Starting vs. Buying a Veterinary Practice: What Veterinarians Need to Know Before Becoming Owners

Angie: Welcome to today's episode, where we're diving into an important question for many veterinarians: Should you build a practice from the ground up or buy an existing one?

Practice ownership is a major milestone, but the path to getting there is not always simple. From startup costs and financing to operations, staffing, systems, and long-term profitability, there are many decisions that can shape the future of a veterinary business.

Today, we're joined by Mira Johnson, CPA, CVPM, MBA, Integrator at CPAs for Veterinarians, JF Bell Group. Mira is a finance and operations leader who helps veterinarians start, manage, and grow the practice of their dreams.

With deep experience in accounting, budgeting, auditing, leadership, and veterinary practice management, she brings a practical and financial perspective to one of the biggest decisions veterinarians face.

In this conversation, we will explore the pros and cons of starting a de novo veterinary practice versus buying an existing one, what veterinarians should consider before taking the leap, and how strong financial systems and real-time data can help new practice owners make smarter decisions.

Mira, thank you so much for joining us today. We're really excited to have you here.

Mira Johnson: Thanks, Angie. I'm glad to be here.

Angie: Let's start with one of the biggest decisions aspiring practice owners face as they begin exploring the path to ownership.

For veterinarians dreaming of practice ownership, how should they decide whether to start a de novo practice or buy an existing one?

Mira Johnson: That's a great question, and I wish there were an easy answer for that, but it really depends on individual needs, their personal goals, of course, their financial resources, and also where they are in their life and what their visions are.

If we're envisioning something that's not out there, it will be really hard to buy it. But if we're envisioning something that's already out there and we can just purchase it and then head on with the cash flow that's already there, that might be much easier.

So it really comes down to their risk tolerance, their financial resources, and their personal visions.

Angie: What are the biggest advantages and risks of starting a veterinary practice from the ground up?

Mira Johnson: From the pros, there are so many.

When you start from scratch, you have a blank canvas, and it's so exciting because you get to design your own practice. There's the workflow that you always dreamed about, the number of exam rooms that you always wanted to have, the practice management software that you're comfortable with, and you get to hire your own staff.

So there are a lot of pros to that.

As far as the cons, there are a few, and that's probably why many people will go with buying an existing practice.

One of the major drawbacks is that there are no clients. On day one, you might not have anybody on your books, and that can be tough.

You can feel a little low during the first week when there are just a few appointments and the cash is not trickling in as fast as you would want it to.

The path to profitability—we see anywhere from six to 12 months until the practice gets profitable—so it's a long journey.

What that causes is that you have to be patient. Oftentimes, the owner's compensation is delayed, so there has to be some cash to fall back on and also working capital to make sure you can carry the costs during those unprofitable months.

You need to be able to cover at least your labor costs and your cost of goods sold.

That's something anybody who is starting from scratch should definitely consider.

Angie: That's really interesting. When buying an existing practice, what financial and operational red flags should veterinarians look for before committing?

Mira Johnson: That's a good question because one of the cons of buying an existing practice is that you're going to pay much more for it than for a startup.

You're buying goodwill. You're buying a set of clients, proven processes, and an established location, so that costs extra money. That is definitely going to add to the loan that you will have to be paying compared to a de novo practice.

It may be a higher loan, but you also have established cash flow.

As far as red flags, I always recommend that there should be a valuation done.

It is always between the seller and the buyer to agree on the purchase price, but if there's not a starting point, it's kind of hard. That starting point would be the valuation.

There are so many different valuators in the market, but I always recommend a veterinary-specific valuator because practices are valued differently.

And then, of course, with the corporate market out there, the investment value at which a corporation would buy a practice can be very different from an associate buying in.

Watch out for that because that is completely different math. You want to make sure that you're not overpaying and that you understand everything you're paying for.

I always talk about due diligence and hiring a professional to make sure that you understand what the financials look like.

Also, walk into the practice and ask yourself, "Is this the right practice for me? Does it fit what I'm looking for?"

