AUGUST 17, 2022 (24-MINUTE READ)

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David Soto:

Since the pandemic with an increase in pet ownership, we've seen the high demands for veterinarians. ... So I'm hoping that ... continues to lead to more people wanting to go the veterinary medicine route and become doctors, because now more than ever, we're going to need them as we continue on this trajectory.

Corey Brown:

I'm Corey Brown, and this is Provide's The Path to Owning It Podcast, where I sit down with trusted industry experts and Provide's network to give you the tools and advice you need to take your practice ownership dreams into your own hands from owning your own practice to expanding our improving an existing practice, we'll help pave the way for you to achieve your dental or veterinary career dreams and guide you through all the nuances of the practice ownership journey. Please make sure to follow us on Apple Podcasts, Spotify, or wherever else you listen. On this week's show, we'll discuss why now is the time to own a veterinary hospital. We're joined by David Soto, a regional director of practice finance at Provide. David is a graduate of the Ohio State University and has over 10 years of experience in the industry providing veterinary-specific financing. From underwriting to outside sales, he understands the process from start to finish and can help guide healthcare providers as they embark on their practice ownership journeys. David, we're glad to have you doing the show today. Welcome.

David Soto:

Thanks for having me. I'm excited.

Corey Brown:

Yeah, we're excited too. I want to get your perspective for all those who are considering the path to veterinary hospital ownership. So let's just dive right in. You've mentioned in previous conversations we've had that the veterinary industry is really booming right now. Can you walk me and our listeners through the trends you're seeing in your day to day?

David Soto:

Yeah, absolutely. I think we're seeing essentially more pet owners since the pandemic. We've seen an influx in people adopting or fostering pets. So this increases the need for these pet owners to take their pets to the veterinary to keep up with the standard level of care. So over the last few years, we've seen an up take in that, which, in essence, is a great thing for the industry, because it means that a lot of our vets are super busy, almost as if they're busting out the seams, but all positive because the trajectory as far as where the industry is headed looks good from this perspective.

Corey Brown:

And why do you think the pandemic played a part in more people becoming pet owners?

David Soto:

I think the unfortunate events of the pandemic, as far as the uncertainty and not knowing whenever life was going to get back to the norm or this new norm that we're in. And just speaking for myself, being a single person and being home alone, I think a lot of people didn't want to, essentially, be at their respective homes alone. And this is where a lot of the shelters were emptied out. People went and fostered some of these pets and I think they grew attached to these animals, rightfully so. These animals became an extended person in their respective families. I think that aspect of loneliness or the uncertainty that the pandemic brought provided some safe haven and some comfort with some of these animals. I think people just continued, in that respect. And, again, the vet industry just boomed from that standpoint.

Corey Brown:

So David, do you see that trend of increased pet ownership continuing post pandemic? And do you continue to see or predict that this boom will progress in the future?

David Soto:

We're not seeing any slowing down in that sense as far as pet ownership or even adoption. So I think the trend will continue. Again, to my last point, as far as these pets becoming an extension of people's families, I think what it's leading to is just keeping up with that standard level of care and making sure that their pets are seeing the vets often, which is all positive and obviously allowing pets to live longer. So I think given the pandemic, again, an unfortunate event, but in the veterinary industry is something that helped really grow and really put a focus and an importance on people with pets and just continuing to deepen that. So I don't think this is slowing down. I think it's all positive for the industry.

Corey Brown:

As a dog owner myself, I couldn't imagine going through the shutdown and everything without little Oso by my side. So I can totally understand why people would feel that way too. Let's dive in a little bit more into actual ownership. It seems like more and more veterinarians are going the startup route when it comes to ownership. Is that what you're seeing? And if so, why do you think that is?

David Soto:

Yeah, so we have seen influx in a lot of veterinarians who, again, have these practice ownership aspirations going the startup route and I think there's a multitude of reasons for that. One, the influx of these larger corporations coming into the vet industry and, essentially, buying some of the practices that are higher in gross revenue. So the scarcity in what clinics are available to be purchased by existing veterinarians on the private side are essentially diminishing. So a lot of my doctors want to become practice owners and the next best thing is to start their clinics from scratch and them going that route and partnering with the right people to ensure that their practice ownership dreams do come into reality is something that they're pursuing. And a lot of my doctors are pursuing startup clinics at a high level and there's ways for us to essentially reach that endgame.

Corey Brown:

What are some of the benefits and risks associated with starting a new hospital, let's say, versus acquiring an existing one?

