Starting Up a Practice in Today’s Economic Climate
Starting Up In Today’s Economic Climate
Many of the associate Veterinarians I have been speaking with are all asking the same question, “Should I start up my practice now or wait until the economy rebounds?” My answer usually surprises them when I reply, “Why wait, start-up now!” Here are my top three reasons to not wait if you are considering starting a practice:
1 – The costs for rent and commercial space have declined.
Landlords and real estate owners wanting to rent and sell space in today’s market are more willing to work with potential renters and buyers. I am seeing more and more landlords offering deferred rent during (and sometimes after) build-outs, increased allowances for the costs of tenant improvements, reducing and waiving fees, and a greater willingness to negotiate sales prices and lease payments. Locking into a lease while the market is low for 15 or 20 years may help improve the value of your business as it matures. If you are considering purchasing a commercial building or condo space there are some tremendous values in today’s commercial real estate market.
2 – Simple economics of supply and demand.
As demand decreases for equipment, supplies, and furniture prices generally follow suit. With fewer Veterinarians starting projects and purchasing equipment and supplies we are already seeing equipment companies bringing some creative and cost-saving discounts to the marketplace. I have recently seen programs that have offered software, discounted cabinetry, credits toward future purchases, and many other Veterinarian incentives in an attempt to earn your business.
3 – Time is money.
The experts are saying that this period of economic downturn will be significant. If your intention is to try and “wait it out” you need to be prepared that, if you do, you may enter the market to start your project at a time when many of your colleagues are doing the same. Those who waited for the economy to turn around will all be looking for space, increasing the demand for equipment, and marketing for new patients at the same time. Many of the incentives currently being offered by the veterinary supply companies and manufacturers may no longer be available.
All this being said, when you do decide to venture out and begin a new practice you need to be responsible and perform proper due diligence. With the amount of time and money you will be investing in your professional practice, you need to make sure you have done your research, formulated a substantial business plan and created a team of industry experts to support and assist you through the process. Is now the time to be opening your specialty referral practice? Unless you have a pool of general practices and patients already willing and able to support you in that type of practice, the time may not be right. Incorporating a good mix of fee schedules, procedures, and client pool will assist in building the foundation of a solid veterinary hospital. This diverse patient base will ensure you are seeing patients and generating income during any economy. By building the foundations now, during a time of economic uncertainty, it will ensure that when the economy does rebound you will be ready and waiting with open doors.
Melisa K. Edwards
Veterinary Finance Manager
Bank of America – Practice Solutions subsidiary
melisa.edwards@bankofamerica.com
Melisa Edwards manages the western territory of Bank of America’s Veterinary Finance Division. She oversees all veterinary related projects and loan programs in the Western United States region for Practice Solutions, Bank of America’s Healthcare financing subsidiary. Bank of America and Banc of America Practice Solutions™ are registered trademarks of Bank of America Corporation.