Practice owners find ways to rebuff recession and grow practices

NATIONAL REPORT —As the economy begins a slow rebound, some veterinary practice owners have found success in fending off the recession while simultaneously renovating or expanding their clinics. Here are two success stories.

Sand Creek Animal Hospital

Dr. Matt McDaniel started Sand Creek Animal Hospital in Colonie, N.Y., in 2002 with his wife, Dr. Anne Marie Carmichael. Business was good, allowing the husband and wife team, along with a third associate, to focus on practicing medicine.

"When the economy hit (the brakes), it made us focus more on the business," says McDaniel, adding he noticed big changes in the practice a few years ago as the economy declined.

"Up until 2009, we experienced solid growth." And then, it declined.

The last two years have focused on maintaining positive growth, he says, despite struggling to keep up the practice's average transaction fees and increasing patient visits.

Prior to 2008, he relied mainly on good medicine and word-of-mouth advertising to bring in new clients. But since then, McDaniel says his practice has a much more active marketing plan centered on the Internet.

"We've become very Internet focused, from email communication with clients to Facebook," he says. "I have a staff member who has spent considerable time with Facebook and email marketing."

McDaniel says this staffer sends targeted emails to customers about tick prevention and dental health. Between maintaining communication with existing customers and reaching out via the Internet to bring in new clients, McDaniel says the plan appears to be working.

"You do things and some work and some don't. But where we have been lucky is we have been able to maintain (business) rather than lose it," he says. "It sounds like a lot of practices have not been able to maintain."

McDaniel says his new client numbers aren't what they were four or five years ago, but they have remained steady.

"I think we're doing better than some because we've been able to maintain it," he says. "And we've done it by being much more focused on and paying attention to providing really good customer service, focusing on the value of service and marketing those services."

That success has enabled McDaniel to be able to finally move forward with his three-year-old plans to expand his practice. In his initial efforts to expand from his current 3,000-square-foot facility, McDaniel says some part of the deal never worked out.

But by waiting, he was able to take advantage of the real-estate market, low interest rates and low labor costs.

He found a paint store that was looking to downsize its space but stay in its current, 15,000-square-foot building.

Securing financing was the most challenging aspect of this kind of transaction, he says.

The bank that loaned him money to start his practice in 2002 would not finance this expansion, McDaniel explains, and there were many other rejections before he finally found a bank willing to lend him the $3.1 million he would need to buy the paint store's building. Pulling off the deal took a lot of time to educate the lender, he adds.

"It took a lot of work. I had multiple lenders when I started the practice offering loans and could pick and choose somewhat to have them bid against one another for the loan," McDaniel says. "I spent a lot of time talking with the bank and telling them about my practice, about the financial aspect of the practice, and where we thought this would take us."

Although he declined a start-up loan through the Small Business Administration, McDaniel notes that it was the only kind of loan he could find now.

"The lending was a lot harder to get ,but the advantage is we've been able to purchase real estate that three or four years ago we would not have been able to afford," he says. Plus, there are a lot of contractors desperate for work, so McDaniel says he can do renovations to the building for much less than he could have before.

The final deal lets McDaniel purchase the building, lease back half of it to the paint store and build his practice in the other half. The deal increases his clinic size from 3,000 square feet to 8,000 square feet.

North Royalton Animal Hospital

Dr. Adam Hechko took over the North Royalton Animal Hospital in North Royalton, Ohio, in 2006, just six weeks after earning his DVM from The Ohio State University College of Veterinary Medicine and marrying his college sweetheart.Hechko says buying the practice was an opportunity he couldn't pass up.

After five years of working 12-hour days, six days a week and increasing the practice's client base from 300 to more than 3,000, Hechko was finally able to hire an associate in the summer of 2011 and begin work expanding the 2,500-square-foot hospital.

About 1,500 square feet of his clinic is used for hospital space, with one operational exam room and another that doesn't really fit the need. The other 1,000 square feet of the clinic is used for boarding, and there is an off-site doggy daycare affiliated with the practice.

Adding a second doctor allowed Hechko, a father of two children under the age of 5, to take more time away from the practice. It also added new challenges—like seeing patients while two doctors were on call at the same time.

"We've found we just needed more space," Hechko says. "It is a challenge every day to make sure we get our patients in and out of the rooms and still provide the quality we want."

His new hospital, slated to open this summer, will measure about 14,000 square feet with six exam rooms for veterinarians and one dedicated for technician appointments. The facility will also include space to move the doggy daycare business on-site and offer a dedicated room for alternative treatments like laser therapy and acupuncture.

The new building will allow Hechko to provide the kind of service he believes sets him apart from his competition—whether that is another veterinary practice in the area or a big-box store filling veterinary prescriptions.

"People can't go to (big-box stores) to get the service you're going to provide to them," Hechko says.

The 31-year-old practitioner says that while others are turning to the Internet to drive new customers to their practices, he depends on more traditional methods.

"I've really focused on customer service and providing good medicine," he says.

"We have experienced great growth here every year," says Hechko, who estimated his practice's overall growth at more than 15 percent every year since he took over the practice (even during the recession).

"I (go for the) personal touches to build value," he says. "When I walk into a room, my attention is entirely focused on the client. I don't rush."

Hechko says he puts a lot of emphasis on sitting down with a client when he enters a room, shaking his or her hand, and leaving time at the end of the visit for questions or additional discussion.

"Even when we are busy, just the simple fact of sitting down gives those clients the impression you have all the time in the world and you're not rushed," says Hechko.

That client-focused service is something he fosters among hospital staffers too. Clinic staffers follow a protocol on how to greet clients on the phone or when they walk in the door. Clients notice, he says.

The practice has a Facebook page that it updates once a week and is growing, but Hechko says its doesn't replace quality customer service.

Clients with pets staying at the hospital get frequent updates, and new patients get a follow-up call three to five days after their first visit, he says. Staff members are forced to find out how a new client came to the practice through the clinic's computer system, which prevents staff from moving forward in processing a new client until they ask how they heard about the practice. This tool also allows Hechko to send thank you cards to clients who refer new customers. Sometimes he even sends gift certificates for those who frequently refer new business.

Despite running a successful practice, Hechko says it was still challenging in today's economy to find the right way to finance his expansion.

"It was tough. When we start looking at how we're going to do a project like this, it takes a lot of time; it takes a lot of investigating with different banks," he says.

Hechko was interviewed extensively about his practice and future business plans by his lenders. They also required projections that indicated future growth, he adds.

"As they got to know my wife and I, and as we walked them through what our business model was, we were able to secure the loan that we needed," he says.

Hechko received multiple offers for financing and says interest rates were "better than I expected." In the end, he was able to choose a lender based on the type of working relationship it would have with his practice.

"We were able to choose the bank that we felt was going to be a partner in this project," he says.

Hechko doesn't see the practice's growth slowing either. In fact, after his new clinic opens this summer, he is planning to add a third full-time associate.