David Soto:

So I think let's start with the benefits. The benefits of starting your own practice is just that, you're running at how you deem, you're hiring the staff that you want to help build that clinic. And oftentimes from a banking perspective, a loan perspective, these are smaller dollar amounts. So being able to start your practice from scratch at all lower dollar amount and, again, in the vet industry, a lot of our clients are debt conscious. So they don't want to take on too much debt, which is perfect, because I'm the same way. So being able to pursue this practice ownership from a different route, as opposed to buying an existing and starting your own has been very beneficial for my clients. As far as the risks associated with a startup, with any business, when you're starting from scratch, I think that's a risk in and of itself.

David Soto:

You're tasked to build a practice and, as an owner, you're responsible for everything. You're responsible for that growth. You're responsible for your staff. You're responsible when something goes left or a client is unhappy. So I think even though you have aspirations from a business side, mentally, you have to be just as prepared, because you're going to go through ups and downs. And my mini-mantra is just stay the course. That's something that I love to preach to my clients and I utilize that in my day to day. So there's benefits and risk in everything, but it's a great position to be in.

Corey Brown:

So David, when you're discussing the benefits and risks of starting a practice from scratch versus acquiring with a new doctor, what are some of the factors that you would discuss with them to ultimately lead them to the right decision for them?

David Soto:

I think, ultimately, I play off what the doctor wants. Depending on where they're wanting to start to practice or even purchase a practice, what's the availability? Are there existing practices in that region that are for sale? The type of medicine that they're currently practicing, does that fit your style? And if it doesn't, then you guide them and say, "Hey, have you considered starting your own practice for scratch?" And it's just more or less being a consultant and advise them and saying, "Hey, there's other options out there. And if you decided to pursue a startup, here's how we can help. We can essentially aid as far as helping you build that team that can be there every step of the way." But primarily it's up to the doctor to decide what they want to do and it's up to me to understand empathize and just guide them and say, "Hey, here's option one as far as what we can do to help you out, if you wanted to purchase, or if there's nothing available, let's consider a startup route. And here's, again, some of the things that we can help with in that respect."

David Soto:

We try to tailor it to the doctors directly.

Corey Brown:

And you mentioned that team that the doctors can rely on. Can you speak to those vet-specific experts that a doctor should definitely have on their side when they decide it's time to pursue the ownership route?

David Soto:

Absolutely. I think a lot of my veterinarians will come to me and say, "David, you know what? I went to school to become a doctor. I have no idea or understanding of the finance aspect or the business aspect," which is perfectly fine. We understand. But as far as that team that you're wanting to build, especially when you're starting your own clinic from scratch, my advice would be to work with people that understand your industry, that speak your language, that have experience doing these types of projects, because it really will, essentially, streamline and make that stressful process more palatable. I always recommend a bank that's going to be innovative. That's forward thinking that, again, has an understanding of the veterinary industry. And in addition to the bank, you'll want a commercial realtor. Someone that's living in the area, more familiar with the area that you're wanting to start.

David Soto:

My general rule of thumb is, "Hey, one of the most important things about starting your business is location." It has to make sense from a multitude of different aspects, but that's where your commercial realtors will come into play. They can help with demographic reports. They can help put, some sort of household comparison to make sure that the demographics are what you're wanting. In addition to the realtor, you're definitely going to want an equipment vendor or supply company, an attorney, insurance agents, CPAs, you name it. Partnering with the right people, building that team, leveraging the folks that have done this for many years, again, just helps streamline everything. And what I always say is there's never a project that's the same. You're always going to encounter something that no one was expecting, but with that team that you've built, we all can, essentially, make sure that we resolve any obstacle or any issues that comes about very quickly so that we're still adhering to your desired date of opening. So I think that's important.

Corey Brown:

That's great advice. In today's economic environment as well, what kind of steps should a doctor take to start this journey? What's the first thing they should do? Can you speak to that a little bit as well?

David Soto:

I think a lot of doctors, obviously the focus has been just veterinary medicine and, rightfully so, they're preferred professionals. We understand that, "Hey, they're going to go to school for a long time to ultimately become doctors." I think if you have aspirations of practice ownership, first and foremost, I'd reach out to a lender, just have a conversation with that lender, understand what it takes to even get approved for a loan, ask questions. What I tell my clients is, "Hey, if you're not asking questions and you're not understanding the process, then I'm not doing my job." And I think, ultimately, the goal is to make sure that we're that voice of reasoning. We approach it from a consultation standpoint, but really just educating our clients as far as what to expect when they are embarking on this journey and the steps they need to prepare for, for when the opportunity presents itself.

Corey Brown:

Yeah, absolutely. And speaking of lending, everybody is hearing about interest rates right now. That's a big topic that a lot of vets are probably considering more heavily than normal. Should that be something that influences them now or is now still a good time to pursue that ownership journey?

