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TDK conference 2013

Business plan for the establishment an exotic small animal clinic
Botond Ádám - year 6
SzIU, Faculty of Veterinary Science, Department of State Veterinary Medicine and Agricultural Economics
Supervisor: Ózsvári László DVM


The number of exotic pets keeps increasing in Hungary as well, therefore the aim of my paper was the preparation of a business plan for a veterinary clinic for small pets that would mainly base its services on exotic patients, in addition to the regular cat and dog patients. I collected my data between the spring of 2012 and the spring of 2013, during which I conducted in-depth interviews with the vets of an exotic pet clinic, the staff of the Exotic Division of the Department of Interior Medicine of SZIE-ÁOTK (Faculty of Veterinary Science, Szent István University), distributors of medicinal products for animals and financial professionals.

I plan to open the exotic pet clinic in downtown Budapest, in a property of 100 nm2 in need of reconstruction, with medium level veterinary equipment. When defining the required start-up capital, I estimated the costs for six months of medicine supplies, vaccines, antiparasitics, disinfectants, bandages and the devices for treatment and operations. The required start-up capital for the practice is a total of HUF 24.68 million, of that HUF 22.76 million would be spent on durable assets and HUF 1.92 million on current assets. My own capital available for the start of the enterprise is about HUF 8 million, I want to cover the rest from Small Enterprise Loan of MFB.

I have prepared the business plan for the clinic for the time horizons of 5 and 10 years, with 3 - pessimistic, realistic and optimistic - scenarios, in my calculations I presumed that the ratio between canine, feline versus exotic patients will remain 50% each all the time. In the plan I estimated the annual expected patient turnover, revenues, costs, and based on these, the earnings of the practice. I have prepared the cash flow plan for the first year, in monthly breakdown, the break-even calculation, furthermore, the capital investment analyses (net present value, cost/benefit ratio, internal rate of return) for the 3 different scenarios.

In the case of the realistic scenario - assuming an increase of annual turnover of 17% on average - the estimated annual revenue of the practice was HUF 9.75 million in the first year, HUF 18.27 million in the fifth year, HUF 40.06 million by the 10th year, and it registers a profit in the first year already: the planned after-tax earnings is HUF 2.22 million, which will have grown to HUF 16.86 million by the 10th year. The break-even point means 492 animal patients brought in during one year, which will be accomplished even in the pessimistic scenario. The capital investment analyses show that - in the realistic scenario - the enterprise will have recover the investment costs only in the 7th year, however, in the pessimistic scenario the enterprise should not be started at all. Presuming an optimistic patient turnover and revenues, starting the enterprise can certainly be recommended.

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