Where to Own a Practice?
The question we often get from potential practice buyers is “Where is a good spot to own a practice?” There are a lot of factors that contribute to answering that question. But first, let’s discuss the reasons why you want to own a practice.
If you are in it because you love being a veterinarian and love helping patients and you are not necessarily in it to make the big bucks, you can really own a practice almost anywhere. A lot of buyers seem to want the downtown metropolitan practice thinking it’s a great place to practice since there are so many potential clients and you can live the urban lifestyle. I’ve helped doctors who absolutely wanted to be in a metropolitan area, even though the demographics made no sense whatsoever, who then started a practice and did quite well. One doctor that I helped always dreamed of owning a practice in a particular city. He went for it and is successful. And I have seen others want a practice in a certain area, and although the numbers didn’t make sense, they did it anyway and were successful.
Some of you are buying a practice because you want to make a lot of money, in which case, further analysis and discussion is needed. If you’re buying an existing practice and you have identified that the practice already has good cash flow, you can purchase the practice and have success almost no matter where it is. If it’s a poor performing practice, you would need to examine if the poor performance is because of the location, the management, or something else. If you want to buy an existing practice and are looking for an opportunity to grow and have lower overhead, I would suggest looking outside of the metropolitan areas. Practices outside of metropolitan areas have less competition, wages and rents are lower, and it’s easier to grow those practices. And if you are considering doing a startup practice, the same rules apply. Look for a location with good demographics outside of metropolitan areas. Of course, if you absolutely want to be in a metropolitan area, don’t be afraid to go for it. Just look closely at the numbers and hire a good veterinary practice or real estate broker to help you out.
I do recommend that you do a bit of demographic analysis on the locale. See how many veterinarians are currently practicing in the area. A good ratio is 2,000 daytime population for each doctor. There is a difference between the daytime population and the regular population. The daytime population includes the workforce. For example, if you look at the population of South Lake Union during the day vs. the nighttime population, you would see a big difference. Another demographic to pay attention to is the age of the population. For a general practice, a good mix of young and old is best. Homeownership is another good indicator of practice success. You want to have more homeowners than apartment renters. You can obtain detailed demographics either through a company that will charge a fee and provides data such as the average annual dollar amount spent on veterinary services per person within a zip code and other more granular items. Or, Omni has information that we can provide.
One of the advantages of working with Omni is that we have both veterinary practice brokers and real estate brokers to help you traverse the ownership trail in any way we can. Just give us a call at 877-866-6053 or email us at firstname.lastname@example.org and we’ll be happy to help get you started.