Top Financial and Nonfinancial Mistakes That Hold Veterinary Practices Back (and How to Avoid Them)
Owning and operating a veterinary practice is one of the most rewarding careers out there, but it’s also one of the most stressful. It’s easy to feel stretched thin juggling patient care, client relationships, team management, and business demands.
While all practice owners focus heavily on patient care many are challenged by financial success. A thriving practice must also prioritize quality of life for the owner and the care team. Here are some of the top financial and non-financial mistakes that can hold a veterinary practice back, and how to avoid them.
Financial Mistakes
* Cash Flow Management: You can have a busy practice and still struggle if cash flow isn’t properly managed. A lack of cash planning leads to late payrolls, delayed vendor payments, and sleepless nights. In order to avoid this, build a cash flow forecast and review it monthly, maintain at least 1-2 months of operating expenses in reserve (calculated on what is needed for those 2 months and what expenses would be reduced), work with an advisor to identify and manage seasonal swings.
* Underpricing Services: Historically, many veterinarians undercharged out of fear of losing clients. Many realized that chronic underpricing erodes profitability and creates an unsustainable business model. Remember that your employees will expect annual raises and the cost of living is increasing annually so these factors must be weighed annually. The cost of providing veterinary care has increased dramatically over the past ten years at an average rate of 17%, outstripping the cost of living. To manage this appropriately, the vet practice should benchmark its pricing against similar practices and regularly review and adjust fees based on inflation, cost of goods, and value provided, while avoiding practice fees in excess of surrounding practices.
* Ignoring Key Financial Metrics: Without tracking KPIs like EBITDA margin, labor as a percentage of revenue, or revenue per doctor, it’s impossible to spot problems early. Therefore, the practice should set up a simple monthly financial dashboard or work with an advisor that provides this data. In addition, the practice owner should review financials with their CPA/advisor monthly with quarterly reviews for tax planning and forecasting.
* Internal Financial Management: Trying to manage all accounting, tax planning, and financial strategy alone usually leads to missed opportunities and costly mistakes. While veterinarians watch their clients use Dr. Google to diagnose their pet, they too should not fall into the same trap by attempting to handle all finances internally. The practice owner should recognize their strengths and delegate to other professionals by outsourcing to a veterinary-specific CPA business advisor and focus their energy on clinical leadership and vision-setting.
Nonfinancial Mistakes
* Neglecting Quality of Life: As a profession, veterinarians sacrifice their own well-being for the practice. Long hours, skipped vacations, and constant stress are not sustainable. The practice owner and their associates must create a practice culture where they set boundaries around time, prioritize self-care as an investment in their leadership capacity and delegate and trust their team more.
* Lack of Clear Vision and Goals: Without a compelling vision, the practice tends to drift aimlessly which leads to frustration, disengagement, and missed opportunities. Ideally the practice owner should define what they want their practice and life to look like in 3-5 years and communicate that vision to your team and advisors.
* Poor Team Development and Retention: High turnover and burnout among veterinary teams is a major industry-wide issue. To avoid this, the practice should invest in team development, career pathways (if possible), and recognition, build a positive culture where employees feel valued and supported and use standard operating procedures (SOPs) to help empower employees and increase efficiency – work smarter, not harder.
* Lack of Delegation: Feeling like “everything depends on me” leads to burnout and bottlenecks. That is why you have a team. Work to empower your team to take ownership of operational areas and hire (or promote) strong practice managers to oversee day-to-day functions.
A profitable practice is important, but so is a healthy, balanced life. True success means building a practice that’s financially strong and emotionally sustainable. Focus not just on growing revenue, but on building a business that supports your long-term health, happiness, and passion for veterinary medicine. With the right mindset, strong advisory support, and a commitment to both financial and nonfinancial goals, you can create a veterinary practice that thrives in every sense of the word.
