Developing a Strategic Business Plan for Your Veterinary Practice
Joe Horner, Extension Economist
Commercial Agriculture Program
University of Missouri
Columbia, MO 65211
Abstract
Food animal veterinarians are
faced with the need to adjust
their implicit or explicit business
plan due to rapid technological
and structural changes within
the beef, dairy, and swine
industries. Veterinary practices
that are proactive in identifying
threats and opportunities can
better position their practices to
benefit from the opportunities
while managing the threats
posed to their practices.
Business planning is a process
that compels the practice owner
to think of their business as an
integrated set of business
practices, focused on the
mission developed within the
plan. This paper seeks to
explain the process of
developing a veterinary practice
business plan, with an outline
and examples to guide practice
owners in developing their own
strategic business plan.
Why Develop a
Business Plan?
There are two common reasons
to develop a business plan:
1.) To attract capital to the
business, either by
acquiring a loan or an
investor
2.) To complete a strategic
guide for creating
policies and practices
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to develop the business
in the future
In this paper, it is assumed that
veterinarians are primarily
motivated by the second reason.
Business planning of any kind
compels the owner to think in a
systematic, integrated way about
their business. However,
business plans that are
developed with the goal of
attracting capital tend to spend a
higher proportion of their effort
in creating the financial section
of the business plan. Because
this paper is written for the
practicing veterinarian, it will
focus on the strategic segments
of the business plan for the
veterinary practice, and have
less emphasis on developing the
financial section of the plan.
What is involved in a
Business Plan?
Developing a business plan is
about thinking more than
writing. First, the planner
determines what he or she wants
the “big-picture” to be, based
upon their core competencies
and goals. Next, the blueprint
for the practice is developed
through a structured outline.
Over time a detailed,
comprehensive plan takes shape
as the pieces are knitted together
in an integrated fashion. Ideally
a business plan for a veterinary
practice is updated annually to
serve as a road map to the future
and as an audit to validate if the
practice is staying on the
planned course
There are several different
outlines available for developing
a business plan. All of them
basically are focused upon
describing the 3 C’s:

The Company
The Customer
The Cash

To create a complete business

plan usually takes 40 to 400
hours, and fills 10 to 30 pages.
Like a house, it is built once and
updated forever.

Basic Outline:

There are eight sections of a

business plan for a vet practice.
What needs to be covered under
each of the seven sections will
be elaborated in the following
pages.

Cover Sheet
Statement of Purpose
Table of Contents
Business Description &
Strategy
Financial Plan
Summary
Supporting Documents

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Cover Sheet
This is an easy first step, but an Identify Core Develop Identify
important one. The first page Competencies Business Plan Opportunities
Services & Solutions
should look clean, organized,
complete, and professional. Competency Target Market 1

Whether the plan is strictly for 1 Low Price

High
internal use or for capital Volume
Target Market 2
suppliers, the cover should make Low Volume
Competency High Price
the statement:
2
“WE ARE A SERIOUS Specialty Target Market 3

BUSINESS.”
Competency Spin-offs
Include these items on the cover 3
From specialty

sheet:
Caution: Thinking Required
Practice Name
Practice Address
Table of Contents
Owners
Phone number of the practice The table of contents is the third
and the owners page, but is completed last. It is
Fax number simple, but it makes a powerful
Web page statement: “We are organized.
E-mail We do not waste time turning
Consider including a picture pages.”

Statement of Purpose
Business Description
The second page is another
simple step. A paragraph or two & Strategy
on a page by itself defines the
purpose of the business plan.
The Practice: Identify Core
For example: Competencies

This is the strategic business Describe the practice:

plan for Hill Country Vet Clinic, Legal structure &
LLC. We are a two person, ownership
mixed animal, veterinary Location
practice based in Anytown, Leases
Missouri. The following pages Employees & job
describe our practice, the descriptions
market it serves, our customers, Facilities & layout
the core competencies we have Hours of operation
developed, the opportunities we Emergency practices
have identified, and how we Equipment
plan to take advantage of those Sideline businesses
opportunities in the future. A
complete marketing and Describe the doctors:
financial plan, as well as the Training
supporting documents for our Employment contracts
clinic are included. Experience

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 List the core Map obvious animal
competencies concentrations
Population numbers &
Brief financial description: demographics
Total assets, liabilities, &
annual revenue Define the competition
List the competition &
The Market: Identify map them
Opportunities Define their strengths
& weaknesses Estimated
Define the overall market in market share by category
which you work
Geographic area – Map
included
Farm numbers and
demographics
Animal numbers by
species
STP -- Segmentation, Targeting &

Segment Target Positioning

Identify market segments Select segments that are Create “solution” for target
Develop profiles of segments client based upon competency
attractive to your practice

Positioning

Segment the Market Using “Scale of Business”& “Motivation”

to segment the market
Divide the market up into Scale Cow/Calf Cow/Calf Cow/Calf
different, easily definable 1 to 40 hd. 40 to 100 hd. >100 head
niches. Motivation
Lifestyle Market Market Market
Typical ways to segment a Segment 1 Segment 2 Segment 3
market include: Scale of
Business Operation,
Geographic, Demographic, No/Low Market Market Market
Income, Occupation, Input Segment 4 Segment 5 Segment 6
Motivation, Life Stage, &
Loyalty. Cost Benefit Market Market Market
Analyzer Segment 7 Segment 8 Segment 9

Target the Market

Based upon estimated profit

margins, volume of business,
and the core competencies of the
practice, choose which market
segments are most attractive to
your practice.

