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A veterinary practice owner explains how the younger generation of veterinarians can help preserve small local practices.
Was it really 43 years ago, in Ithaca, New York, that my veterinary classmates and I stood up en masse before thousands of perplexed graduates, parents, and guests, waving our rectal sleeves and spelling C-O-W? My career has whisked by so fast that I have to occasionally remind myself of the endless litany of transitions that our profession has experienced, for better or for worse.
Whether it be technology, education, demographics, economics, marketing, communications, practice, ethics, well-being, or culture, I have witnessed and experienced so many changes over the years that I applaud myself and my peers for maintaining any form of sanity and stability as the kaleidoscopic landscape has evolved.
But of all the twists and turns that I have indexed over the decades, my greatest concern and worry is the state of practice ownership. Forty-three years ago, it was virtually every veterinary graduate’s dream to eventually purchase their own practice and experience this profession through personal proprietorship, but so much has changed. Our profession is at a true crossroads. I fear that the not-so-distant future holds a dismal collection of predominantly expansive and expensive corporate-owned practices, a vastly diminished number of locally owned smaller practices, and a dwindling quantity of large animal practices.
The small animal practice dilemma
The explanation for the decrease in smaller practices is multifaceted but not complex. On one hand you have the baby boomers who have retired or whose health (or other issues) persuaded them to leave the profession. Many people in this group who own the large “million dollar–plus” facilities have already sold, or will sell, to the corporate suitors. Congratulations! That leaves a huge number of vibrant, local, smaller practices (both small animal and large animal) for which the owners will have to find buyers. The options for finding a buyer are somewhat limited. One might consult a broker, but the small size of the practice or the sales commission might pose obstacles. Perhaps there is an associate, but are they interested, or can they afford it? What now? Does the owner close the doors and walk away?
With student debt looming over so many graduates, can younger veterinarians even afford to borrow more money in pursuit of a practice? Also, personal and professional lifestyles for Gen X, Y, and Zers may certainly put practice ownership on the back burner or take it totally off the stove top. Is it more convenient to remain an associate? And with regard to the large animal world, statistics point to a dwindling population of entrants into this sector of the profession, despite the fact that many veterinary school entrants look forward to large animal practice upon graduation.
Add up both sides of this buyer/seller equation and the future looks bleak for the smaller-size practice, and, in my opinion, that is a devastating loss for our profession. Veterinary medicine has a long history of flourishing practices that may have just 10 or fewer employees (and that includes the veterinarians). Are we now observing the elimination or extinction of this species? What a shame. These practices have been the backbone and pride of our profession for so many years and for numerous understandable reasons. For one, they are part of the community. They are also owned by someone who lives down the street—a real person! This person is also on the school board, or their child and yours are in the same class at school or are best friends, or you both attend the same place of worship. There is a real connection.
Additionally, the veterinary care that these local owners provide is essential. If they were too close shop, who would replace them? The next practice might be 10 miles away or much further, and clients might not feel comfortable starting all over at a new place. With regard to the large animal practice, the neighboring practice might be 50 miles away!
These practices also provide good jobs and careers for our locality. They hire our friends, our neighbors, and our children.
Finally, we always see the same faces, and that is so comforting. “Dr. Helfat has been my vet for 25 years. He gave my Sophie her puppy shots, and 15 years later, he was the one who gently helped her pass on” or “Every time I call, Sue answers the phone and fits me in” or “Brenda is the only one who I will let near JoJo when it is time for a nail trim.” I could go on.
How the younger generation can help
So here is my pitch to the younger generations who may be reluctant to own a practice—a shout-out to preserve these smaller but vibrant clinics and hospitals that are desperately looking for their next owner.
First, practice ownership is enjoyable. Believe me, I would not have made it 40-plus years as an associate. Owning a practice has given me stability, a unique sense of success and purpose, and many other intangibles that promote a healthy mental well-being, and isn’t this so important and desperately needed at this time in our profession?
Second, owning a practice has contributed enormously to my nonveterinary life. As a fixture in the community, I am recognized and greeted warmly by so many strangers who apparently know me.
Third, I do not profess to be an economist or business advisor but compare “associate” and “owner” and tell me who is better off financially in the end. It is the owner who has a practice worth hundreds of thousands, the valuable real estate, an enviable pension, and decades of tax write-offs. In fact, the American Veterinary Medical Association (AVMA) has occasionally advised that practice ownership should seriously be considered as a means toward paying off student debt faster.
Fourth, practice ownership allows you to practice in your own comfort zone, make all the business decisions, live your dream, buy your own equipment, and control your professional life. Again, I could go on.
Is there a solution to this impending demise of the small practice? I say yes! The younger veterinarians who might courageously contemplate practice ownership should take a look around. Where are some of these practices in the general vicinity or, perhaps, in a different region that might be more appealing? Get to know the owners and send them a letter of inquiry. Possibly give them a call or send an email. Attend local VMA meetings (and join!) or put your quest in the ear of a sales representative you know. Plant the seed. From my experience, just starting a conversation often opens the door to further discussion.
One cautionary note: It is so much easier to buy an existing practice than to start one anew. I have done both. Would you rather walk into a business with thousands of existing clients and their files or wait 5 to 10 years until they slowly arrive? Surely there are exceptional cases, but not many.
The other part of the solution lies with the seller. There must be financial incentives to make this work, such as the following:
A personal loan/note for the sale of the practice (but a standard bank mortgage for the real estate)
A low interest rate over 10 to 20 years
Just 5% down at signing
The survival of the small practice relies upon initiative, incentives, compromise, and a desire to keep on dreaming. I have personally made an effort to support my comments above by recently starting up Veterinary Practice Transition (veterinarypracticetransition.com), a nonprofit that seeks to bring the seller and buyer together in an easy, straightforward manner and with a process that appeals to both parties.
I wish you all the happiness and success that I have experienced and still do. Do not let the flame die out!
Sourced & Written By:
Mark P. Helfat, DVM
Founder and owner of Larchmont Animal Hospital in Mount Laurel, New Jersey.