Should You Buy or Start a Veterinary Practice?
The financial shape is different enough to be almost two different decisions.
| Buy existing | Start (de-novo) | |
|---|---|---|
| Upfront cost | $500K-$1.5M (70-95% of collections) | $400K-$700K (equipment, build-out, working capital) |
| Financing | SBA 7(a) practice loan, 10-year | SBA + working capital line |
| Year 1 cash flow | Positive from day 1 | Negative for 18-24 months |
| Ramp | Low growth unless owner adds services | Higher ceiling (2-4× growth possible in strong locations) |
| Risk | Lower (buying history) | Higher (buying a location and hypothesis) |
Why buying usually wins year 1
A practice doing $1.2M collections, EBITDA $360K, purchased at $900K with 15% down. SBA 10-year at 8% = $8,200/month debt service ($98K/yr). Year-1 net after debt: ~$262K. A de-novo rarely matches that before month 24.
Why de-novo often wins year 5+
A successful de-novo with your systems, your brand, your patient relationships grows more aggressively. Five years in, a well-run startup typically has equivalent or higher EBITDA and sells at a higher multiple at exit.
Buy when…
- You need cash flow immediately (loans, family)
- You're risk-averse
- Good practices in your area are for sale
- You can't tolerate 18-24 months of negative cash flow
Start de-novo when…
- You have 24-36 months of runway
- You have a target underserved area
- You want full operational control
- Existing practices are overpriced or poorly run
The corporate-competition factor
Unlike dentistry, veterinary has been aggressively consolidated. Corporate groups (Mars/NVA/MVP) operate at scale with shared purchasing, marketing, and specialty networks. A de-novo competing directly with a corporate practice in the same neighborhood faces real challenges. Location selection matters more than in most industries.
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