Navigating the Path to Solo Practice Ownership: Key Considerations for Veterinarians
By: Josh Ervasti, Partner, R² Financial Strategies
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As a financial advisor specializing in veterinary clients, I frequently encounter veterinarians who aspire to start their own practice. Specifically, many large animal veterinarians explore the possibility of launching an ambulatory practice after a few years in the field. Transitioning from an employee to a business owner is a substantial step that requires meticulous planning and a clear understanding of several key factors. Here, we'll explore the five core considerations every veterinarian should evaluate before embarking on their practice ownership journey.
1. Define Your Why
The first and perhaps most crucial step in starting your own veterinary practice is understanding why you want to make this leap. Your motivation will be your guiding force through the inevitable challenges of business ownership. For instance, one of my clients, a veterinarian keen on establishing a mobile equine practice, was driven by her desire to build something beyond herself, positively impact her community, and mentor the next generation of veterinarians.
Your reason for starting the business should go beyond dissatisfaction with your current job. If your primary motivator is frustration with your current employer, it's unlikely to sustain you through the tough times. Establishing a more significant purpose, such as improving community veterinary care, becoming a mentor, or building a legacy, will provide the resilience required to persist when the going gets tough.
2. Establish a Clear Vision
Once you've clarified your motivation, the next step is to outline your long-term vision for your practice. Are you looking to create a small, personal practice where you can serve clients one-on-one, or do you envision building a larger enterprise that you can eventually sell or pass on?
Your vision will shape every aspect of your business, from its structure to its growth strategy. For example, a practice intended to be a large enterprise will require a different organizational framework and growth plan compared to a small, personalized service. Knowing where you want to go helps in setting the right course from the beginning.
3. Tackle the Business Side of Things
Now that you have a purpose and a vision, it's time to dive into the "businessy" side of business. This aspect often intimidates new practice owners, but it's essential for sustained success. Key considerations include:
- Bookkeeping and Financial Management:
Determine how you'll handle your bookkeeping. Hiring a professional bookkeeper can be invaluable.
- Profit Margins and Costing:
Understand your costs of entry and operation, and conduct a thorough analysis to establish reasonable charges for your services.
- Suppliers and Inventory:
Decide on your suppliers and how you'll manage inventory.
- Practice Management Software:
Invest in software that can assist with inventory, billing, and scheduling.
Assembling a reliable team, including CPAs and financial advisors, is crucial. They can ensure your finances are in order and guide you through the intricacies of running a business. By focusing on what you’re passionate about and delegating other tasks, you free yourself to provide the best care to your patients.
4. Integrate Your Business with Your Financial Plan
Your practice should serve your financial goals, not the other way around. Owning a business is a significant financial commitment, and it’s essential to align it with your overarching financial plan. Consider how your practice will contribute to your financial objectives and what role it will play in your long-term strategy.
Plan for an eventual exit strategy: Will you sell your business, or simply retire and close up shop? If selling, you need to build value in the business from the start. If closing, ensure you save adequately outside of your business to support your retirement.
5. Regularly Review and Adjust
Finally, recognize that change is inevitable. Periodically reviewing and adjusting your goals, cash flow, and overall business plan is essential for long-term success. Regular assessments allow you to stay on top of industry trends, adapt to new challenges, and continue growing.
Frequent reviews help you monitor progress toward your goals and make necessary adjustments before small issues become significant problems. This proactive approach can distinguish a thriving practice from one that struggles.
Conclusion: Embrace the Journey
Embarking on the path of solo practice ownership is a monumental and rewarding endeavor. While it demands dedication, hard work, and strategic planning, the satisfaction it brings is unparalleled. If you're considering this path, remember that you don't have to go it alone. Leverage the expertise of financial advisors and other professionals to guide you through the process.
Congratulations on considering this exciting step forward. With careful planning and the right support, your dream of owning a veterinary practice can become a highly rewarding reality.
Have a great day!
Advisory Services offered through Commonwealth Financial Network®, a Registered Investment Adviser.