Product category

How To Build a Financial Model For a Veterinary Clinic

Every business needs a financial model. Whether you want to understand what’s your breakeven, your valuation or create a budget for your veterinary clinic business plan, you’ve come the right way.

In this article we’ll explain you how to create powerful and accurate financial projections for a veterinary clinic.

1. Forecast Patients (Pets)

The first thing you’ll need to do is to forecast the number of patients (pets) you can expect to receive in your veterinary clinic. Naturally, do this month over month. The number of pets is the sum of 2 types of patients:

Patients = New Patients + Repeat Patients

New Patients

These are the new patients who come for the first time. Unless you take over an existing veterinary clinic, the number of new patients will likely be low in the early months and increase progressively.

Repeat Patients

To go a step further, you should forecast repeat patients: the customers who will come back with their pets at least twice in the future.

Repeat patients are very important as they don’t cost you a dime to attract (they come back because of the great care you gave their pet(s) the first time, and not because of some ad you had to pay for). Also, repeat patients are more engaged and therefore likely to spend more (in regular checkups for example).

To forecast repeat patients, you should use a cohort model with a few assumptions:

  • What % of your new patients who will become repeat
  • How often the repeat patients come back (e.g. 2x a year for example)
  • The annual churn (you can’t reasonably assume repeat patients will come back forever)

In the end, you should obtain something like the chart below. As you can see, whilst the number of new patients come to a plateau (you are capped by a certain number of total patients and you can’t welcome all the new patients out there as you already take care of an increasing number of repeat patients). Instead, the portion of repeat patients increase progressively over time.

Source: Veterinary clinic financial model template

2. Forecast revenue

Now that we have estimated the number of pets (patients) you can care for over time, we can calculate revenue.

Yet, before we do so, we must break down the number of patients into the different procedures a veterinary clinic may offer. Indeed, you might focus more on routine exams and vaccines, or instead focus on surgery and hospitalization.

It’s very important to break it down right. Indeed, as you know all these procedures have very different unit economics (prices and profit margins) you need to forecast accurately. Let’s see now how.

First, break down the services into a percentage of the total patients. For example:

  • 80% of the pets may go through a routine checkup at $175 on average;
  • 15% also come for a spray/neuter at $200;
  • 20% of pets also need a vaccine at $60;
  • 5% of pets require wound treatment for $1,550 on average;
  • 2% of pets may need hospitalisation for $2,000 on average; etc.

That way, you can now multiply the number of pets for each procedure by their respective price.

Now you can obtain your revenue projections broken down by the type of procedure as shown below:

Source: Veterinary clinic financial model template

3. Forecast expenses

In addition to the startup costs, you must also budget for all the operating costs of running a veterinary clinic.

On average, whilst it costs $467,000 to $840,000 to start a vet clinic (startup costs), you will also incur around $27,800 to $44,400 in operating costs per month on average to run the clinic.

We have laid out below the key expenses you can expect as well as their amount. Please note that these costs are for illustrative purposes, correspond to a hypothetical veterinary clinic with 2 veterinary doctors, and depend on a number of factors which may not fully be relevant to you.

Operating costAmount (per month)
Salaries$20,000 – $25,000
Rent $5,000 – $10,000
Marketing$1,200 – $2,400
Insurance$100 – $400
Bookkeeping $500 – $1,000
Miscellaneous$1,000 – $2,000
Total$27,800 – $44,400

Veterinary Clinic Financial Model

Download an expert-built 5-year Excel financial model for your business plan

Veterinary Clinic Financial Model

Download an expert-built 5-year Excel financial model for your business plan


You may need to hire:

  • A veterinary doctor (median salary of $100,000)
  • A veterinary receptionist. The average hourly wage you will need to pay is $13.53
  • A veterinary assistant. The average hourly wage you will need to pay is $13.62

Assuming you have a clinic with 2 veterinary doctors, 1 receptionist and 2 assistants, the monthly salary expense will range anywhere from $20,000 to $25,000 per month.


If you are renting a space to start your veterinary clinic instead of new construction, you will need to pay a recurring rent. The rent you pay will depend on the size of the space, the location, and other factors.

For example, if you decide to rent a 3,000-square-foot commercial space at a rate of $35 per square foot per year, you will end up paying $8,750 per month in rent.

Marketing & advertisements

Because of high competition, you cannot expect customers to start pouring in after you open your veterinary clinic. You need to spend money on marketing and advertisements to attract new customers. According to imatrix, if you are opting for a PPC advertisement with Google, you can expect to have a CPC of anywhere between $2.73 and $3.59. If you opt for Facebook ads, you can expect to pay $0.97 per click and $7.19 for every 1,000 impressions.

The overall advertisement expenses will depend on your ad frequency, the number of clicks, and the number of impressions. It is a good practice to set a specific monthly budget for each advertisement platform. The good part is that the ads will stop running when the set budgetary limit is hit.

According to AAHA, on average, you can typically set aside around 1.2% of your gross revenue for advertisements. Logically, in the first months you’ll likely spend more as you try to get new customers and cannot (yet) entirely rely on organic (word-of-mouth) customers.

Assuming an average procedure price of $250 per customer, and 8 customer per day (2 veterinary doctors) in the first months, you can expect approximately $40,000 in monthly revenue. You’ll likely spend anywhere from 3-6% of your revenue in marketing the first months, hence $1,500 to $2,400.

Veterinary practice software

There are two ways to go. You can make a one-time purchase and install a software program on your computer. Alternatively, you can use a SaaS platform such as DaySmart Vet for which you will need to pay a monthly subscription fee. Typically SaaS applications have become more popular because you don’t need to worry about installation, updates, maintenance, etc.


Insurance is necessary. You can opt for Business Owner’s Policy for your veterinary clinic. This type of policy covers general liability, commercial property damage, business interruption, etc. The premium can range anywhere from $500 to $4,900 depending on your chosen coverage.


You will want to maintain your finances for the smooth running of your business. Accountants will likely cost anywhere from $500 to $1,000 per month in fees.

Additionally, you can also opt for accounting software such as Quickbooks which will cost anywhere between $12.50 and $90 a month depending on your chosen plan.

Miscellaneous expenses

You can expect other miscellaneous expenses which can be up to $1,000. These expenses usually cover office supplies, utility bills, etc. This can actually change depending on your facility size, the number of staff members, electricity and water consumption, and other factors.

Source: Veterinary clinic financial model template

4. Build P&L and Cash flow

Once we have forecasted revenues and expenses, we can easily build the profit-and-loss (P&L) from revenues down to net profit. This will help you to visualise key profit metrics such as Gross Profit or EBITDA margin as shown below:

The cash flow statement, in comparison, needs to include all cash items from the P&L and other cash movements such as capital investments (also referred as “Capex”), fundraising, debt, etc.

Forecasting cash flow is vital as it will help you understand how much funding you should get, either from investors or the bank (SBA loan for example) to start and run your own veterinary clinic.

In this chart below, we’re showing you an example of a typical cost structure a veterinary clinic business would incur. Unsurprisingly, salaries, rent and operations (janitorial services, supplies, etc.) represent ~75% of total expenses.

Source: Veterinary clinic financial model template

Veterinary Clinic Financial Model

Download an expert-built 5-year Excel financial model for your business plan

Veterinary Clinic Financial Model

Download an expert-built 5-year Excel financial model for your business plan