Most veterinarians experience a range of transitions throughout their professional lives--from buying into a practice partnership, to purchasing or starting a new practice, upgrading and expanding an office space, and planning a practice sale. Consequently, a veterinarian's financial support needs will vary during his or her professional lifecycle, depending on the type of transition.

For maximum success during these periods of growth and change, veterinarians should create an active 5-year plan by following these six steps:

  1. Map out key growth milestones. Create a plan that shows when you will launch your hospital, expand exam rooms, and upgrade equipment. Outline exactly how you want your career and hospital to grow, thus enabling you to prepare physically, emotionally, and financially.
  2. Identify a core team of reliable advisors who can support and guide you through the various phases of your career. Surround yourself with people you trust to help you meet your 5-year plan goals. Though members may change as your career evolves, your core group should initially include:
    • Lender or bank: helps structure financing that fits within your budget
    • Attorney: negotiates and drafts contracts, leases, and employment documents, and provides tax advice and planning
    • Accountant: provides accurate hospital accounting and filing of tax documents
    • Insurance broker: preserves hospital value by insuring it against loss
  3. Develop a well-constructed cash-flow projection. Achieve profitability while demonstrating your plans for realistic hospital growth. Keep a monthly cash flow projection for 12 to 24 months, and an annual projection for 5 years. Update and regularly track your projections. Use this formula to project your net cash flow:




    Estimated annual revenues:


    Minus fixed expenses (rent, insurance):


    Minus variable expenses (dental supplies, lab work)


    Minus staff costs (salaries, benefits)


    Minus cost of debt service


    Equals Net Cash Flow


    The resulting net cash flow figure may indicate a need to increase your annual revenues in order to maintain current standards or meet future goals.

  4. Account for rapid changes in veterinary technology. If you are a hospital owner, your 5-year plan needs to take this into account. Computerized client flies and instant information sharing are becoming more prevalent every year. Stay current with the competition and meet the expectations of today's consumers by including funding for technology upgrades.
  5. Develop a marketing plan and strategy. Marketing helps secure your current cash flow and attract new clients. An effective 5-year plan includes marketing tactics to support your hospital through a particular transition period. For example, if you begin to provide a wider array of services, how will you reach out to clients and prospects to start scheduling for these services in advance to see a quick return on your investment? Will you use client letters and referrals, a direct mail campaign, a promotional discount? Map out exactly when and how you will market your new services and meet your goals.
  6. Maintain a healthy credit profile. Since you will likely need funding for any significant hospital growth initiatives, a cornerstone of your 5-year plan is maintaining a healthy credit profile to ensure you qualify for financing at the best possible rates. To help build a healthy credit profile:
    • Maintain at least two revolving credit accounts to show you are credit worthy.
    • Demonstrate you know how to manage credit wisely--do not use all the credit available to you.
    • Do not apply for credit with too many lenders within a short timeframe, as this can negatively impact your credit rating.
    • Always make on-time monthly payments to demonstrate you are reliable in paying back your loans.

If you're ready to talk about loan options for your practice purchase, start-up, expansion, or upgrade, call us at Wells Fargo Practice Finance to find out about our practice financing packages. As an AAHA member, you automatically qualify for preferred rates on competitive fixed-rate loans.

To learn more, call your Wells Fargo financing specialist at 866-4MY-PAWS (866-469-7297) or visit us at

All financing is subject to credit approval and, as applicable, SBA eligibility. 
© 2014 Wells Fargo Bank, N.A. All rights reserved. Wells Fargo Practice Finance is a division of Wells Fargo Bank, N.A.

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