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My brother was a veterinarian who bought an existing clinic in 2008. As I recall it was close to a million dollars before the cost of the building. There was an

by dhosek 2y ago

My brother was a veterinarian who bought an existing clinic in 2008. As I recall it was close to a million dollars before the cost of the building. There was another 2–300K in capital costs for modernizing the clinic. So, yes, it can cost a lot to start a vet clinic. Many younger vets will do housecall practices, which do have lower startup costs, but it’s necessary to have a good relationship with a practice with a hospital for any procedures which need to be done and, given that they’re nominally in competition with those practices, this may not be the easiest thing to do (before buying the hospital, my brother did housecall work, but mostly outside the service area of the hospital that he used for his procedures. He also was their on-call fill-in vet for when the in-practice vets were on vacation or out sick). There was a kind of standard progression in veterinary careers where owning or being a partner in a practice with a hospital/clinic was the end stop of the career, but remember that a practice run by PE has different goals than a practice run by a vet. The vet-owner is looking to have junior vets who will one day buy them out and finance their retirement. Very different from a PE-owner looking to maximize cashflow and profitability with little concern about the vets working at the practice who are viewed as fungible widgets.

mattmaroon 2y ago
I do understand what you’re saying, I just think it’s a problem that’s at least self-limiting. A million dollars is not a lot to start a business of that scale. You can’t open a steakhouse in any mid-sized city for that much, and vet clinics actually make money. You don’t see PE firms buying up restaurants. If PE firms are buying them the ROI is clearly very good. If vets are really fretting, I’m sure a bunch of highly educated, high salary people in a very lucrative field can drum up a million bucks.
- mattmaroon 2y ago
  Also, he bought an existing clinic which, if already successful, has business value. It generally costs more to buy a successful business than to start one, though that’s not an ironclad law.
- 1propionyl 2y ago
  > You don’t see PE firms buying up restaurants. c.f. the 2-5 "restaurant groups" in every midsized city with a portfolio of "concepts" who open up a new one just as the one from last year starts to get stale and lose momentum. The ones that always seem to have absolutely exorbitant interior design budgets. Where exactly do you think their funding is coming from?
  - mattmaroon 2y ago
    I work in the food industry now. The answer believe it or not is usually private investors who really love food and think it would be really cool to own a restaurant. You can easily start a small restaurant with what is a small investment to a few wealthy people. 1 million or two just ain’t much these days. That’s actually why it is an unprofitable business, the people who do it aren’t really doing it for money. Supply outstrips demand which pushes prices down.
- infecto 2y ago
  I struggle with this same line of thought. I get it, there are sometimes bad outcomes with PE but same goes for any business. If this is so lucrative that PE is rolling up businesses, surely there are margins to be made starting up your own practice.
- nitwit005 2y ago
  > You don’t see PE firms buying up restaurants. They do, just usually restaurant chains.
- ceejayoz 2y ago
  > You don’t see PE firms buying up restaurants. Huh? The chain restaurant space is chock full of this. https://www.cnn.com/2023/08/24/investing/subway-sale-roark/index.html https://www.cnn.com/2023/08/24/investing/subway-sale-roark/i... " Roark holds investments in a number of large restaurant chains, including Arby’s, Auntie Anne’s, Buffalo Wild Wings, Carvel and Sonic, among others." "Roark’s deal is one of the biggest acquisitions in fast food history, coming in just under Inspire Brands’ $11.3 billion purchase of Dunkin’ in October 2020. Roark owns Inspire, which also operates Subway rival Jimmy John’s." Subway alone is twenty thousand restaurants.
IAmGraydon 2y ago
>My brother was a veterinarian who bought an existing clinic in 2008. As I recall it was close to a million dollars before the cost of the building. Are you saying he bought the building/assets of a defunct vet practice or that he bought an operating veterinary clinic?
WorkerBee28474 2y ago
> My brother was a veterinarian who bought an existing clinic in 2008. As I recall it was close to a million dollars before the cost of the building. There was another 2–300K in capital costs for modernizing the clinic. While this may be true, if anyone is reading this and thinking "that sounds like so much", remember that it is very easy for vets to get very large loans that they can pay back over a long time. The actual amount of money that needs to come from the vet's own pocket could be close to $0.
- mattmaroon 2y ago
  This is true precisely because of the reasons PE firms want to buy them. They’re a relatively high ROI investment in a stable and fast growing market staffed largely by high paid, educated people. It’s a slam dunk of a business.

by dhosek 2y ago

mattmaroon 2y ago

I do understand what you’re saying, I just think it’s a problem that’s at least self-limiting. A million dollars is not a lot to start a business of that scale. You can’t open a steakhouse in any mid-sized city for that much, and vet clinics actually make money. You don’t see PE firms buying up restaurants. If PE firms are buying them the ROI is clearly very good. If vets are really fretting, I’m sure a bunch of highly educated, high salary people in a very lucrative field can drum up a million bucks.

mattmaroon 2y ago
Also, he bought an existing clinic which, if already successful, has business value. It generally costs more to buy a successful business than to start one, though that’s not an ironclad law.
1propionyl 2y ago
> You don’t see PE firms buying up restaurants. c.f. the 2-5 "restaurant groups" in every midsized city with a portfolio of "concepts" who open up a new one just as the one from last year starts to get stale and lose momentum. The ones that always seem to have absolutely exorbitant interior design budgets. Where exactly do you think their funding is coming from?
- mattmaroon 2y ago
  I work in the food industry now. The answer believe it or not is usually private investors who really love food and think it would be really cool to own a restaurant. You can easily start a small restaurant with what is a small investment to a few wealthy people. 1 million or two just ain’t much these days. That’s actually why it is an unprofitable business, the people who do it aren’t really doing it for money. Supply outstrips demand which pushes prices down.
infecto 2y ago
I struggle with this same line of thought. I get it, there are sometimes bad outcomes with PE but same goes for any business. If this is so lucrative that PE is rolling up businesses, surely there are margins to be made starting up your own practice.
nitwit005 2y ago
> You don’t see PE firms buying up restaurants. They do, just usually restaurant chains.
ceejayoz 2y ago
> You don’t see PE firms buying up restaurants. Huh? The chain restaurant space is chock full of this. https://www.cnn.com/2023/08/24/investing/subway-sale-roark/index.html https://www.cnn.com/2023/08/24/investing/subway-sale-roark/i... " Roark holds investments in a number of large restaurant chains, including Arby’s, Auntie Anne’s, Buffalo Wild Wings, Carvel and Sonic, among others." "Roark’s deal is one of the biggest acquisitions in fast food history, coming in just under Inspire Brands’ $11.3 billion purchase of Dunkin’ in October 2020. Roark owns Inspire, which also operates Subway rival Jimmy John’s." Subway alone is twenty thousand restaurants.

IAmGraydon 2y ago

>My brother was a veterinarian who bought an existing clinic in 2008. As I recall it was close to a million dollars before the cost of the building. Are you saying he bought the building/assets of a defunct vet practice or that he bought an operating veterinary clinic?

WorkerBee28474 2y ago

> My brother was a veterinarian who bought an existing clinic in 2008. As I recall it was close to a million dollars before the cost of the building. There was another 2–300K in capital costs for modernizing the clinic. While this may be true, if anyone is reading this and thinking "that sounds like so much", remember that it is very easy for vets to get very large loans that they can pay back over a long time. The actual amount of money that needs to come from the vet's own pocket could be close to $0.

mattmaroon 2y ago
This is true precisely because of the reasons PE firms want to buy them. They’re a relatively high ROI investment in a stable and fast growing market staffed largely by high paid, educated people. It’s a slam dunk of a business.