David Soto:

Now is always the best time. And when you have aspirations of pursuing anything, especially practice ownership as a bank, we get that question often. And if anyone has been keeping tabs on the market and where things are headed with inflation, the cost of construction, everything is continuing to increase. Thus, interest rates are as well. What I tell my clients is, "Hey, interest rates are merely one component of a loan and that should not deter you from wanting to pursue practice ownership." And, ultimately, when you're considering a bank and whom to work with, you have to look at everything. So, again, with interest rates, just being one component, how much experience does this lender have? How much experience does a person that you're communicating with on a daily have in your industry? What are the terms associated with that loan? Are there any bank fees associated with the loan? What's the process? Is it digital? Are they requiring you to, essentially, complete an application or how's the closing process?

David Soto:

So I think as you're considering which bank to work with, the whole interest rate notion to me is just, again, funny because you do get that often. But really consider everything. And, again, when you're building that team, leverage them. Ask them for guidance. Ask them for recommendations, as far as whom they've worked with in the past and why? I think you'll find that there's going to be some consistent banks and lenders that these folks work with for a multitude of reason, but remind yourself that, "Hey, I'm the captain of this ship. This is what I want to do. Am I comfortable with the decision that I'm making pursuing it with this bank?"

Corey Brown:

That's great advice, David. I appreciate your insight there. After hearing from David about current industry trends and what it takes to start or acquire a hospital, I'm curious about today's veterinarian shortage and how that impacts the industry. We'll hear more from David after the short break. I'm Corey Brown, and this is Provide's The Path to Owning It Podcast. We're back with David Soto, regional director of practice finance at Provide. I'd like to talk about today's veterinarian shortage, David, and why veterinarians should use that as motivation to own a hospital. What do you know about the veterinary shortage and how is that impacting the market?

David Soto:

Since the pandemic with an increase in pet ownership, we've seen the high demands for veterinarians. People are keeping up with that standard level of care from a medical perspective. So they are taking their pets to the vets more often. So in an industry where veterinarians were already spread thin, I think now some of them are really being worked. And I mentioned it before that, a lot of these practices are busting out the seams and it seems as though they're constantly busy and there just isn't as much veterinarians graduating at the level to keep up with that demand. To me, I see that as a positive. I think with the increase in pet ownership, you're exposing more individuals that maybe wouldn't have owned pets in the past whom now are and what happens with pets? You pass that down onto your family. So I'm hoping that this increase in pet ownership continues to lead to more people wanting to go the veterinary medicine route and become doctors, because now more than ever, we're going to need them as we continue on this trajectory.

Corey Brown:

What about those vets that are currently working as non-hospital owners? Does the shortage give them a better chance of ownership?

David Soto:

I think it does. I do know, just speaking with a lot of my clients who are in these practices, a lot of them are just working 60, 70, 80 hours. And are maybe reaching a point where they might feel some type of burnout. A lot of them are deciding to leave maybe these higher-producing hospitals and do their own thing. Do something that is more their style, fits in line with their veterinary philosophy and more client focused as opposed to production based. With this increase in pet ownership and because of vets are spread thin, it's not slowing us down. A lot of them are still going that startup route or purchasing their own practices and becoming their own bosses. No one likes to be told what to do, but when you have the power to run your business how you deem, that to me is really gratifying. And I think a lot of vets are pursuing that.

Corey Brown:

According to the study I was reading from Mars Veterinary Health, the nation's expected to face a shortage of nearly 15,000 vets by 2030. From your perspective, what kind of impact do you think this shortage would have on veterinary communities, like technicians and other hospital staff, pet owners and, for that matter, the pets themselves?

David Soto:

I think with any shortage, you do have to look at the staff and if there's not enough veterinary doctors out there, then there's not going to be any staff or folks that want to get into the industry to have work. So I think that is a concern for us, but something that as we continue to have these dialogue, as we continue to discuss some of these trends and just really spread the word as far as what the veterinary industry is impacting, we're hoping to reach a larger pool of folks that might have interest in joining the industry, becoming veterinarian themselves, or even staff. Technicians, receptionists, you name it. I think the short of itself is only temporary. I think as we continue to progress through this year and in many years subsequently moving forward, there's going to be, from an optimistic approach, an increase in folks that are wanting to come into the industry, which to me will be a positive sign for everyone.

Corey Brown:

Absolutely. You mentioned this temporary shortage. What do you think that hospital owners need today to feel supported that way they don't reach that level of burnout that you had mentioned previously? Is there anything that can be done to help with that in your mind?

David Soto:

I do. I think as an owner, regardless of your business, there's this whole notion that you have to be in control. To me, any successful business, you have to follow the path of letting go. Allowing your staff to help this whole divide and conquer approach. I think the burnout, especially in today's vet industry, is prevalent. A lot of them are being worked to capacity, with what we discussed with influx and pet ownership. Now more than ever, it's time to try and allow an associate veterinarian to come in and may maybe take some of the workload off your plate. Now is the time to take that week vacation or long weekend, spend time with your family, do the things that make you genuinely happy. But in order to do that, you have to be comfortable with letting go some of the responsibilities and what we're seeing in the industry, especially with your older veterinarian owners, it's tough to let go. There's this emotional attachment. This is what they built.