There are a lot of practices that are great practices, but they're just not a good fit for some veterinarians or future practice owners.

If you walk into the practice and see that people are doing 10- or 15-minute appointments and it's a low-cost vaccination clinic, but you imagine a high-tech, high-touch, different type of practice, it might be really, really hard to make that change.

You might lose a lot of clients in the meantime, along with cash flow and essentially the goodwill that you paid for.

So I highly recommend watching for those red flags.

Angie: Could you elaborate on the red flags that you mentioned so that listeners have a better understanding?

Mira Johnson: Some of the red flags are that the culture doesn't match what you want or what you're looking for.

The other thing is the real estate. Maybe it's not in a location where you imagine you're going to be because you're going to be pulling from the people that you already know, perhaps.

Or it might be inside your non-compete if you're in a state that still has a non-compete. Make sure that you look into that.

From the real estate perspective, another red flag would be to ensure that the lease is transferable. Sometimes you come to the deal, and at the end, you can't transfer the lease because the landlord is giving you a hard time for whatever reason.

Are there clients and demographics that you envision?

If you're in a demographic area that doesn't match what you're trying to achieve, that's going to be really hard because people will have to drive farther. We all know we're all about convenience, so who wants to drive that far anyway?

So culture, demographics, location, and then, of course, the financials.

Make sure there's nothing that would make you wonder, "Does this really cash flow? Can I pay the loan? And is this what I want?"

Angie: That's really interesting. I think that's something that a lot of practice owners, and veterinarians who are looking to buy a business, would want to keep in mind.

Angie: Mira, that's such an important point.

Whether someone is starting from scratch or buying an existing veterinary practice, one thing becomes very clear quickly: Ownership is not just about getting the doors open. It's about creating a practice that can grow sustainably.

Part of that growth comes from having the right financial guidance, but another part comes from making sure the right clients in your community can actually find you.

For veterinarians who are thinking about ownership, or for current practice owners who want to better understand where their growth opportunities are, the Veterinary Business Institute offers a complimentary Marketing Strategy Meeting.

During this session, Lila Stone and the team at Ekwa Marketing review your practice's online presence and prepare a customized marketing plan for your veterinary practice.

They look at opportunities to improve your local visibility, attract high-quality new patients, strengthen your Google presence, and create a more consistent flow of new patient calls.

This is especially valuable for someone who is preparing to start or buy a practice because marketing should not be an afterthought. It should be part of the business plan from the beginning.

If you want a clearer picture of how your practice is showing up online and what can be improved, you can book a complimentary Marketing Strategy Meeting through:

Once again:

Angie: We've talked about the key considerations involved in both starting and buying a practice. For someone listening today, the next question is often how to turn that dream into a concrete plan.

Mira, for someone who is listening and thinking, "This sounds exciting, but I don't know where to begin," what are the most important first steps they should take when preparing to start or buy a veterinary practice?

Mira Johnson: That's a good question, Angie.

We always ask each veterinarian, or each future practice owner—because we know that it doesn't have to be a veterinarian now to start a practice—one really important question, and that is: Why?

Why do you want to be a practice owner? Why do you want to own a practice?

Because owning a practice is not just being your own boss. It's a lot of responsibilities and a lot of decisions that person will have to make.

I do believe that not everybody is practice-ownership material, simply because a lot of people enjoy practicing medicine or they're much better in their role.

We hear a lot when people say, "Well, I want to change because I don't like the practice manager in my practice," or, "I hate the software," or, "I don't like the turnover."

Mira Johnson: We had an associate who was really frustrated because she was working in a very busy practice. She had 15-minute appointments, the staff turnover was high, and she was thinking, "You know what? I can just do this on my own. I can do better."

And she did.

She was very determined, and eight months later, she leased a place, started a de novo practice, and was in her new facility. It was like a dream come true.

She was able to have 30-minute appointments. She picked her own staff, and it was all that great stuff that de novo offers.

