cost of starting a practice?

[JSpitz]

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summary:
1-2 dr practice
~500k for buying a practice
~1-2 million for building one from ground up

start up costs:
real estate
business entity creation(single proprietorship, partnership, LLC)
license of operation and other government regulatory fees
medical equipment
non-medical furniture (includes client waiting area tv)

recurring costs:
license of operation and other government regulatory fees
staff
utilities
insurance

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original blurb:
anyone have hard numbers (or estimates)? if not, i want to discuss the various components of the total cost. obviously total cost varies by geographical location, type, etc etc, so here are some categories in case you know something about a component, but not all (see above):

 

[HopefulAg]

Out of a hat, I'd say about $500,000 if you're buying an already built place in a reasonable part of the country (not California). That may actually be a bit high really, I guess it depends on what the practice you're buying is valued at.

You can read this site to give you an idea of construction costs and the like.

 

[catscatscats]

i'm not sure if you're talking about building your own place up from scratch or not, but i read an interesting blurb in a vet magazine (can't remember which) that said an often forgotten cost is the client list. this only applies if you are purchasing a practice from a vet who is retiring but i thought it was interesting to think about. they said a loyal client base can be worth a whole lot of money, especially if the transfer is done tastefully and gradually it can be "priceless" for the new vet.

 

[JSpitz]

Out of a hat, I'd say about $500,000 if you're buying an already built place in a reasonable part of the country (not California). That may actually be a bit high really, I guess it depends on what the practice you're buying is valued at.

You can read this site to give you an idea of construction costs and the like.

haha, how much more do you reckon a practice in CA would sell for?

you planning on opening a practice yourself?

 

[JSpitz]

i'm not sure if you're talking about building your own place up from scratch or not, but i read an interesting blurb in a vet magazine (can't remember which) that said an often forgotten cost is the client list. this only applies if you are purchasing a practice from a vet who is retiring but i thought it was interesting to think about. they said a loyal client base can be worth a whole lot of money, especially if the transfer is done tastefully and gradually it can be "priceless" for the new vet.

good point! that's definitely harder to place a solid number and open to negotiations. although i suppose that the practice is appraised by its income already...so you would project how much the client base is bringing in

 

[HopefulAg]

haha, how much more do you reckon a practice in CA would sell for?

A couple million, I would think. On that site I posted there's several California practices and the cost is usually about double what other practices are.

you planning on opening a practice yourself?

Eventually, yes. Will likely be an associate for 5 - 10 years then look into buying, or building one of my own. If all goes well, I'll eventually have a few different practices scattered in the area.

 

[Willowhand]

http://veterinarynews.dvm360.com/dvm/article/articleDetail.jsp?id=501123&pageID=1&sk=&date=

Here's an article that talks about cost of buying a practice, and you can probably find other if you look around the site. I'd also suggest reading the ads in veterinary classified sections (as on the AVMA website) to get an idea of how costs run for various setups and in different parts of the country.

 

[Bill59]

It's extremely variable. Are you buying real estate or leasing? New construction or remodel? 1 doctor or more? Large animal vs. small animal?

You can start a SA house call practice for as little as $10,000. Or you can build a multi-million dollar hospital. For a typical new 1 doctor SA hospital, I would say $500-750K. But it could be a lot more depending on real estate.

 

[Savethewhales]

a friend of mine just bought a small one doctor established practice in a pretty affluent Los Angeles area and her price was in the 400s. Very small practice though

 

[nelonvet]

It's extremely variable. Are you buying real estate or leasing? New construction or remodel? 1 doctor or more? Large animal vs. small animal?

You can start a SA house call practice for as little as $10,000. Or you can build a multi-million dollar hospital. For a typical new 1 doctor SA hospital, I would say $500-750K. But it could be a lot more depending on real estate.

Bill, are those number (the 500-750k) for something like the land + building only, or does that include the extremely expensive equipment you'd need to buy as well (or take loans on for)?

It seems that machines are getting so expensive nowadays, that you're looking at over a million dollars to just have a normal functional clinic (a new one that is) even for a one vet clinic.

 

[sumstorm]

It's extremely variable. Are you buying real estate or leasing? New construction or remodel? 1 doctor or more? Large animal vs. small animal?

You can start a SA house call practice for as little as $10,000. Or you can build a multi-million dollar hospital. For a typical new 1 doctor SA hospital, I would say $500-750K. But it could be a lot more depending on real estate.

