The decision to start a practice is an exciting one, but the detailed planning can be daunting. The process of preparing to open a practice can feel insurmountable, and even developing a structured to-do list can be challenging.
Luckily, new resources are now emerging to support individuals looking to open their own practice. The New Practice Academy, launched as a session at London Vet Show 2023 and supported by NVS Group, is one such resource and has inspired this series of articles.
The first article in this series examined the changing veterinary landscape and the need to support new practices. This second article, based on the live panel discussion at London Vet Show 2023, summarises the key considerations for new practices, providing a framework for further planning and research.
Legal structure
First things first: before any other plans are made, the practice’s legal structure must be defined. Most practices are established as limited companies, but unincorporated options include partnership or sole trader set-ups. The tax implications are often the deciding factor, so advice from a business accountant is recommended.
Most practices are established as limited companies, but unincorporated options include partnership or sole trader set-ups
Suzanne Headington, veterinary partner at Hazlewoods accountants, shares some of the points to consider: “The key thing for structure is making sure that you know what you want out of the business, who you’re going into business with, how long you want to be in business for, how much you want to earn from the business and how many vets you want to have in the business. These are all key.” Knowing what you want out of the business – and when – is as important as knowing what you want to put in.
Financing
For many new practices, funding is the first major obstacle. Typically, practices are financed by a combination of savings and a bank loan. With banks requiring extensive details as part of any business loan application, it is highly recommended to consult an experienced accountant who can help to develop detailed projections. These should cover profit and loss, account cash flow and balance sheets over the first two to three years of operation.
A more unusual approach is to seek out private investors, offering equity in the business in exchange for funding. This is typically more viable for practices offering a unique business concept.
Premises
While purpose-built premises may be the end goal for some practice owners, starting a new practice typically involves renovating existing premises.
Key considerations when picking premises include:
- Parking: this should be prioritised not just for clients but also for couriers and staff. Limited parking can rapidly become a major barrier to growth
- Expansion capacity: from the number of consult rooms to waiting room size, it’s vital that new practices have space to grow for at least their first two to three years
- Licensing: it is not possible to license all buildings as veterinary practices, so this needs to be checked before decisions are made
- Local demand: this depends on numerous factors, including the local pet, horse or farm population density, competition, the affluence of the area and whether a practice can fill a specific niche
- Costs: lower-cost options can be a priority when starting, but it’s worth remembering that a practice’s premises can make or break the business. A more expensive location or larger building may cost more but could significantly increase revenue long-term
Martin Riley, managing director of NVS Group, is keen to support new practice owners and has a tip for those looking for their first premises: “As our sales team visit veterinary practices across the country, tapping into the experiences of our local territory managers can provide crucial insights for those looking to open their own practice.”
Suppliers
When it comes to suppliers, new practices have many decisions to make. One of the main decisions is the choice of a primary wholesaler with whom the practice will need to build a long-term relationship. Choosing a reliable wholesaler that offers a wide range of products and services with quick delivery times, easy returns and helpful staff can save significant time and effort.
As managing director of NVS Group, the UK’s market-leading veterinary wholesaler, Martin comments: “Consolidating suppliers rather than adopting a mix-and-match approach will enhance efficiency while ensuring the best service and convenience for practices.”
New practices will also need to source larger pieces of equipment and choose providers for services such as laboratory diagnostics. For services in particular, the right provider can offer ongoing support and advice to help new practices thrive.
David Charvill, director of laboratory services at NationWide Laboratories, has worked with numerous successful new practices. He advises, “There are so many factors that can influence the decision to work with a lab, from basic costs to the quality of their courier service – but the key factor is the support and advice they can offer, not just during set-up but on an ongoing basis as the practice grows and develops.”
‘There are so many factors that can influence the decision to work with a lab, from basic costs to the quality of their courier service – but the key factor is the support and advice they can offer’
He continues, “Are we competitive on those other factors? Certainly, as part of the NVS group we can offer a great-value service. But our priority has always been the people we support and the relationships we build.”
Practice management
The most visible aspect of any practice’s management is its practice management system (PMS). Tony Houghton, managing director of VetIT, echoes David’s advice, “There are so many brilliant parts of the VetIT system that I could talk about, but at the end of the day, our focus is the relationships we’ve developed with the practices we work with. Every aspect of our service has been built around practices’ needs.”
He adds, “We know starting with a PMS can be stressful, especially for a new practice where everything’s a learning curve. That’s why our support team are always on hand to help the practices get the best out of their set-up.”
Practice management behind the scenes can be more of a challenge. Balancing the demands of starting a practice with learning the details of HR, bookkeeping, payroll management and more can be difficult. For most new practices, it’s advisable to consider outsourcing at least some of these roles to external organisations.
Marketing and recruitment
Marketing and recruitment are closely linked when opening a new practice, as both rely on the practice having a clear, communicable identity with consistent messaging.
On the topic of recruitment, Martin highlights that “you really need to understand what you are offering as an employer and how you differentiate yourself from the next employer along the road”. Indeed, in the current competitive recruitment climate, this is more important than ever. But the same principles apply to new clients – a new practice’s marketing should focus on how it stands out. That can be as simple as being independent, or a more complex niche that targets a specific demographic.
You really need to understand what you are offering as an employer and how you differentiate yourself from the next employer along the road
Either way, marketing your practice’s identity will require consistent effort, starting well before opening. A multimodal approach is best. While a strong website and social media presence are important, more traditional methods, such as handing out physical flyers and actively asking new clients to spread the word, can potentially be even more successful.
Where to next?
While this article provides an overview of the steps involved in establishing a new practice, it’s far from comprehensive. The lack of detailed resources for new practice founders is what inspired NVS Group to release The Modern Vet’s Guide to Opening a New Practice. This comprehensive e-book offers an unparalleled insight into the planning behind a new practice, covering all the topics discussed here and more. The free guide can be accessed here.
