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.