The BVA has expressed concern over a survey demonstrating more than half of responding vet practices had below average profitability, while 15% generated “a negative value for net profit”.
Figures from the first SPVS Profitability Survey showed a total of 54.5% of responding practices scored “below average” or “poor” on its profit-rating scale.
The SPVS, working in conjunction with Veterinary Insights, based its snapshot figures on survey returns from 9 mixed animal, 4 equine and 88 small animal practices. The practices included 96 independent businesses and 5 joint-venture practices.
Key figures
Practice turnover ranged from more than £10 million to less than £100,000.
Net profit was assessed as:
- greater than 18% – “excellent”
- 15% to 18% – “good”
- 12% to 15% – “average”
- 8 to 12% – “below average”
- below 8% – “poor”
Revenue per vet (full-time equivalent):
- maximum – £776,000
- upper quartile – £254,839
- median – £214,214
- lower quartile – £180,041
- minimum – £51,000
Earnings per vet:
- maximum – £100,000
- upper quartile – £52,651
- median – £45,000
- lower quartile – £38,111
- minimum – £17,000
Almost a third of practices (30.3%) scored “excellent” or “good” and 15.2% scored “average”. However, 54.5% were “below average” or “poor”.
Negative value
The median profit level for all practices was 10.6% and 15% of all practices generated a negative value for net profit.
The survey looked at five parameters:
- transaction volume index – a measure of “busy-ness”
- cost of drugs and supplies as percentage of turnover
- cost of all people as percentage of turnover
- establishment and overhead expenses as percentage of turnover
- net profit margin (after owner’s remuneration) as percentage of turnover
Economic challenge
Responding to the figures, BVA junior vice-president Gudrun Ravetz said: “Although this is a small survey, the figures that suggest more than a half of practices have below average profitability, and 15% have negative profitability, are a concern.
“One of Vet Futures’ ambitions is for ‘thriving, innovative, user-focused businesses’ and it is vital veterinary practices have a sustainable, profitable future so vets can continue to care for and protect the health and welfare of animals.”
- Read the full article in the 19 September edition of Veterinary Times.
- The SPVS Profitability Survey is available to all practices.
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2 Comments on "BVA concern at low profits in most practices"
What factors were used to define Net Profit. All costs including owner salary subtracted from gross revenue? Or was the owner’s salary included in Net Profit? Was rent properly accounted for if it is an owner owned building?
Hi Allen,
We’re afraid these are questions we cannot answer. For more details of the SPVS Profitability Survey, please contact the SPVS office at office@spvs.org.uk