The Best Investment Veterinarians Can Make Today and Tomorrow

Piggy bank
Jan 31, 2020 at 1:20 pm
Isaiah Douglass, MBA, CFP

Have you seen an ad or social media post talking about how to select the next Amazon or Google before anyone else so you can invest early and make millions? These cheesy and deceiving ads are simply clickbait with the goal of selling you a program or course. But, what if you really could identify an investment that was undervalued and ready for tremendous growth? I’d assume you’d be interested in exploring that opportunity.

The opportunity

If you are a veterinarian and reading this, you have one of these opportunities right in front of you… it’s you! You have a rare and difficult-to-acquire skillset, and also a blue ocean in front of you. The recent VIN article—“Does hot job market mean there’s a veterinarian shortage?”—talked about the labor market for veterinary medicine being strong and looking to grow by 18% over the next 10 years, which is much higher than the average for most professions. Even if you aren’t looking for anything from an ownership perspective, you’ll still have a well-paying, attractive job for years to come.


But wait, there’s more, and it gets better! What if you decided that you wanted to own a business? What would that look like? The average business in the U.S. has a profit margin of about 10% per BizEquity. The veterinary profession can double that, with a range from 18% to 26%, according to “The Veterinary Practice in 2018” by VSG. The reason there is so much consolidation in the industry is business experts across the spectrum see the value of veterinary medicine and the potential for a high return on investment. In another VIN article—“Veterinary practice consolidation demystified”—private equity’s interest in veterinary medicine is discussed: “Private equity firms’ goal is to beat the average long run and quarterly return of the stock market, which is approximately 7% per year. Overall, consolidated veterinary hospitals easily are meeting, and in many cases beating, that target. Returns of 20% or more are not uncommon.”

A Forbes article shared that, “During the last recession, the veterinary practice revenue was flat to 1% down. That’s great compared with most other industries, revenues of which were down by 10% to 50%.”

Mindset shift

I’ve had many conversations about ownership with veterinarians, and, while the desire is mixed, I also believe that they undervalue their skillset and potential. I’ve had some state that there is, “No way I could own,” and others thinking, “Private practice won’t be a thing in the future.”

I’m not sure where this thinking comes from. The numbers above show how financially beneficial being a veterinarian can be. I believe most veterinarians do themselves and their peers a disservice by undervaluing themselves and what they can accomplish. Although outside the scope of this article, I know that financial reward is not why most (if any) entered the profession. Also, there are a lot of day-to-day challenges of being a veterinarian, but you can own and not be a “solopreneur.”

Why am I so passionate about veterinarians living up to their potential? It’s simple: You went to school for a long time, and there is no reason why you should limit yourself by being an employee for your entire career. Also, the simplified example below shows the impact of buying and selling a veterinary practice and how powerful it can be for you and your family’s financial well-being.

The above is based on a lot of assumptions, which I try to outline below. You should consult your professional team to run your calculation with your unique situation, which will include a lot more variables.

  • Each veterinarian started making $82,245 at age 27.
  • The associate for life started saving 10% from day one, and saved 20% of income from age 38 through retirement.
  • The associate for life’s salary was increased by 3% per annum.
  • The investment return for both was calculated at 6.5%.
  • The practice owner had no savings until age 35, and then saved 5% of income until age 45.
  • The practice owner increased savings at age 45 to 15% of income.
  • When the practice owner was age 35, the clinic was earning $500,000 in revenue.
  • The clinic grew at 5% per annum.
  • The income for the practice owner increased at age 45 due to the expectations that the practice loan is paid off in 10 years.
  • Prior to age 45, the practice owner’s income is the same as the associate for life, as the additional income is put toward debt service.
  • The clinic has a 20% profit margin.
  • The clinic is sold at 8x earnings.
  • The practice owner keeps 75% of the proceeds of the sale. Figured 80% of the sale at capital gains rates and 20% at ordinary income rates of 32%.

So, where do we go from here? If you are interested in looking at ownership, I’d encourage you to do it. Ownership could be the best investment you can make. Sharpen your skills by taking CE to expand offerings and don’t settle for the status quo. The commonly held belief that a veterinarian who is in debt cannot become an owner is simply not always true. There are plenty of opportunities to own and borrow at historically low interest rates to grow a highly profitable—and nearly recession-proof business. Your long-term earnings likely will increase, and you will own an asset (your clinic), which will provide a significant windfall at retirement. Being an associate for life will not provide this benefit. Along with strong financial stewardship, owning a veterinary practice may give you the opportunity to retire earlier, and enjoy your career more during your working years.

Interested in learning more about practice ownership and finance? Contact me, or peruse VetPartners’ many resources here.

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Isaiah Douglass, MBA, CFP, is a CERTIFIED FINANCIAL PLANNER and advisor to veterinarians. Isaiah founded ID Financial Planning & Wealth Management in 2018 to pursue a planning approach that is dedicated to identifying ways to grow the net worth of veterinarians while changing the mindset of making money so it's not such a taboo topic. He is the host of The Veterinarians Success Podcast, and shares content at

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