The Post-Pandemic Squeeze

The veterinary profession is at a crossroads. The rapid surge in demand for pet care during the pandemic—a time many dubbed the "puppy boom"—has slowed, leaving practice owners grappling with a vastly different reality. Inflation, rising labor costs, and skyrocketing expenses for supplies and real estate are squeezing practices from every angle. At the same time, clients, burdened by their own rising costs of living, are cutting back on spending, creating a challenging scenario that demands careful navigation.

The past few years brought unprecedented changes. Vertical integration within the veterinary supply chain has driven up interservice costs, from medications to diagnostic tools. The demand for higher wages to keep pace with inflation has added pressure to already tight budgets, leaving practice owners to make tough decisions about staffing and salaries. Simultaneously, the pandemic-fueled surge in pet ownership has leveled off.

Clients who once saw veterinary care as essential are now weighing the costs more heavily, with many finding themselves priced out of care. The result? Practices are seeing smaller profit margins and fewer clients willing or able to pay for comprehensive services.

One of the most concerning trends is the proliferation of new veterinary practices based on the perceived demand of the past four years. However, this surge was likely an anomaly, driven by the unique circumstances of the pandemic. Modeling new practices or business growth strategies on this period is a risky proposition, as the current market is returning to pre-pandemic levels.

The demand spike may have given the illusion of long-term growth, but the reality is that the market is now stabilizing, and the competition for clients is intensifying. Practices that overextend themselves by hiring more staff or expanding operations without fully assessing the new landscape may find themselves in trouble.

To combat shrinking profits, many practices feel pressured to increase the number of appointments while keeping service prices steady. While this might seem like a logical solution, it often leads to overworked staff, burnout, and high turnover rates—problems that only exacerbate the underlying issue. The reality is that this approach is unsustainable. Practices cannot continue to increase their workload without addressing the root causes of their financial struggles.

So, what’s the solution? It starts with effective budgeting and resisting the urge to overcorrect. Reassessing financials is critical—taking a hard look at your budget to identify areas where costs can be trimmed without compromising care quality or staff well-being. This may mean renegotiating supplier contracts, streamlining services, or reducing unnecessary expenses. Adding more doctors or staff may seem like an easy fix, but it often increases overhead without significantly boosting revenue. Instead, focusing on maximizing efficiency with your current team can be a more sustainable approach.

Monitoring the market and maintaining a 1-2 week schedule book can provide clarity on the evolving landscape. This measured approach helps avoid unnecessary financial strain, allowing practice owners to make informed decisions as the industry levels out. Educating clients about the value of preventive care and the costs associated with maintaining their pets’ health is another critical step. Building trust and transparency encourages clients to prioritize essential services, even during challenging economic times.

For practices in rural or underserved areas, the demand may still be high enough to justify hiring additional staff. However, for those in competitive urban or suburban markets, caution is key. Overextending in the hopes of recapturing pandemic-era growth could lead to greater financial and operational strain.

The post-pandemic era requires a shift back to fundamentals. Practices must focus on financial discipline, operational efficiency, and providing exceptional care within their means. While the current climate may feel uncertain, it also presents an opportunity to refine business practices and emerge stronger. By staying patient, budgeting effectively, and resisting the urge to chase unsustainable growth, veterinary practice owners can navigate these challenges and position themselves for long-term success. The road ahead may not be easy, but with the right strategy, the profession can thrive once again.