If you’re like most vets, you chose your career path more for your love of animals rather than a desire to run a business. Your years of training to become a vet may not have focused a great deal of time on business studies. So, it’s understandable if overcoming all the initial hurdles of establishing a successful veterinary practice may seem overwhelming.
There are five key items recommended by Scotiabank Healthcare & Professional Banking Specialists that can help make the process go smoothly.
- Find a mentor
Lisa Nolan, Senior Healthcare Professional Specialist at Scotiabank, has many veterinary clients who are new to running a practice. Her advice to someone starting out is to spend at least the first two years after graduation working for someone else. “Find someone who can be your mentor,” says Nolan. “They can not only provide you with an opportunity to improve your vet skills but also give you a chance to learn some of the essential business basics you’ll need to run a practice.” Speak to your Specialist about mentorship opportunities that are available to support you.
- Plan and ask a lot of questions
Before starting on your own, the most important thing you can do is to develop a business plan. “If someone comes to me before they’ve signed a lease or applied for a loan, I’m in a far better position to help them avoid some common mistakes,” says Nolan. “I can share information and advice not only on what the bank requires from them for financing but also on other essential elements they need to consider.”
Ensure you have a strong circle of advisors who understand the veterinary profession: a banking specialist, financial advisor, lawyer, accountant and insurance advisor. “The best advice I can provide to someone starting a practice is to surround themselves with the right people who can provide the essential advice to help develop and execute a robust business plan,” says Nolan.
If you’re taking over a lease, you need to review all the clauses carefully, including terms like demolition clauses. Reviewing the lease with your lawyer prior to signing is highly recommended. Furthermore, lawyers can help create an employment contract for future staff to sign and advise on other human resources matters. It’s also crucial to consider financial projections, incorporation and tax optimization. There are many factors to consider, so speak with your accountant early on and get advice on how to structure your practice. While engaging your lawyer and accountant for additional support, our Specialists can provide key advice on how to structure your practice financing and work with your trusted circle of professionals. Preplanning ensures all such issues are accounted for and can help avoid costly mistakes down the road.
- Beware of hidden costs
“Financing a veterinary practice is very different from financing a home,” says Tom Apostolis, Regional Director, Healthcare & Professional Banking, Eastern Canada at Scotiabank. You don’t need to provide a down payment. “We provide financing for up to 100% of the cost and allow an interest-only grace period,” says Apostolis. While this can be extremely helpful for those setting up a vet clinic for the first time, it’s wise to have a safety net.
Since the beginning of the COVID-19 pandemic, there’s been an increase in building costs. Whether you’re building a new clinic or renovating existing premises, a contractor may suddenly find they have additional expenses that weren’t initially accounted for and will pass those costs onto you. Having a contingency fund or savings plan is prudent because obtaining additional financing may not always be possible. Rising interest rates may also cause an increase in monthly payments that you must be prepared to cover. “Setting aside additional funds, especially in today’s economic climate, is essential,” says Apostolis.
- Considerations for buying an existing practice versus setting up a new one
There are advantages and disadvantages to buying an existing veterinary practice versus establishing a new one. Your initial setup costs tend to be lower when you buy an existing practice. The practice is up and running, so you don’t have to buy new equipment and you will already have an established patient base. The challenge comes if you want to make changes to the business. If you have a new vision for the practice, it may take time to get there, and you could drive away some patients who may not be comfortable with the change. In addition, there are other things to consider such as whether the premises may need to be renovated and older equipment may need to also be replaced or repaired.
You may also experience staffing challenges. While there can be advantages to inheriting an existing staff who already know how things are run, they may not be open to change. Lavern Stewart, Senior Healthcare Professional Specialist at Scotiabank, says she always suggests that those buying an existing practice should wait six months to a year before making any significant changes. “Keeping things status quo at the outset can help ensure a smoother transition.”
- Don’t forget about work-life balance
A recent study of Canadian veterinarians1 found concerning levels of stress and burnout in the profession. Along with the emotional challenges of the profession itself, many reported increased stress due to recent staffing shortages and increasing corporate competition. There’s also been a spike in pet ownership during the pandemic resulting in a higher demand for veterinary services.2
Stats released by the Canadian Veterinary Medical Association also indicate that 62% of Canadian vets today are women.3 And that number is set to increase. Women constitute 80% of the veterinary college student population in Canada and the U.S.4 That means many are also working hard to maintain a work-life balance that may include parenthood.
While there’s no simple answer for how to achieve work-life balance, connecting with a Scotiabank Specialist and having a financial plan in place can help you stay on track and provide tremendous peace of mind. A Specialist can help support you through every step of setting up your practice. Many women vets also share the burden of responsibility by establishing their practice as a partnership. “Some even plan their families in a way that ensures they don’t both take their parental leave leaves at the same time,” says Nolan. Having less on the financial to-do list can allow you to carve out time for your health and wellness.
To help women-led practices succeed, The Scotiabank Women Initiative® was designed to provide women with resources, tools, workshops and mentorship opportunities to support their professional and financial futures.
Serving as a trusted partner is what Scotiabank Healthcare & Professional Specialists are all about. Our specialists provide holistic and comprehensive advice and support. “What makes us different is our years of experience advising healthcare professionals on their practice and personal financing needs,” says Nolan. Our specialists share the options and solutions available during parental leave. “We don’t just help veterinarians arrange financing. We understand their profession at an in-depth level and provide advice to support them in their practice and at every stage of their career.”
For more information and customized advice and solutions to help you launch and grow your practice, contact us today.