies that create a healthy work environment.
Market research
Thorough market research is crucial to ensure the viability and success of the business. Think about the needs of the community and where your clinic will fit into the wider business landscape.
Local demographics: Analyse the population size in the area you're considering. Higher population densities may indicate a larger potential client base. Research the percentage of households that own pets in the area and assess local average income levels.
The competition: Map out the services offered by local competitors, and use that information to determine the value proposition for your clinic. Read online reviews of your competitors to understand what clients value and where they might be falling short.
Market forces: Consider the health of the local economy - downturns can impact pet owners’ willingness to spend on non-essential services. Investigate trends in pet ownership in the area. Research the availability of qualified veterinary professionals in the area, as well as wage expectations.
The results of your research will determine the viability of your practice and help shape the rest of your business plan.
Location
A good location is one of the most important aspects of running a successful business. There are a bunch of factors at play here, including:
Affordability: There’s a sweet spot to be found between price, demand, and competition. If the perfect location is out of budget, don’t stress. If you provide a quality service, customers will go out of their way to find you.
Suitability: Is the size and location of the site fit for purpose? Think long-term. Does it have the space to accommodate your future needs as the business grows?
Population: Consider demographic trends. What are pet ownership rates like? Is the population growing or shrinking? How affluent are the nearby neighbourhoods?
Foot traffic: High foot traffic can help you build awareness, attract new clients, and get more walk-in appointments. Note that catering to walk-ins can be tricky, especially in the early days!
Accessibility: Customers need easy access to the business. Parking spots, traffic congestion, building visibility, and access to suppliers all come into play here.
Competition: Consider the current availability of local veterinary services and pet stores. Differentiation becomes essential when breaking into a competitive market with established players.
Buy, build, or rent
One of the biggest decisions to make is whether you’ll buy, build, or rent.
Start by considering how much space you need. As a general rule of thumb, you need about 100 square metres of space per full-time veterinarian, including reception, consultation rooms, and storage. Additional facilities like surgical theatres or kennels may require even more space.
Rent
Renting is often a smart choice from a cash-flow perspective, allowing you to allocate more funds to equipment, staffing, and marketing. It offers flexibility to test your location and scale without long-term commitments. Balance your current needs with future growth - avoid overspending on excessive space, but ensure room for expansion.
Build
Building a facility from scratch is a rare opportunity to design a practice according to your exact specifications. The downside, of course, is that it’s expensive. Expect to pay around £1500-£3000 per square metre in construction costs, depending on location and the scope of the project. That excludes the cost of land, furnishings, and veterinary equipment.
Buy
Buying an existing practice provides access to established, desirable locations that might otherwise be out of reach. You also inherit the practice’s client base, equipment, and operational framework, which can provide a smoother transition.Though you might need renovations, purchasing is usually more affordable than building.
Practices are often valued by applying an earning multiple to the EBITDA of the business, with multiples typically ranging from 8x to 13x. For example, an earnings multiple applied to a practice with an EBITDA of £500,000 would lead to a valuation of £4 million.
Go mobile
You have the option to save on location expenses by opening a mobile veterinary clinic. While there are some tradeoffs to be made here, it can be a savvy way to save on rent, outfitting costs, and equipment.
Costs
There’s no other way to put it: Starting a new veterinary practice can be expensive. Depending on the size of the practice, its location, and other factors, expect to spend a few hundred thousand on renovations, equipment, fixtures, and more before you even open the door.
Then, you’ve got your ongoing costs to consider. That includes things like:
Your largest and most important expense is payroll - expect it to cost about 40% of your practice’s revenue.
Financing
As we’ve learned, starting a practice isn’t cheap. The good news is that banks tend to look favourably at veterinary borrowers, thanks to the stability and revenue generating potential associated with businesses operating within the animal healthcare industry.
Here are some common financing options:
Business loan: The most common option. Most of the big banks offer business loans of varying rates. Secured loans may require collateral, such as property or other assets, while unsecured loans typically have higher interest rates but don't require collateral.
Equipment financing: Equipment financing allows businesses - including aspiring veterinary practice owners like yourself! - to purchase or lease the necessary equipment without having to pay the full upfront cost.
Business partner: Bringing in a business partner can help share the financial burden of starting a practice. Partners may contribute capital in exchange for a share of ownership, which can reduce your need for external financing.
Personal savings: Depending on your business goals and financial circumstances, you may be able to use personal savings as an initial investment or down payment for the veterinary practice.
Business credit cards: Credit cards offer easy access to quick capital and can be a good way to cover day-to-day expenses without stymieing cash flow. High rates typically apply if balances aren’t paid off during the interest-free period.
Government grants: The government often offers various small business grants and start-up loans. These options provide low-interest loans and guidance for new business owners. See this page for more information.
Pricing strategy
Your pricing strategy has a direct effect on revenue and profit. Most practices in the UK use one or more of the following strategies.:
Cost-plus pricing: Calculate the cost of providing a service (including labour, materials, and overhead) and add a markup to ensure a profit. It’s the most popular pricing strategy because it’s quick and easy to implement, and ensures that a profit margin is achieved.
Value-based pricing: Price services based on the perceived value to the client rather than just the cost of delivery. This method considers how much clients are willing to pay for the quality or outcomes of the service.
Competitive pricing: Prices are determined by considering the prices set by your competitors in the market, rather than basing them on customer demand or production cost. This approach helps ensure that your pricing remains competitive within the local market.
Bundled pricing: Offer a package of services and/or products for a reduced price. Despite items being sold at a discounted rate, this method can increase revenue by simplifying client decisions and encouraging more comprehensive care. Common examples include wellness packages and surgical bundles.
Mapping the revenue journey helps with pricing. If you can determine where the practice will generate, spend, and potentially lose money, you can identify opportunities to increase profitability.