Building a veterinary practice on a budget

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Finding the money to build a brand-new practice in the current economy may sound as crazy as installing chocolate fountains in the break room, but that doesn’t mean you should let your hospital go out of style.

“If you own a practice, there is a 100 percent chance you will do something to your facility—unless you just let it go to hell, which some indeed do,” says Veterinary Economics Editorial Advisory Board member Wayne Usiak, AIA. Usiak’s short advice: Don’t let your hospital go to hell. After all, your facility reflects your quality of medicine, whether you like it or not, he says.Usiak noticed the declining number of new veterinary hospital projects from 2009 to 2011. However, last quarter he saw the market bounce back and in 2012 he’s seeing that trend remain.

“Large veterinary hospitals, 12,000 square feet and larger, haven’t returned in much volume, though there are some,” Usiak says. “Smaller hospitals of 4,000 to 7,500 square feet have increased in number, as have renovations.” He understands that many veterinarians have chosen to remodel and renovate instead of build new due to lack of confidence in the economy or less available borrowing power.

Veterinary Economics Editorial Advisory Board member Dan Chapel, AIA, agrees that during the past five years it’s been difficult for clients to receive loans to build hospitals, particularly new start-ups.“Ten years ago, veterinarians could go and borrow $5 million. Now not so much,” Chapel says. “That’s why there are many alternative loan avenues, like Small Business Administration (SBA) loans.”

Take a look at the data, courtesy of the 2012 Veterinary Economics Business Issues Survey, and find out if your peers were brave enough to build a hospital and how old they were during their first building project.

Another hospital design trend Chapel sees is older veterinarians performing additions and renovations—some of them even building new—to help transition to a point where they can sell their practices. You wouldn’t think veterinarians in their mid-60s would be doing a substantial hospital makeover, but they are now, Chapel explains.

“Over time, they figured out they’ve got to have a good product to sell,” he says. “It’s smart to assess what you’ve already got. If you’ve got a hospital on its last legs, it’s going to be very difficult to attract young practitioners interested in purchasing.”

Chapel points out that no veterinarian looking to own is going to want to pour a million dollars into a hospital right away. He or she would rather finance that with the purchase. Usiak says another thing to understand is that in the past many veterinarians put off building or remodeling as long as they could. This meant some had to start design projects even though it wasn’t a good time for the practice financially.

“Many of those were our clients in the depths of the recession, as opposed to the forward planners,” Usiak says. “We’re now seeing both types of clients—the planners and the procrastinators. This to me is a further indicator that some normalcy is returning.”

Click the Next button to check out hospital design data from the 2012 Veterinary Economics Business Issues Survey and click here for quick design tips.

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Click the Next button and read on for quick design tips.

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Quick tip #1: Make every space count in the clinic

Building a new veterinary practice is costly, so it’s a good idea to make different spaces serve multiple purposes, says architect Dan Chapel, AIA.“Include a room in your hospital that can be an exam room, but when you’re not busy it could be a special procedures or an ultrasound room,” Chapel says. You could also use the room to perform endoscopy procedures, he adds.

If you create flexible spaces, you can build a smaller hospital or get more use out of the hospital you already own, Chapel says. "Try to make each square foot do several things for you."

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Quick tip #2: Stop, drop what you're doing, and consult first

The economy taught veterinarians an important lesson, according to architect Wayne Usiak, AIA: Don’t build a larger building just because the bank will loan you the money. Figure out what you need, what your practice can financially sustain, and what your clientele will support.

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Quick tip #3: Don’t construct—convert your practice

Instead of designing a totally new veterinary practice, you can find the right existing building for sale, says Dan Chapel, AIA. “There are a lot of buildings you can buy for 50 cents on the dollar because so many businesses have gone under during this recession,” he says.

Look for facilities with wide-open spaces so you don’t have to do a lot of demolition or tear down walls. Wayne Usiak, AIA, says he’s helped build veterinary hospitals out of furniture stores, electronic warehouses, restaurants, banks, and even some small factories.

Many times you’ll get the parking lot, parking lot lights, nice landscaping, and, if you’re lucky, good handicap-accessible restrooms that come with purchase. Many of the key ingredients to a hospital will already be in place, Chapel says.

“For people who like to recycle, it’s the ultimate green solution,” Chapel says. “My goodness, if you can recycle a whole building—what’s better than that?”