Choosing to acquire a veterinary practice or create a startup comes down to a few key things:
1. Be clear on your personal goals
Do you want to live in a specific area, but the practices that are for sale there are going for crazy multiples? (More on “multiples” below!) In that case, a startup might be for you.
2. Know who you want to be
An existing practice comes with an existing reputation, team, culture, and clients. If you’ve got a strong vision for what you want to do, you’ll have to be patient and focused while you implement change at an existing hospital. “Get on (board) or get on,” says co-founder Dr. Adam Conroy.
“You’re going to have to be ok with losing people in the process – team members, clients, etc – to get you to the point where you have the clients and culture you want,” 7S co-founder Danielle Lambert notes.
With a startup, you can build the experience you want to deliver from the ground up.
3. Look at the numbers
When you buy an existing practice, multiples are used to determine the price it will sell for in the end. In veterinary medicine, multiples can be quite high – upwards of 10x – for hospitals that are grossing over $1.2m USD.
This means a hospital with $1.5m gross revenue and profitability of $300k could sell for upwards of $3 million.
I ask myself, “How many years is it going to take me to buy off that loan?” says 7S co-founder, Dr. Cody Creelman.
We’ve intercepted our co-founders other thoughts on the subject – including a discussion of whether or not you should buy with the pending recession – on episode 2 of the 7S Society podcast.
Catch us on iTunes, or listen in below: