Whether you’re looking to raise funding from private investors or to get a loan from a bank (like a SBA loan) to start your veterinary clinic, you will first need to prepare a solid business plan.
In this article we go through, step-by-step, all the different sections you need in the business plan of your veterinary clinic. Use this template to create a complete, clear and solid business plan that get you funded.
1. Veterinary Clinic Executive Summary
The executive summary of a business plan gives a sneak peek of the information about your business plan to lenders and/or investors.
Though the executive summary is the first and the most important section, it should normally be the last section you write because it will have the summary of different sections included in the entire plan.
Why do you need a business plan for a veterinary clinic?
The purpose of a business plan is to secure funding through one of the following channels:
- Obtain bank financing or secure a loan from other lenders (such as a SBA loan)
- Obtain private investments from investment funds, angel investors, etc.
- Obtain a public or a private grant
How to write your veterinary clinic’s executive summary?
Provide a precise and high-level summary of every section that you have included in the business plan of your veterinary clinic. The information and the data you include in this segment should grab the attention of potential investors and lenders immediately.
Also make sure that the executive summary doesn’t exceed 2 pages in total: it’s supposed to be a summary for investors and lenders who don’t have time to scroll through 40-50 pages, so keep it short and brief.
The executive summary usually consists of 5 major sub-sections:
- Business overview: start by introducing your veterinary clinic, where it is located, how big it is (space and number of veterinary doctors). Also mention the services and treatments you offer (for example if you specialise in livestock e.g. cattle, horses, etc.) and their average prices
- Market analysis: summarise the market where you will operate and provide a brief about your target audience (what type of animals – pets vs. livestock vs. exotic animals – and their owners – age, demographics), market size, competitors, etc.
- People: hiring goes beyond the medical staff for a veterinary clinic. Indeed, if you open a private practice, you may also need a receptionist, a cleaner, and other support staff members. And if you are partnering with other doctors to form a joint partnership, mention every partner’s role in the setup as well as their experience
- Financial plan: how much profit and revenue do you expect in the next 5 years? When will you reach the break-even point and start making profits? You can include here a chart with your key financials (revenue, gross profit, net profit)
- Funding ask: what loan/investment/grant are you seeking? How much do you need? How long will this last?
2. Veterinary Clinic Business Overview
In the business overview section of your business plan, you should explain in detail what clinic you plan to open. A few questions you will need to answer here are:
- Why are you starting a veterinary clinic today?
- Where exactly is your veterinary clinic located? Why did you choose that location?
- What type of veterinary clinic are you opening (franchise vs. independent)?
- Which veterinary services will you provide? For whom / what?
- What will be your operating hours / days?
- What is the capacity of your veterinary clinic (how many doctors will be working in your clinic)?
- What will be the legal structure of your company (partnership, corporation)?
a) History of the Project
Any business overview must start with explaining the history of the project. There are 2 components here:
- Passion & experience of the business owner
- Rationale behind starting a veterinary clinic today
Passion & experience
You may or may not have prior experience working in the veterinary industry. So, make it clear in this section to help clients understand what to expect from your clinic. Of course, prior experience gives you an edge over your competitors, showing the clients why they should choose your practice over the rest.
Most often, veterinary doctors working in clinics eventually decide to start their own clinic. Yet it isn’t always the case: if you have entrepreneurial experience and a background in the industry (but you’re not necessarily a licensed doctor), you may want to start a veterinary clinic. If the latter though, you will likely start either a franchise or a large clinic (as you may struggle to cover you own salary with a small independent clinic).
With passion and experience comes more responsibility. And after proving that you have what it takes to run a successful facility, the next step is to explain why you think opening a veterinary clinic in that region is the right decision.
For instance, if there may be a shortage of veterinarians to treat livestock like cattle and horses. With the right specialisation and knowledge, you could fill that gap.
b) Business Model
Now, you must explain which business model you selected for your veterinary clinic. First, you must choose between independent practice and purchasing an established franchise.
Yet, that’s not all, you should choose the type of clinic you want to run, and for that you must answer the following questions:
- Will you target a specific category of animals or treat all groups (for instance, livestock vs. exotic animals vs. pets)?
- Will you provide special services (e.g. surgery, re-education, physical therapy) or simply routine care treatments and checkups?
- Will you provide mobile services or work within your premises (home visits vs. clinic)?
What are the different types of veterinary clinics?
Here are a few business models commonly adopted by many veterinarians:
- Companion Animal Clinics: veterinarians treat and look after small animals like pocket pets, cats, and dogs. This is the most popular type of veterinary practice managed by general practitioners. Veterinarians in this setup are qualified to handle basic procedures like surgery, diagnosis, and treatments
- Exotic Animal Clinics: such veterinarians specialize in caring for exotic animals like birds, amphibians, reptiles, and pocket pets
- Livestock and Large Animal Clinics: these professionals care for livestock and large animals like cattle, sheep, goats, pigs, and horses
- Laboratory Veterinarians: these are lesser-known veterinarians specializing in different fields such as pathology, infectious disease management, and pharmacology research, among the rest
- Veterinary Specialists: veterinary specialists specialize in popular fields like dentistry, cardiology, and anesthesiology
c) Products & Services
It’s important to tailor your veterinary services according to the market needs. That means everything depends on the location and the type of veterinary clinic. There’s no doubt that the nature and type of veterinary services will also influence your sales and profitability.
Generally, veterinary services fall into four categories: clinical services, preventive, drugs and vaccines, and human health protection.
For example, a full-service veterinary clinic will probably specialize in one or more of the following services;
- Spraying and neutering
- Examinations and diagnosis (coat, skin, teeth, temperature, etc.)
- Emergency care
- Medicinal treatments
- Weight management
- Veterinary surgery
- Dental treatments
- Laboratory services
- End-of-life services
What about products?
It may be a great idea to add merchandising to your veterinary clinic revenue streams. For example, you can showcase in your clinic (or even better, online) curated partners’ products for pets and animals.
Whilst it can easily take some of your time to sell these products (negotiation with vendors and sales to your customers), it can add a significant chunk of revenue and maximise your profits.
d) Pricing Strategy
Lenders and investors need a clear picture of your pricing structure. And that’s exactly what you should mention here. Get the average cost of veterinary services in the area you want to operate and use it as an inspiration when making your pricing list.
Going with fixed rates isn’t always the best decision. Instead, give price ranges depending on your research and proper analysis of the veterinary industry in the region.
When preparing your pricing list, make sure to take into considerations regulation (threshold, maximums if any) as well as whether the treatments and services are usually reimbursed by the most common insurance policies, and to what extent.
e) Legal Structure
Finally, your business overview section should specify what type of business structure you want. Is this a corporation or a partnership (LLC)? Who are the investors? How much equity percentage do they own? Is there a Board of Directors? If so, whom? Do they have experience in the industry?
3. Veterinary Clinic Market Overview
You must understand the market you wish to operate. For instance, specialising in farm animal care may not be your priority in an affluent area where most individuals own domestic pets.
To help you make the right decision when assessing the market, your analysis should focus on the following:
- Veterinary industry status quo: how big is the veterinary industry in your region? What is the growth rate? And what are the factors influencing its growth or decline in the region?
- Competition overview: how many veterinary clinics are in the region? How do they compare to your setup? How can you differentiate yourself from them?
- Customer analysis: who exactly is your target audience (your customers and their pets / animals)? What type of veterinary services do they need? How often do they need veterinary services? How much are they willing to spend on veterinary treatments on average? Do they have any insurance policies for their pets / animals?
a) Veterinary Industry Status Quo
How big is the veterinary industry in the US?
The veterinary industry in the US is estimated to be worth about $11 billion in 2022. This is attributed to the increasing number of pets in recent years and the subsequent demand for veterinary services.
How many veterinary clinics are there in the US?
In a 2017 report, the American Veterinary Medical Association (AVMA) estimated there were about 28,000 to 30,000 veterinary practices in the US, catering primarily to companion animals (cats and dogs).
Most of these practices are owned by veterinary doctors themselves, of partnerships of doctors. Indeed, only 10-12% of these clinics were owner by corporations instead.
Although there is no recent figure publicly available online, it’s safe to assume the number of veterinary clinics has increased in line with the total market growth rate of 4.8% per year during the same period (2017-22).
This means there are around 35,000 to 40,000 veterinary clinics in the US in 2022.
In terms of revenue, veterinary clinics generate each an average turnover of $275,000 to $325,000.
How big is the veterinary industry in your area?
After getting a clear picture of the dental industry in the US as a whole, narrow down to your location. It’s very likely that you won’t find the number anywhere (at least not for free).
In that case, you can use our guide to estimate the TAM, SAM, and SOM for your business. Here is an example of how to do it:
For example, we know that each veterinary clinic gross on average $275,000 to $325,000 in sales per year.
So, if there are 20 veterinary clinics in the area you plan to open yours, you can safely assume that the veterinary industry in your area is valued at around $5,500,000 to $6,500,000.
How fast is the veterinary industry growing in your city?
Looking at publicly available reports online, we know that the average annual growth of the industry was 4.8% from 2017 to 2022 and is expected to accelerate to 8.7% per year from 2022 to 2030.
What about where you live? US national averages can be a great addition to your business plan, yet they don’t necessarily help to assess the veterinary industry where you plan to operate. For example, the industry might be growing in the US, but declining in your region for a number of reasons (decreasing population or disposable income, etc.).
As you likely won’t find this information online, you can instead rely on the number of clinics to calculate the average growth rate of the industry in your area.
For example, if the region had only 15 veterinary clinics in 2016, which increased to 20 in 2022, you can assume that the average annual growth rate of the veterinary industry in the region is around 5%, in line with the US average.
b) Competition Overview
Take some time to assess the level of competition in the area you want to open your clinic. While doing so, evaluate the strengths and weaknesses of your biggest competitors, their marketing strategies, and services.
This will help you assess the challenges you will face to compete with them as a new business, but also to form effective marketing strategies to attract new customers.
It’s always a good idea to do some research and create a comparative table summarizing your competitors’ services, marketing strategies, target audience, etc.
Here is a sample table that you can use:
|Competitor #1||Competitor #2||Competitor #3|
|Business model||Independent clinic||Independent clinic||Franchise|
|Target audience||Companions||Companions, livestock||Companions|
|Extra services||Physical therapy||–||–|
|Number of doctors||2||3||3|
|Marketing strategy||Social media content & ads|
Print media (newspapers, catalogues)
Print media (newspapers, catalogues)
|Social media content & ads|
c) Customer Analysis
Use this section to describe your target customers: the animals (pets, livestock, etc.) and their owners (age, demographics, disposable income, etc.).
In order to carefully assess your target market where you plan to operate, you can consult pet owners in the region to get the following details:
- Their average expenses on veterinary services
- Frequency of seeking veterinary services
- Average spending on veterinary services (per year)
- The most popular veterinary service
- Their opinion on the existing veterinary clinics (what they like and dislike about the existing clinics)
4. Sales & Marketing
This section of the veterinary clinic business plan summarizes your strategy for acquiring and retaining new clients.
To treat someone’s pet, you must first win their trust, especially if you’re a new business trying to attract customers from existing clinics.
So, here are a few questions to help you stand out when shaping your marketing strategy:
- What are the different marketing strategies you will use?
- How do you intend to track the success of your marketing strategy?
- What is your customer acquisition cost (CAC)?
- What is your marketing budget?
- What are your Unique Selling Points (USPs)?
- What introductory promos and offers do you intend to provide for attracting new customers?
What marketing channels do veterinary clinics typically use?
A few marketing channels used by veterinary clinics include;
- Signage (especially if you’re close to a busy street)
- Word-of-mouth, recommendations
- Online local listing (Google Business)
- PPC ads, Facebook ads, etc.
- Email, SMS marketing (to remind existing customers of regular checkups for example)
- Content marketing on social media and blogs
What are your Unique Selling Points (USPs)?
In other words, how do you differentiate yourself vs. competitors? This is very important as you might need to win customers from competitors in the early days.
A few examples of USPs for veterinary clinics are:
- Specialization: you may be the best veterinary out there specialising on companion animals’ muscle re-education, rehabilitation and physical therapy
- Location: your clinic may be located closer to your target audience and/or closer to a busy street where new potential customers can see your signage
- Price: your services may be cheaper vs. competitors
- Referrals and partnerships: you could partner with well-known veterinary brands (and resell their products) that would refer you to their customers via email or SMS marketing
- Offers and promos: you may offer discount rates on subsequent visits
5. Management & People
You must address 2 things here:
- The management team and their experience/track record
- The organizational structure: different team members and who reports to whom?
Small businesses often fail because of managerial weaknesses. Thus, having a strong management team is vital. Highlight the experience and education of the other veterinary doctors that you intend to hire to oversee your veterinary clinic.
For the veterinary doctors and general partners, describe their duties, responsibilities, and roles. Also, highlight their previous experience and track record.
For the receptionists, personal assistants, office managers, veterinary assistants, etc. no need to go into a lot of detail, especially as it’s likely you won’t have hired them yet before you get the funding you need, which is the objective of this business plan.
b) Organization Structure
Even if you haven’t already hired anyone yet, you must provide a chart of the organizational structure defining the hierarchy of reporting.
6. Veterinary Clinic Financial Plan
The financial plan is perhaps, with the executive summary, the most important section of any business plan for a veterinary clinic.
Indeed, a solid financial plan tells lenders that your business is viable and can repay the loan you need from them. If you’re looking to raise equity from private investors, a solid financial plan will prove them your veterinary clinic is an attractive investment.
There should be 2 sections to your financial plan section:
- The startup costs of your veterinary clinic
- The 5-year financial projections
a) Startup Costs
Before we expand on 5-year financial projections in the following section, it’s always best practice to start with listing the startup costs of your project. For a veterinary clinic, startup costs are all the expenses you incur before you open your veterinary clinic.
These expenses typically are: the lease for the space, the renovation costs, the equipment and furniture.
Logically, the startup costs vary depending on the size of your clinic, the treatments you will offer (and therefore the equipment you need), the quality of the equipment and furniture, whether you buy the real estate or rent a commercial space, etc.
On average, it costs $467,500 to $839,500 to start a veterinary clinic with 2 veterinary doctors in the US.
Note that these costs are for illustrative purposes and may not be fully relevant for your business.
|Building from scratch or refurbishing existing space||$120,000||$480,000|
|Equipment||$50,000 – $70,000||$50,000 – $70,000|
|Total||$170,000 – $190,000||$530,000 – $550,000|
b) Financial Projections
In addition to startup costs, you will now need to build a solid 5-year financial model for your veterinary clinic.
Your financial projections should be built using a spreadsheet (e.g. Excel or Google Sheets) and presented in the form of tables and charts in the business plan of your veterinary clinic.
As usual, keep it concise here and save details (for example detailed financial statements, financial metrics, key assumptions used for the projections) for the appendix instead.
Your financial projections should answer at least the following questions:
- How much revenue do you expect to generate over the next 5 years?
- When do you expect to break even?
- How much cash will you burn until you get there (cash burn)?
- What’s the impact of a change in pricing (say 15%) on your margins?
- What is your average customer acquisition cost?
You should include here your 3 financial statements (income statement, balance sheet and cash flow statement). This means you must forecast:
- The number of pets / animals you can treat in a day or in a week;
- Your expected revenue ;
- Operating costs to run the business ;
- Any other cash flow items (e.g. capex, debt repayment, etc.).
When projecting your revenue, make sure to sensitize pricing (prices of treatments and services) and your sales volume (number of customers). Indeed, a small change in these assumptions may have a significant impact on your revenues and profits.
7. Use of Funds
This is the last section of the business plan of your veterinary clinic. Now that we have explained what your veterinary clinic’s business model and services are, your marketing strategy, etc., this section must now answer the following questions:
- How much funding do you need?
- What financial instrument(s) do you need: is this equity or debt, or even a free-money public grant?
- How long will this funding last?
- Where else does the money come from? If you apply for a SBA loan for example, where does the other part of the investment come from (your own capital, private investors?)
Use of Funds
Any veterinary clinic business plan should include a clear use of funds section. This is where you explain how the money will be spent.
Will you spend most of the loan / investment in paying your employees’ salaries? Or will it cover mostly the cost for the lease deposit for the space, the renovation and equipment?
Those are very important questions you should be able to answer in the blink of an eye. Don’t worry, this should come straight from your financial projections. If you’ve built solid projections like in our veterinary clinic financial model template, you won’t have any issues answering these questions.
For the use of funds, we also recommend using a pie chart like the one we have in our financial model template where we outline the main expenses categories as shown below.