Veterinary market update: Navigating trends and opportunities in the industry
Veterinary market update: Navigating trends and opportunities in the industry
Explore the evolving landscape of the veterinary industry with our comprehensive market update. Dive into crucial trends impacting practitioners, from shifting consolidation dynamics to the challenges of labour shortages.
Uncover insights into practice valuation strategies and considerations for a successful sale. Learn about the unique hurdles in adopting telemedicine and stay abreast of the latest tax and regulatory updates.
If you're a veterinary professional, it's crucial to stay informed about the industry's ever-evolving landscape. In this comprehensive market update, we'll explore key trends, challenges, and opportunities that could significantly impact your veterinary practice.
Consolidation in the industry
While consolidation is not a new trend in the industry, there was a significant increase during the COVID-19 era. As homes filled with new furry companions, veterinary clinics got exceptionally busy. The surge in profits led to high multipliers, some exceeding 20 times, and is now creating financial challenges for consolidators due to soaring interest rates. Many consolidators have halted deals in the post-COVID surge, with some walking away numerous deals at or after the letter of intent stage.
Presently, consolidation remains significant but with more realistic multipliers. New players have entered the Canadian market, fueled by an influx of available capital, and this trend will likely continue as the market anticipates more clinics for sale due to an aging owner group.
Setting yourself up for a successful sale
If you're contemplating the sale of your veterinary practice, strategic considerations are crucial. Diversified ownership structures are gaining traction, with an increasing trend of multiple owners. Understanding valuation factors and market timing is essential for a successful sale.
Strategic considerations
- Explore shared ownership, where multiple owners take over from a single owner.
- Aging owner groups will likely increase the number of clinics for sale in the next five to ten years.
- Focus on factors influencing valuation for enhanced market positioning.
Labor shortage and pay disparities
Similar to many other industries, the veterinary field is grappling with a tight labour market. Statistics from the Government of Canada reveal that from 2022 to 2031, new job openings for veterinarians are expected to total 5,000, while 4,300 new job seekers are anticipated.
To address the shortage, Canadian veterinary programs are increasing class sizes and enrolling more international students, which will expand the labour market. However, starting veterinarian salaries are less than average and trail behind the pay scales of dental and medical industries, thus making the veterinary industry less attractive.
Telemedicine attempts and failures
Unlike medical or dental fields, where virtual check-ups have found more acceptance, the veterinary industry's distinct nature poses hurdles for the seamless adoption of telemedicine practices. The challenges highlight the need for tailored solutions to bridge the gap between technology and the specific requirements of veterinary care. It remains a space where traditional in-person consultations maintain dominance.
Latest tax and regulatory updates for professionals
How we can help
Tax and accounting
Stay ahead of the evolving tax landscape with our customized tax and accounting services. Our advisors are well-versed in the intricacies of veterinary finances, ensuring compliance and offering strategic tax solutions to enhance the financial health of your practice.
Corporate finance
Unlock growth potential with our corporate finance solutions. Whether you're seeking funding for expansion, evaluating investment opportunities, or navigating financial restructuring, we have the knowledge to drive your practice's financial success.
MNP Digital services
Embrace digital transformation with our MNP Digital services. From streamlining operations to enhancing your online presence, we provide tailored digital solutions to keep your veterinary practice at the forefront of industry trends.
Ready to take the next step?
Contact Tim Dawson, CPA, CA, for personalized assistance and to explore how MNP can be your trusted partner in navigating the dynamic veterinary market.
Tim Dawson CPA, CA
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