The (unsung and underappreciated) virtues of a regional rural practice purchase

For every good practice that Practice Sale Search has for sale in one of the state capitals, we have many buyers competing with each other to submit a winning bid… and yet… when the practice is located in a regional or rural centre, the demand often dwindles…

Why is this?

There are many reasons that people want to live close to the city. These reasons include proximity to their family, ethnic group, international airport, prominent schools, etc.

There are also, however, many HUGE advantages to buying a practice outside of capital cities that are often overlooked.

Here are 5 reasons a buyer should consider buying a vet practice in regional or rural Australia.

  1. Better Deals
    The laws of supply and demand tell us that the lower demand for regional and rural practices should mean that there are better deals to be had for interested buyers.
  2. Easier to produce more
    Practices in major cities are fighting tooth and nail for work, spending large budgets on marketing and advertising and offering loss leader services to get busy. Rural areas have a much higher population per vet and don’t need to compete as hard to get patients. It is simply easier to be busy.
  3. Running costs lower
    A business’s profit is obviously not just a function of making sure that there is income (, but also of keeping expenses low. In this area, regional Australia has metro beat too, as many of the costs of running a practice are cheaper outside of the cities. In our experience, regional/rural vet practices usually pay less for:

    • Wages/salaries for admin and nursing staff and have better retention/less churn of staff.
    • Rent per square metre for medical/commercial space.
    • Advertising costs, as the need for advertising is lower (See point 2).
  4. Home purchase
    When looking to purchase your first home, you may find that the higher property prices in metropolitan Australia end up restricting your lifestyle. Buying a business in a Rural/semi-rural area may offer you the chance to buy a larger home than you thought possible, earlier than you thought possible. The lower outlay for a home may also leave you with more to spend on holidays, hobbies and your children’s education.
  5. Lifestyle:
    Many veterinarians who have made the move out of the cities report huge lifestyle benefits including:

    • Less time wasted stuck in traffic (including their work commute)
    • Better access to uncrowded beaches, parks and golf courses
    • A better sense of community and safety than living in the city
    • Less stress as a result of their cheaper lifestyle

As you can see, walking the path less travelled and buying in regional Australia has many advantages. It is well worth exploring your options, as you may well find that there are plenty of underappreciated, undervalued practice opportunities and lifestyles to be found, if you can look a little further afield.

How can your business do better in the face of a possible recession?

There is no doubt that we are facing a global recession. The extent to which it will affect veterinary practices is unknown, but an astute business owner would be wise to at least give this some thought, and NOW is the right time to do this.

Regardless of whether you are thinking about the value of your business or carrying on being a business owner, in times like this, maintaining your profit margins is critical.
If you are selling, then the element that has the greatest impact on the value of your business is PROFIT. Low profit means your business values low and higher profits means it values for more.
If business ownership is going to be your calling for the next few years, then profit is also going to be important, because this is how you are going to maintain your lifestyle, keep your team gainfully employed and continue equipping your practice so that you can treat your patients optimally.

In a recession, one of the challenges you will face will be that pet owners may struggle to pay large bills. So, in the absence of being able to charge more, where can you look at improving your financial position?

The answer lies in being more efficient – being able to do the same or even more work without feeling like you are working harder. Another way of looking at this is the ability to maintain your current workload by running leaner. To do this, your business needs structure and the ability to leverage on tools that help to do the same things faster. And there are literally hundreds of things you can do in this space, but it requires a slight change in focus.

Here are some examples:

Having a good X-ray processor instead of an old slow one – this may sound like a paradox because it costs money to have this bit of equipment but, in a veterinary practice, your greatest expense is the ‘time of your team’. If it takes people longer to do a job, your wages are higher. And this is particularly true of items of equipment that are used FREQUENTLY.

If we are thinking about running leaner and the paradox of getting extra equipment, then consider also NOT buying or upgrading equipment you do not use! An ultrasound machine is a good example of this. The average vet practice does under 20 ultrasound procedures per full time vet a year – that is at best one every 2 weeks. So be honest with yourself, if you don’t use it, don’t upgrade it or buy it.

Technology is probably one on the greatest levers you can use in times like these. A great example here is enabling and encouraging online appointment scheduling. This allows customers to book at any time of day and zero input from the reception desk – less staff time.

For the reasons above, APL Accountants is going to make EFFICIENCY and LEAN TEAMS the focus of many of their materials and events over the next few months, because we feel that this is the best strategic focus for the next 12 months.