As promised, although a bit later than planned, I want to give you a brief overview of Veterinary Services and discuss some of the factors that may affect this industry during the economic downturn.
For those of us who own multiple pets, veterinarians who offer bulk discounts are a dream. In the absence of bulk discounts, a veterinarian dedicated to the cause of providing “affordable” vaccinations and spay/neuter services are a godsend.
Unfortunately, most veterinarians can’t afford to do business in that manner. According to the Hoover’s industry overview, large companies account for only 10% of the market. The majority of the market is comprised of small business clinics that earn revenues under $1M per year.
So how is the economic crisis going to affect this industry? Pet owners are already reducing their ownership; shelters are seeing an increase in owner surrenders. This article indicates that severe abuse and neglect cases are on the increase as well. This in turn increases the veterinary costs for shelters and indicates that veterinarians who provide in-kind services will be taking a greater loss on their donations.
Pet owners are also taking measures that mean fewer visits to a professional. With the advent of at-home vaccinations, owners increasingly are buying maintenance medicines such as heartworm and flea meds from suppliers and in states that do not restrict vaccination administration are pushing the needle themselves.
Along with decreased visits to the local veterinarian, specialists are feeling the effects of the economy. There has been a decrease in recent years of veterinarians whose practice concentrates on large-animals and the news is not bereft of horrific stories about the state of horses who have been neglected and abused because of the costs involved in caring for these animals.
Since the success of a veterinary practice is tied with demographics as pet owners decrease their own number of animals, the industry must rely on economy of scale in marketing practices and business practices to remain profitable.
SWOT
- Strengths: Referrals and repeat business are critical for success.
- Weaknesses: Cost of providing care and supplies increases. Number of abused and neglected animals increased.
- Opportunities: Bulk discounts for routine care of multi-pet families ensures business in the door and referrals.
- Threats: Internet and mail veterinary suppliers.
In conclusion, veterinarians will be tightening their belt just as much as the rest of America and possibly more so since the majority of them are small-business owners themselves. The good news is they will survive because of their professionalism and care; owners will provide repeat business and referrals and that is the path to success for any small business.
