by: Wilson W. McManus II, DVM, CVPM, Simmons MidSouth –
Most veterinary practice owners at some point in their career have worked as an associate veterinarian, initially learning how to become a practicing veterinarian by gaining experience and managing medical cases. This also enables them to develop important people skills related to client and staff interactions that will serve them well throughout their career. During this time, the economics of veterinary medicine and how a veterinary practice functions as a business becomes apparent. I’ve found in my career that most medically and economically successful practices have ownership that has the ability to blend medicine and business. Without this blend one can be the very best veterinarian but fail miserably as a veterinary business owner or be the very best business owner and fail miserably as a practicing veterinarian. It takes a special person with multiple talents to own and succeed in veterinary medicine today, and many veterinarians are doing just that.
The associate maturation process post-graduation is very important if ownership is a goal. Very few new graduates have the medical skill set to manage their cases proficiently along with enough business experience to own and manage a veterinary practice simultaneously. This all goes back to old adage “Veterinarians receive a license to go out and learn”, and learn we do. This is especially true the first three to five years post-graduation. From our experience at Simmons & Associates, if practice ownership is a goal of the associate veterinarian, it is usually after this professional growth and maturation period that the career introspection process begins for the recent graduate. Due to a myriad of factors during this period, as with most first time jobs, the practice you start out in is usually not the one that you practice in for the majority of your career. We’ve all heard the saying “you learn and make your biggest mistakes medically (hopefully not serious ones) in your first job. Then you inevitably move on to a practice where you end up continuing your career”.
It is during this time, three to five year period post-graduation, that we receive most of the calls to our office from recently graduated veterinarians who are exploring the practice ownership path. Sometimes it involves the purchase of part or all of the practice they are currently practicing in. Many times it is someone who is unhappy in their current role as an associate at a particular practice, and they think that practice ownership under their direction would be a better alternative. Often though, the entrepreneurial light has gone on, and they feel that practice ownership will prove to be financially a better career path. Finding and buying an ongoing practice for sale is many times the answer.
Our discussions often continue with our trying to help them sort out the pros and cons of both – being a highly compensated associate versus a successful practice owner. Through the exploration of the pros and cons of being an associate or owner, we often discuss personal finances and the long-term opportunity both situations provide for their long-term success. Student loan debt is paramount on most minds as well as the ability to have a reasonable expectation of financial independence and freedom. As most of us discover, as an associate, there are only so many medical cases one can see in a day. Accordingly, there is a limit as to how high your income can increase based on your individual efforts. Simply by taking the average number of associate medical transactions per day, multiplied by the average dollar amount of each transaction, then multiply by 20-25 percent gives a reasonable expectation of associate compensation and benefits in today’s market. When we discuss the benefits of practice ownership, it allows owner(s) to not only receive compensation from their own veterinary efforts but also from the efforts of others helping the practice provide medical care, ancillary services, medications and products to their clients. Ownership also allows them the opportunity to create and own an asset outside of normal savings i.e., build equity in a business that being an associate does not provide. The following example gives a hypothetical illustration.
In the final analysis there is really not a right or wrong path. The right path is dependent upon each person’s individual set of circumstances. The good news is that practice ownership is very much a reality in today’s world, and the personal and financial rewards are attainable if you are willing to make the commitment.
Simmons & Associates is available to help you, no matter where you are in your veterinary career. Feel free contact us for a confidential discussion of career goals and how we can help you complete your vision.
For a PDF of this article, CLICK HERE: Practice Ownership, Your Path to Financial Security
Dr. McManus resides in Huntsville Alabama and serves veterinary professionals in Alabama, Kentucky, Louisiana, Mississippi and Tennessee.