Select the market segments that

your practice wants to target
going into the future.

Positioning the Vet Practice

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In this step, one identifies
possible positioning concepts
for each of the targeted
segments.
Profile each Segment:
Thinking like a typical customer
of each market, develop a
profile for the client in each of
the niche markets. Define
exactly what veterinary services
each segment wants and what
the segment may be willing to
pay for that service.
Market Segment 1
Typical Client:
They have cattle so their
children can grow up the same
way they did. He or she wants
convenience because the living
is made elsewhere. Time is
scarce. Cows may be named.
Treat like a companion animal
customer. Will pay for
prevention. Mr. “Don’t hassle
me, here’s a check!”
Traditionally, businesses were
defined by whether they were
products or service oriented.
Today, many effective
businesses realize that
marketing a “solution” to a
problem is a more effective way
to package and sell their
combined products or services.
“Solutions” to customer
problems may be easier to sell
because it may be simpler to
communicate the value of a
“solution” than it is to
communicate the value of a
service or product. Also, firms
often find they can charge
higher margins for solutions
than either products or services
due to the fact that customers
have more difficulty comparing
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Develop and price a vet service
package for each of the targeted
segments.
prices against head-to-head
competitors.
The challenge with marketing
solutions instead of marketing
products or services is that the
customer must become the focus
of the marketing strategy. The
marketer must truly understand
his or her customer’s perceived
problem in order to package a
specific solution to that
customer.
Extract Income from
Opportunities
This is the heart of the
business plan, where all the
thinking ties the pieces
together
After the description of the
practice and the market, the vet
business plan details which
segments of the market are
going to be targeted and how. A
brief description is made of how
each particular vet service
matches the practice’s core
competency with a target
market’s needs.
Financial Plan
The three financial statements
listed below are part of a
standard business plan.
Existing practices that have an
ongoing relationship with an
accountant may simply request
that an annual income statement,
cash flow statement and balance
sheet be prepared for inclusion
in the business plan.
Incorporated practices are most
likely to have these statements
already prepared. For those
practices that need to prepare
the statements themselves,
simple guides are available from
some of the business planning
web sites listed in the resources
at the end of this paper.
Income Statement:
An income statement or “profit
and loss statement” is an annual
accounting of profitability. It
includes cash income and
expenses as well as changes in
inventory and non-cash
expenses such as depreciation
and amortization of goodwill
from purchasing an existing
practice.
Cash Flow Statement
A cash flow statement lists the
sources and uses of cash during
the year. Operating income and
expenses are listed as well as
new borrowings, debt
repayments, and capital
infusions and withdrawals. A
monthly, quarterly, or annual
cash flow statement is prepared
depending upon how critical
cash management is to the
business. Projected cash flow
statements are normally part of a
loan request. They can be easily
prepared by editing last year’s
actual cash flow statement to
reflect expected changes in the
coming year.
Balance Sheet
A balance sheet is a complete
detailed listing of assets,
liabilities and owner’s equity.
Normally it is best done at the
end of the practice’s fiscal year
so that it can be aligned with the
income tax return to analyze
progress.
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Summary
A simple one-page summary of
the overall business plan is the
final touch before attachments.
It is a final opportunity to make
an integrated, cohesive whole
out of all the different pieces
that have been fitted into the
business plan for the practice.
Supporting
Documents
This section may be altered
depending upon whether the
purpose of the business plan is
to secure capital or to guide
internal strategy.
Typical attachments may
include:
Resume(s) of doctors & owners
Partnership, LLC, or
Incorporation papers
Employment Contracts
Leases
Loan Information
Demographic Source Material
Business Planning
Resources
Small Business
Administration
Business planning website,
with downloadable outline
file.
http://www.sba.gov/starting/inde
xbusplans.html
Iowa State/Vet
Information Network
Online Course for Veterinary
Entrepreneurial Training
http://www.vetmed.iastate.edu/d
epartments/bms/academics/wvet
/pages/learn.asp
SCORE
Service Corps of Retired
Executives
http://www.score.org/

Missouri Small Business

Development Centers
http://www.mo-
sbdc.org/index.shtml

Missouri Business
Development Network
library, includes many
useful forms and
checklists.
http://www.missouribusiness.net
/library.asp

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