What is in this article?:
Smart financial decisions aren’t always about the lowest interest rate. Veterinarians should factor in relationships, community support and an understanding of agriculture.
Debt can seem like a burden, but for veterinary practice owners it can also mean starting their own business, expanding the operation and obtaining critical equipment or facility upgrades.
At every stage of a veterinary career—from new graduates to established practices—acquiring and paying off debt is a constant companion. So why not choose a companion that can help build and grow the clinic?
Livestock veterinarians are at a rare crossroads between production agriculture and business. Partnering with institutions that know the unique challenges of both industries can help a practice start out strong and continue to flourish.
Choosing a Lender
Bruning State Bank in Bruning, NE, knows the importance of having a range of businesses to serve its communities, including veterinarians.
“We are seeing fewer veterinarians in the large animal business,” says Fred D. Bruning, president of the bank, which started in 1891 with his great grandfather. “More people are doing small animal focuses and moving to an urban area. It’s harder to get young people in the large animal business because of the wear and tear on the body and less livestock in the area. Then, specialization in hogs and dairy has eliminated lots of producers.”
Bruning sees this trend as a reason for new and established veterinarians to work with other business in their communities, helping each other grow and succeed beyond simply good interest rate terms and healthy credit lines.
“I view the veterinarian as part of that triage of mentors, along with a farmer or rancher’s banker and nutritionist,” he says. “When a veterinarian comes to an area to start a business, he needs to have a business plan or model that he wants to take to several bankers. He should ask himself: Who’s going to be there during the times when it’s not going to be good? Who’s going to refer his customers to me, who trusts, asks questions, gives me vision? Who are the community leaders that I need to see? Now, I can talk about the interest rate and terms, and you can compare that with all lenders, but which guy is going to help me get started relationship-wise? Is it worth saving $1,000 in interest to sacrifice $10,000 in advice, relationships and referrals?”
For one of Bruning State Bank’s customers, investing in the community he operates in was nearly as important as any other financial factor, says Larry L. Coleman, DVM, owner of Veterinary Care & Consultation in Broken Bow, NE.
“My local bank is very connected in the community and is the bank for a number of my clients,” Dr. Coleman says. “It’s an ecosystem where everyone’s interrelated, if not financially, at least our lives intertwine in what we do.”
He attributes his success as a veterinarian and a small business owner to mentors in both areas.
“If you’re going to go into business, work to teach yourself the business basics or find a mentor,” Dr. Coleman says. “There’s a lot that could go wrong. I think it’s really important to be connected to an older person that has been through a lot of these things. They can shorten the time dramatically that it can take to get up to speed on how business cycles work.”
Growing up on a farm himself, buying and selling livestock helped Dr. Coleman earn the collateral to start his own practice more than 25 years ago. Later, the decision to take out an additional loan helped fuel his practice expansion and helped him provide jobs in the community.
“My banker is very knowledgeable,” he notes. “He’s involved personally in a lot of the things I do. When I go to conduct my business, we often have conversations that revolve around mutual challenges or opportunities. I value relationships highly. I suspect I could have cheaper interest rates, but that would require involving people that don’t know what I do, my reputation, and I don’t think I’d get the value out of it.”
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A partnership that can help make introductions to new customers and solve challenges collaboratively is what a veterinarian would expect of his own customers, says Bruning, who owns a herd of Hereford-Angus cross cattle.
As part of that partnership, Bruning recommends letting lenders in on the long-term business plan. It can help prepare both parties to make quicker decisions down the road when opportunities pop up.
“Even if you think about expanding a year from now, it’s good to think about it today because bankers don’t like surprises,” he says. “The worst thing you could do is call up your banker and say, ‘The sale is tomorrow, I need a loan tomorrow.’”