Veterinary practices can be very good businesses. However, most veterinarians get very little business education in their formal education. The result is often a veterinarian who makes many poor decisions that can be very costly.
A healthy veterinary practice that is managed closely can yield significant earnings or profits each year. Understanding how to grow a veterinary practice and how to manage it well can result in a business that has significant value in the market. Veterinary practices, like most businesses are valued based upon their earnings history. The equipment typically isn’t worth much by the time a practice is being considered for sale. The real estate might have significant value, depending upon its location, the quality and flexibility of the improvements on the land, and if the practice has significant value and a history of paying rent to the property owners.
Therefore, it is in the owner’s best interests to obtain quality education (maybe from the school of hard knocks) in business areas such as accounting, finance, marketing, inventory management, and human resources management. These topics are important to running a quality veterinary practice and to ensuring that earnings and profits are optimized along with customer care, and building a quality staff to care for the needs of the clients and patients.
A common scenario in veterinary medicine is that a practice owner doesn’t take the time to learn to manage effectively those areas that contribute to building value. Then at the end of their career, they seek to sell their practice, only to find that their practice has no documentable history of generating profits, or a vibrant staff and client loyalty. There is very little that is valuable to someone who might have interest in purchasing the practice.
Avoid these mistakes. Engage and learn effective management. Build and document the value your practice creates each year, and optimize your staff and attract a vibrant clientele who have loyalty to the practice. All of these will help you to build practice value.
