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Staying on top of rapidly changing trends can make a real difference in how well a veterinary practice adapts and thrives.
Some of the top trends expected to impact veterinary practices in the coming years include changes in revenues, insurance, and demographics. While demand for some services are expected to drop, others are on the rise, making for a mixed outlook.
Here’s what you need to know:
Visits to the Vet on the Decline
Veterinary services are a $2-billion a year industry in Canada. But over the past five years the industry has seen a decline in revenues, according to a recently released IBISWorld Market Research Report on Veterinary Services in Canada. Households are limiting veterinary visits in order to cut costs and ranchers are reducing herd sizes as demand for meat falls, lowering calls for veterinarians in the agricultural sector. Looking ahead to 2021, the trend continues, the result of factors that include more nutritious pet diets and more effective vaccines, leading to better animal health overall.
However, industry revenues are anticipated to rise at an annualized rate of 1.7 per cent, to 2.2 billion by 2021. This is due in part to growing pet owner awareness of the importance of routine care for their animal companions. Additionally, as Canada’s population ages, more people are becoming pet owners for the companionship they bring.
Pet Insurance More Common
According to the Canadian Veterinary Medical Association Pet Wellness Report, only 51 per cent of dog owners and 58 per cent of cat owners currently have pet health insurance. Those numbers are expected to increase over the next five years. Pet health insurance will become more common as pet owners attempt to mitigate higher veterinary costs. As a result, owners with pet insurance could be more likely to invest in higher cost treatments for pets, as well as potentially go to the vet more often, boosting industry revenue.
Salaries, Group Practices on the Rise
Demographics are another noteworthy trend. The current veterinary shortage means that veterinarians will command higher salaries in future, as a result of supply and demand.
Of those veterinarians who do not own their own practice, approximately two-thirds are employees, with earnings starting at an average of $70,000 per year out of school, net of benefits. The remaining one-third are associate veterinarians, earning approximately $100,000 – $120,000 per year. Total wages are expected rise at an annualized rate of 4.6 per cent over the next five years, to $1 billion in 2021.
Two-thirds of today’s practising veterinarians graduated in the 1970s or 1980s. Combine that with the fact more than 80 per cent of graduates from Canada’s five university veterinary programs are female, and another trend unfolds: individual veterinary clinic owners selling their practice to a group of three to four female veterinarians.
Keeping up with industry trends enables you to be proactive in your business decisions instead of reactive. MNP provides a full range of business advisory services to help you at every stage of your practice. Our professionals take the time to understand you and your business – and deliver personalized strategies that allow you to take advantage of emerging opportunities.
To learn more about how MNP can help, contact Tim Dawson, CPA, CA, Business Advisor at 780.451.4406 or
[email protected], or your local MNP Business Advisor.
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