The number of solo equine practices in the membership of the AAEP has stayed between 35%–40% for the last 10 years. The 2016 AVMA AAEP Equine Economic Survey showed that 53% of equine veterinarians in the US work in practices with two full-time-equivalent DVMs or less. Part of the reason for so many small practices is the rural nature of much of the country. However, equine veterinarians are also an independent lot, seeking to make their own decisions and live where and how they want.
Results of a 2014 survey of AAEP Listserv members showed that of the 516 respondents, 185 were solo practitioners, of which three-quarters had previously worked in a group practice (excluding internships). Of these, 77.8% were past associates and 22.2% had been owners or partners in group practice.
When asked “What is the primary reason you are now in solo practice?”, dissatisfaction with the practice culture was the most chosen response, cited by more than half of respondents.
Of those previously employed as partners or shareholders in a group practice, 26.7% cited partner disharmony as the primary reason they were now a solo practitioner.
The two most important factors in the decision to go solo among all the respondents were the desire to make their own decisions and a desire to have control over work schedule and life balance. If these questions were asked today, it is unlikely that the answers would be any different.
Advantages to Practice Ownership
One of the biggest advantages to owning your own practice is the ability to shape the business to be whatever you choose as your desired brand identity. Niche practice limited to sports medicine, dentistry or emergency medicine are all possible when you are in charge. As the practice owner, you form the boundaries, make the policies and decide what is appropriate.
There is creativity in exploring marketing, client education and new services. While the often-cited disadvantage is the 24/7/365 emergency on-call responsibility, this in many areas has been transformed by emergency cooperatives of small practices that share emergency duty.
An ambulatory practice is surprisingly inexpensive to start, and many distributors have new practice programs to help these entrepreneurs. Depending on your niche, you might not need to invest in a lot of diagnostic equipment immediately. You can wait until revenues are flowing into your business. But don’t be afraid to equip yourself for success with the tools you need. A great advantage of practice ownership is the profit that is typically produced.
When considering a small ambulatory equine practice with no facility, the big categories of expenses are drugs and supplies (average 25%-28% of total revenue), employee costs (average 30%-35% of total revenue for practices under $2 million in revenue), administrative costs (average 3.5%-4.5% of total revenue), credit card fees (1.5%-2% of total revenue), and facility/equipment costs (average 6%-8% of total revenue). This includes paying the owner veterinarian 25% of their revenue production for their effort as a veterinarian in the employee category.
After subtracting these expenses from revenue, there is a range of profitability of 22.5% -34% if these benchmarks are achieved.
In practical terms, this means for every $100,000 in revenue you can potentially earn $25,000 for effort as a veterinarian, and as much as $34,000 in profit.
It is important, however, to know that loan payments come from your profit, as well as purchases made with cash. So, depending on your obligations, you could have considerably less.
When you start out, your fixed expenses will eat up a larger portion of your revenue until you hit your stride and your production increases. But once you have been in business for a few years, those financial goals you’ve had will become attainable.
Take-Home Message
With a collaborative emergency group, good boundaries and strong financial policies, you can create a satisfying and sustainable life in equine veterinary practice. Making your own decisions, having choices and reaping the financial benefits of your work can make practice ownership a great choice.
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