But she wasn't a very good businesswoman, and she didn't really pay attention to her cash flow and all the other things that practice owners need to work on—not just in their business, but on their business.

Pretty soon, she was running out of money.

Two years later, she got into a crunch and realized that she needed to see more appointments to get the money in the door.

So she shortened her appointment times and was doing 15-minute appointments.

Her staff didn't like it, so what happened? Of course, they quit and found different jobs, and she experienced high turnover.

She was back to 15-minute appointments with high turnover once again, but this time it was really hard because she couldn't just walk away. It was her practice. She was a practice owner.

I think there are reasons when practice ownership is perhaps not the right path.

If you're just frustrated with your boss or you think you're working in a toxic environment, there are so many great independent practices out there that have a great culture. They use the software that you love, and they have a great team.

We always recommend trying some relief work.

It's a great path toward learning what you like and what you don't like. Maybe you'll find a great place for you to work.

Maybe you realize, "No, this really is the right path. I need to create something special."

Or maybe you'll find a practice and think, "This practice is great. I just want to buy it." And it might be for sale.

Angie: Once again, I'd like to stay on topic for a little bit more.

When someone wants to buy or start a practice, they're thinking, "Where do I start? Where do I begin?"

What are the first steps they should take when preparing to start or buy a veterinary practice?

Mira Johnson: After you answer your why and you know for sure that you want to be a practice owner, I think the important part is to assess the financial situation.

Can you get a loan? Are you financeable?

I think a lot of future practice owners, or the ones who want to own a practice, are waiting because they think they can't afford it due to large student loans.

There are good debts and bad debts.

For example, credit card debt is bad debt, so you don't want to have that. But student loans and a mortgage are good debt because they're backed by education and they're backed by the house.

Those are things that a lot of people don't know about.

In today's market, there are a lot of veterinarian-specific lenders that will lend to startups.

If you're a veterinarian who's producing and has been in the workforce, the financial lending arms may lend you money based on your production and whether you have good financial habits already in place.

That's the first step: See if you're financeable and if somebody will lend you the money.

Now, you might have your own stash, so you might not need a lender. Then it's really about starting to look for a location.

Mira Johnson: If you're trying to buy an existing practice, you can reach out to a broker or look at their listings to see what's out there.

If there isn't anything out there, you never know. People might be thinking about selling.

You can start talking to people in the area and introduce yourself. Go to the practice, buy the owner a coffee, and see where they are in their journey.

They might be thinking about selling; they just haven't made that first step.

Angie: So the first steps are really the financial side and the location?

Mira Johnson: Correct.

Angie: Once those first steps are in motion, how can better financial systems, real-time data, and strong advisory support help new practice owners succeed long term?

Mira Johnson: That's a good one because I think if you're going to do it on your own, it's going to be a really rough path because you don't know everything.

Having a strong advisory team is really important, and I always advise people to look for veterinarian-specific professionals.

There is an organization called VetPartners that is a consortium of veterinary professionals. You can find lawyers, people who do demographic studies, and marketing is really important as well.

There are also people in finance who will help with due diligence when you're buying an existing practice.

I think, Angie, you hit it right on the head.

Creating an advisory team is definitely going to help you get there faster and avoid some pitfalls.

Angie: Mira, thank you so much for joining us today and sharing your insight on what veterinarians should consider when deciding whether to build a new practice or buy an existing one.

Practice ownership is an exciting step, but as we discussed, it also requires careful planning, strong financial visibility, and the right support team.

Whether someone is considering a de novo practice or looking at an acquisition, understanding the numbers, the risks, and the operational realities can make all the difference.

For all listeners who are dreaming of owning a veterinary practice, we hope this conversation gave you a clearer starting point and a better understanding of the questions to ask before taking the next step.

Thanks again to Mira Johnson of CPAs for Veterinarians, JF Bell Group, for being with us today.

And thank you to all our listeners for tuning in.

Be sure to join us for the next episode as we continue bringing you expert conversations to help veterinary professionals grow stronger, smarter, and more successful practices.