David Murvin & Lisa Tynan
Becoming a veterinarian offers a wide variety of career options. You can be an associate veterinarian at someone else’s hospital, which has the benefit of practicing medicine in one location without worrying about the business side of running a clinic. You can stick with academia and become a research or laboratory veterinarian if you enjoy the science behind it all. Or, if you prefer to widen your scope and have a little more variety in your career, you can be a relief veterinarian and work at multiple clinics. And finally, you can start your own veterinary practice.
There are benefits to each of these choices, but there are also a lot of things to consider, especially when it comes to veterinary practice ownership. We spoke with David Murvin, co-founder of both Roo and PetWell Partners, an owner and operator of veterinary hospitals in Texas and across the country, about what to consider when buying a veterinary practice.
Four key considerations when buying a veterinary practice
- Time – How much of your time, energy, and effort (outside of seeing patients) will it take to get the business to perform in a manner that meets your expectations? Some hospitals are very well run while others might fall into the fixer-upper category (think about team, culture, and processes along with facility). Even well-run hospitals will require a good amount of your energy. Fixer-uppers will involve much more time, effort, and risk; therefore, you should expect a greater return on your invested capital in the event you are successful.
- Capital – Where will you get the money to pay for the business? Debt and equity are two sources of capital. You can raise debt from banks and/or the seller of your practice. Make sure the expected net cash flow from your practice (after paying yourself a market wage) is comfortably higher than your debt service. Equity is the owner’s (your and any partners’) capital investment. Remember: more debt = more risk to your equity in the event of adverse performance. If you are dealing with a bank, they may require a personal guarantee, which extends that risk to other personal assets outside the business. Less debt = less risk.
- Valuation – Valuation should be a function of time and capital sources. Debt has a fixed cost. Equity (your investment) returns should reflect the risk profile of your projections as well as the amount of time, energy, and effort you expect to invest alongside your capital. Make sure the price you pay for the business today allows you to service your debt and generate the risk-adjusted returns you expect for your equity investment.
- Passion – Make sure you have a passion for business. In addition to your passion for veterinary medicine, an interest in business will help you endure the sacrifices and hard work necessary to be successful as a business owner.
There is a lot of pride in ownership, but if the business side of veterinary medicine just isn’t appealing to you, perhaps a relief career is. A relief veterinarian salary can be comparable to an associate or a practice owner without any of the overhead responsibility. In fact, some relief vets even make more than the average full time vet salaries. Roo’s relief vets can take vacation whenever they want without worrying whether their business will fall apart in their absence. They can also go home at the end of the day without the worries of their practice following them there.
If nothing else, working as a relief veterinarian with Roo can give you exposure to a wide variety of hospitals so that if and when you do decide to buy a veterinary practice, you know exactly what kind of clinic you want it to be.
Quote of the day
The greater danger for most of us lies not in setting our aim too high and falling short, but in setting our aim too low and achieving our mark.”
-Michelangelo
