Veterinary Practices

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 28,000 veterinary practices in the US provide preventative, medical, and surgical care for a wide variety of animals. Most veterinary practices are small, independent operations – 86% have a single location, and 85% have fewer than 20 workers. Most practices are private practices and are owned by a licensed veterinarian. Some vets focus on large animals and livestock and work at the client's location.

High Capital Costs

Diagnostic equipment and full laboratory set-ups can require a significant investment.

Shortage of Food Animal Veterinarians

While the number of veterinary school graduates grows at a steady rate, a shrinking percentage of vets choose to specialize in the care of animals used as livestock.

Industry size & Structure

A typical veterinary practice operates out of a single location, employs about 15 workers, and generates about $2 million in annual revenue.

    • The veterinary care industry consists of 28,000 practices that employ 440,900 workers and generate $57 billion annually.
    • Most veterinary practices are small, independent operations - 86% have a single location, and 85% have fewer than 20 workers. Most practices are private practices and owned by a licensed veterinarian.
    • About 67% of vets provide care primarily for companion animals; 4% care for food animals; and 4% care for horses.
    • Large companies include VCA, Antech, and Banfield Pet Hospitals (Medical Management International) through PetSmart.
                                  Industry Forecast
                                  Veterinary Practices Industry Growth
                                  Source: Vertical IQ and Inforum

                                  Recent Developments

                                  Apr 15, 2024 - Strong Growth Projected for Industry
                                  • The US veterinary practices industry is projected to grow at a 5.7% CAGR from 2024 to 2028, faster than the overall economy's expected growth, according to a forecast from Inforum and the Interindustry Economic Research Fund, Inc. Consumer confidence is likely to improve in the forecast period, which bodes well for the professional, scientific, and technical services industries, including veterinary services. Consumer sentiment has also seen a degree of improvement following sustained lower levels. While higher prices and interest rates continue to limit spending, both are expected to improve in 2024. Post-pandemic, consumer spending showed slower gains in 2022 and 2023, supported in part by savings compiled by households from federal pandemic relief programs. According to the forecast, "2024 may bring further deceleration, but improving consumer sentiment may support moderately strong gains in household spending, together with rising wage rates and lower inflation."
                                  • A recent Banfield Pet Hospital poll found that 40% of dog and cat owners don't believe their pet is at risk for getting heartworms, according to Moreover, about 30% said their pets are not taking any heartworm prevention medication. The poll also found that 21% of pet owners don't believe mosquitos in their state carry the parasite, 41% think heartworm is only a risk for part of the year, and 51% skip year-round heartworm protection. However, experts warn that all states are at risk for heartworm, and the rates of heartworm cases are increasing, particularly in southern states. According to Alea Harrison, DVM, chief medical officer of Banfield Pet Hospital, "Research has shown rates of heartworm in pets have continued to trend upward nationwide, despite prevention being generally safer, easier and less expensive than treating an existing infection."
                                  • Inflation was reported as the top business problem for small business owners, selected by 23% of owners in a survey by the National Federation of Independent Business (NFIB). The NFIB’s Small Business Optimism Index fell in February 2024 to 89.4, marking the 26th consecutive month below the 50-year average of 98. According to NFIB Chief Economist Bill Dunkelberg, “While inflation pressures have eased since peaking in 2021, small business owners are still managing the elevated costs of higher prices and interest rates. The labor market has also eased slightly as small business owners are having an easier time attracting and retaining employees.” Small business owners are still encountering high job opening levels, with a seasonally adjusted 37% of owners reporting job openings they could not fill in the current period. Nearly 55% of owners reported making capital outlays in the past six months, with 35% spending on new equipment, 23% acquiring vehicles, and 15% improving or expanding facilities.
                                  • More veterinary practices are taking a proactive approach toward mental health care, according to a recent study conducted by Merck Animal Health in collaboration with the American Veterinary Medical Association. The Veterinary Wellbeing Study examined the well-being and mental health of US veterinarians and support staff. The number of clinics offering an employee assistance program (EAP) has grown from 27% in 2019 to 38% in 2023. The study also found that many veterinarians and vet team members report feeling invested in their work and taking pride in doing a good job. Over 80% said the work they do makes a positive contribution to other people’s lives. According to Merck’s Christine Royal, VP of the companion animal and equine business unit, “There are many positives coming out of the study, including high levels of job satisfaction and pride in work across veterinary teams.” She added that the industry still faces challenges, including a shortage of qualified veterinary team members and student debt that causes stress.
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