Building Your First Veterinary Practice

Author:
Publish date:
Credit: Courtesy Animal Arts

Credit: Courtesy Animal Arts

Since the start of vet school, you’ve dreamed of the day your practice could support a clinic—a space for clients to bring their horses when they’re in need of specialized treatments or procedures. After years of hard work, your business has grown to the point that it can sustain a brick and mortar building.

While building your own practice is a celebratory occasion, it can also be one of the most frustrating and overwhelming undertakings in your career.

Before leaping into a construction project, consider why a fixed practice (having a building) makes sense for your business. “Have a clear vision of your goals and what you hope to achieve with your new facility, as well as an understanding of your current and future needs,” said Tony Cochrane, AIA and partner at Animal Arts, an architecture firm in Boulder, Colorado.

Wayne Usiak, AIA, NCARB, architect and CEO at Building Design for Animals (BDA) in Albuquerque, New Mexico, said you should ask yourself, “What are the things a fixed practice will allow me to do that an ambulatory practice won’t?”

Veterinarians often choose a fixed practice to reduce the amount of time driving between calls. “Does driving between calls mean you are making less money, or are you charging clients to account for the drive time?” he questioned. Another reason veterinarians opt for a fixed practice is to increase efficiency.

“A veterinarian can be more productive,” added Usiak. “They can hire technicians and work on two or three clients at the same time.” As a result, additional services can be offered and billable hours increased.

A fixed practice has the potential to improve patient outcomes, said Usiak. “They can practice higher-quality medicine in a controlled environment that has proper lighting, sanitation and access to needed tools,” he said.

Veterinarians often don’t consider that a fixed practice can eventually become a source of retirement revenue.

“Building a practice can be a great source of retirement,” Usiak said. “When [the owners] are ready to retire, they can sell the practice, keeping the building, and become a landlord of the building—thus generating a rent revenue—or sell the practice (clients, building and land) outright.”

But despite all the benefits, before you start it’s important to understand all the implications for your business.

“We ask clients, ‘How big are you comfortable getting? Are you comfortable managing a practice or will you need to hire a practice manager?’ ” Usiak said.

Building Considerations

After determining the implications a fixed practice has for your business, it’s important to understand the construction project.

“Construction is only one phase of building a fixed practice,” said Cochrane. “Building a building of any sort is an expensive, complex and imperfect process. This is an overused statement, but ‘do your homework’ and know where you will run into pitfalls.”

Construction projects generally require 12-15 months to complete, and the process can seem overwhelming.

The following advice offered by Cochrane and Usiak can help you build a clinic that meets your needs and saves you time and frustration.

Select Your Team

Seek a team of professionals with experience in equine veterinary clinics. “Your team should include a realtor, lender, architect, builder and occasionally someone to push your project through pre-development and other government review and entitlement processes,” Cochrane said.

General architects, banks and builders are talented, proficient individuals; however, without a team who understands equine veterinary practices, delays and expensive change orders can quickly derail a project.

“Go talk to someone who has done this before, and not necessarily a colleague,” Usiak emphasized. He advised hiring an architect who specializes in equine veterinary clinics or a practice management consultant who can be impartial and has experience.

Delays often occur with local municipalities and increasing Department of Conservation (DEC) regulations.

Choose a Location

Finding a site that is convenient, easily accessible and affordable can be tricky. Find out if the parcel you’re interested in has been surveyed to guarantee the acreage is correct. A survey will show the property boundary lines, which should be flagged out, as well.

Ask the seller whether the property has a clear title and is guaranteed to be free of liens, taxes or easements.

“Focus on location, zoning of site, size of site, access from roads, availability of utilities, etc.,” Cochrane added.

Typically, equine veterinary practices are located in rural areas. That means you might have to pay to extend municipal services such as water, sewer, gas, etc. Alternatively, you might need to drill a well, install a septic system, use propane or oil, etc.

“It is important to have an idea of what it costs to add these utilities before making an offer for a site,” he added.

Build a Budget

Budgeting to build a practice takes into account more than land and construction costs. “Project costs can be separated into construction costs, soft costs, site development and government- use review and equipment costs. The overall project costs can be as much as 1.5 (or more) times the cost to build the building,” Cochrane explained.

Creating a comprehensive budget ahead of time will save frustration and the potential for overspending.

“Excluding land costs, 50-70% of the budget will be related directly to building-related construction,” Usiak said. “[Another] 10-20% of the budget will go to site development costs that can include, but are not limited to, grading, installation of a parking lot and driveway, drainage, sewer or septic systems, retention ponds and utility installation.”

Still another 10-20% of the costs are owner-managed expenditures that include furniture, fixtures and business systems (phones, computers, etc.). Project management financing that includes construction loans, construction loan interest, appraisal costs, impact study fees and similar expenses is also classified as owner-managed costs.

At least 5-10% of the budget should always be set aside as contingency funding.

Design Essentials

Your budget will determine the amenities in the final design. Luxuries might not be an option, but there are essentials that every practice needs.

“Even small practices need a place to unload a horse, a big space for examining the horse and for basic digital X-ray and ultrasound, and a room with stocks for minor procedures,” Cochrane said. “They’ll also need an oversized ‘stall’ where knock-down could occur, support facilities for field services such as a garage, lab, office space, laundry and utility room, and a small medical barn.

“While your current plans may not include a surgical suite, discuss all possible future expansions so that a building is designed to cost-effectively account for future expansion,” said Cochrane.

Take-Home Message

Construction projects are never as easy as they appear and often extend beyond planned completion dates. Changes are often necessary to finish a project within budget. Be flexible and understand that if you’ve done your homework and assembled a good team, the final space will be worth the wait.

“Know that issues that arise almost always work themselves out, and that a bit of patience, a sense of humor and an occasional deep breath are all very helpful,” Cochrane concluded.