I was going to say I know a small 1.5 doctor SA clinic in SC just went for just under a million. That included 1.5-2 acres of prime highway realestate with room to develope, and client lists (previous vet died in a car accident.)

 

[Packen]

I also think that you have to factor in the cost of running the practice too, just not the start-up costs. Otherwise it's like only looking at the down payment on a house and not factoring in the mortgage payments. That means things like insurance, utilities, employee costs (need at least one tech/vet ass to start), if you purchase a pre-existing practice with a good number of employees, that can be a huge monthly expense.

 

[EllieGirl89]

vet ass

😆

 

[Savethewhales]

i think it all depends on what you want in your clinic. The 400k small animal clinic i am talking about in los angeles needs about 100k worth of equipemtn for what she wants to do with it. There isn't much "land" but no place LA has much land. I'm sure the costs are widely variable based on location and equipment.

Also something to take into consideration....how steady is their clientele? A practice with a ton of clients is going to sell for more then one that is struggling. When you buy an already established practice, it's not just the building and equipment you are buying but also the clientele and reputation

 

[racccjlm]

I got an email from VIN a few months ago talking about a vet that had posted her numbers, process, etc. for starting a practice - it was definitely comprehensive - many many documents, excel spreadsheets, etc. So when you get access to VIN (vet students/vets), you can definitely look that up! It definitely gave me a good perspective of how much work goes into building a practice from the ground up! But it can be done 🙂

 

[Bill59]

Bill, are those number (the 500-750k) for something like the land + building only, or does that include the extremely expensive equipment you'd need to buy as well (or take loans on for)?.

It was based on a friend of mine who started a 1-doctor SA practice a couple of years ago and was the cost for the real estate, construction and most of equipment. He leased the digital x-ray machine and a lab machine, so that's extra if you want to buy. You can get an x-ray system for about $50K but you can also spend several $100K on one. I think drug inventory was also financed separately by the distributors.

And that's starting a practice, not buying an existing practice. So you also need cash to keep you going for 6 months to several years before you actually start making any money. He hasn't actually taken a salary yet, and he's in his third year.

 

[HopefulAg]

I got an email from VIN a few months ago talking about a vet that had posted her numbers, process, etc. for starting a practice - it was definitely comprehensive - many many documents, excel spreadsheets, etc. So when you get access to VIN (vet students/vets), you can definitely look that up! It definitely gave me a good perspective of how much work goes into building a practice from the ground up! But it can be done 🙂

Would you happen to have a link? I'm on VIN and missed that.

 

[168135]

The vet I volunteered with built a clinic from scratch two years ago. She graduated in '07 and worked with another vet in the area when she came here. The other vet went to a clinic in a different town, so she built her own and most of her clients kept going to her. She built the clinic from scratch and also bought the land and raised the funds to create the city's first dog park.

I should ask her how much that all cost next time I see her.

All that... and she only graduated in '07!

I should note though that this city isn't very prosperous since the fall of our industries a decade or so ago. For instance, I have an apartment in an old neighborhood in the center of the city that was once considered "Doctor's Row". Most of the houses on my street are 3 levels + basement and ~ 100 years old. These houses start at about ~$100 000. If these houses were in my hometown, they would be $175 000+ depending on location.

 

[racccjlm]

Would you happen to have a link? I'm on VIN and missed that.

Here it is! If you can't access it for some reason I could try and email you the email that I got originally:

http://www.vin.com/Members/CMS/Misc/Default.aspx?id=16634

 

[Minnerbelle]

they said a loyal client base can be worth a whole lot of money, especially if the transfer is done tastefully and gradually it can be "priceless" for the new vet.

yep, that client base can be priceless, but i heard it can also be very difficult if the way you practice is different from the owner before (esp if you want to practice higher quality medicine).

 

[david594]

(esp if you want to practice higher quality medicine).

When you say higher quality medicine, I assume you mean more expensive medicine?

 

[Minnerbelle]

When you say higher quality medicine, I assume you mean more expensive medicine?

To the client I guess that's what it ends up being. I was thinking more of clinics that are used to vaccinating without physical exams, minimal pain control for surgeries, etc... standard of care that some vets are not comfortable with. Not so much going from the every day average Joe client clinic to the whole shebang (doing everything like vet school taught you to do by the books), type of deal.