David Soto:

But I think for your own sanity, it's vitally important to let go and try to get some help and ask for help with your staff and other veterinary associates. And to me that will really take your business to the next level.

Corey Brown:

That's great advice, David, what do you think hospital owners can do to help prevent burnout with their staff as well? Not only with them working 60, 70, 80 hours, but their staff feeling the brunt of that too. How can they support them during this time?

David Soto:

I think it's very tough, because everyone's busy and you're working these hours and you're expecting your staff to do the same thing. But honestly speaking, encourage them to take time off, encourage them to utilize their vacation, encourage them to take a long weekend to recharge just to get their mind right, or whatever the case may be. Don't, essentially, talk down to them. Your staff is an extension of your family. A lot of us spend the majority of our times at work, so our staff, that is family, speak to them accordingly, appreciate them, pay them. I say that jokingly, but quite frankly, you pay to retain top talent and it's because of your work in addition to your staff, as far as why your business is successful. And I think what we're seeing in the industry, especially with associate veterinarians and them working more relief hours. Because they're getting paid a premium and they're not constricted to staying at a practice, you pay your staff their worth,

David Soto:

And you treat them with respect, because honestly a great staff is what's going to make the difference, is what's going to take your business to the next level. So I think just encourage it, appreciate the fact that you're doing well and you're growing, but just be thankful and show that to your staff.

Corey Brown:

I can hear a thousand veterinary technicians just applauding you right now, David, on your answers. It's good advice. In real estate, the old saying is location, location, location. True in starting a business as well I would think. Are there any parts of the country where the shortage is particularly acute and on the flip side of that, are there areas where there's an influx of vets and would that be hard for a new vet to become successful in specific areas?

David Soto:

I think it comes back to just preference, as veterinarian, do you want to start, or do you want to practice in a rural area or do you want to do so in the metropolitan area? I think the closer you are to some of these larger cities, the more saturated it may feel. And you may see more veterinarian owners in these metropolitan areas, but I just push the question back onto the veterinarian themselves and say, "Hey, what are you envisioning? Are you comfortable being in a rural area? Is that where you want to be? Or do you want to switch it up and go to something more desirable metropolitan area? Because there is going to be some type of competitive aspect associated with it." But I don't think any area in particular with this industry booming, as we mentioned before, I think now just starting out and location is key, but rural versus metropolitan, I think every area is continuing to grow, especially here in the state of Florida, where from a daily perspective, we're just seeing more and more people move to the states.

David Soto:

So I think here and speaking just from experience, a lot of folks are going to the suburbs and starting their own practice there. It's because of more people coming to the state and new developments, essentially, being built. But I think location is vitally important, but it's up to your personality as far as where you want to be rural or metropolitan.

Corey Brown:

And David, let's leave it with one piece of advice for our listeners who are aspiring to practice ownership. What's the one pearl of wisdom you can give them if they're looking to start their own practice now?

David Soto:

Reach out to some of the industry experts. It's important to understand the process as far as what it takes to become a practice owner, what it takes to get approved from a lender. Speak with your colleagues. Speak with past classmates that have gone to this process that can give you their real-life perspective and what to expect. But, ultimately, understand that this is what you want. And you may be financially ready to make this jump, but it's just as important to make sure that from a mental standpoint, you're ready to endure what's to come. And to me building that dream team or building the team of folks that have an understanding and specialize in the vet industry is important. I think now's the time. If you're ready to move, don't wait. There's so many great people out there that can help see this. And the end goal when I'm speaking with any of my clients is, 




Corey Brown:

Well, thank you for having this discussion with me, David. It was a great insight into the vet industry for both existing and aspiring hospital owners. And just appreciate you sharing your knowledge with us today, so thank you very much.

David Soto:

Thanks for having me.

Corey Brown:

Thank you for joining us for this episode of The Path to Owning it. If you are ready to take your practice ownership dreams into your own hands, be sure to visit, getprovide.com to pre-qualify and browse our practice marketplace, or check out our news page for more helpful resources. The Path to Owning it is brought to you by the team at Provide with production assistance from Sarah Parky, Jessica Arm-Brewster, and Liv Connaughton and is produced by Podcamp Media, branded podcast production for businesses, podcampmedia.com. Producer, Dusty Weis. Production oversight, Larry Kilgore III. Editor, Beatrice Lawrence. For Provide, I'm Corey Brown. Thanks for being on the journey with us.

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