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TDK conference 2013

Business plan of the establishing equine veterinary praxis
Marty Kinga - year 6
SzIU, Faculty of Veterinary Science, Department of State Veterinary Medicine and Agricultural Economics
Supervisor: Ózsvári László DVM


My paper discusses the economic and legal conditions, financing possibilities and business plan of starting an equine joint praxis with average service profile and equipment. To start an equine praxis as a business, one has to be aware of one’s objectives and possibilities. To make the adequate economic decisions in a given situation, one has to prepare a business plan covering all aspects. My work outlines the general market conditions, developments, growth potentials of the domestic equine population, then turns in more details to the legal conditions of starting an equine praxis.

I prepared a 5-year business plan for starting an equine joint praxis. To assess the incomes and expenses as well as the patient turnover, I carried out – by questionnaire via the Internet – a market survey and processed 75 meaningful answers. In the business plan, I drafted 3 scenarios for the 2014-2018 period: „A” optimistic, „B” realistic and „C” pessimistic. Regarding the realistic version, I also prepared a cash-flow analysis covering the first year.

For the start, I calculated with 5 treatments a day for version „A”, 4 for version „B” and 3 for version „C”. I assumed a 15% annual growth in patient numbers and subsequent incomes in case „A”, a 10% growth in case „B” and a 5% growth in case „C”. Thereby, by the end of the 5th year, incomes would grow from the initial HUF 31.2mn to HUF 54.6mn in case of the optimistic scenario, from HUF 25mn to HUF 36.5mn in case of the realistic and from HUF 18.7mn to HUF 22.7mn in case of the pessimistic scenario. Annual production costs consist of variable and fixed expenses. Fixed costs amounted to HUF 5.1mn annually in the case of all three scenarios, whereas variable costs grew from HUF 12.6mn to HUF 22.2mn in case „A”, from HUF 10.1mn to HUF 14.8mn in case „B” and from HUF 6.7mn to HUF 8.1mn in case „C”.

On the basis of capital investment analysis, costs are recovered already in the second year, and thereafter the praxis produces profit, in the case of the optimistic scenario. In the case of the realistic scenario, investments get returned in the third year, whereas in the pessimistic case in only the 4th year. The liquidity (cash-flow) analysis prepared for the 1st year of scenario „B” (realistic) reveals that the praxis needs a working capital of HUF 4.612.660 at the start to guarantee solvency.

Based on business plan data, one may conclude that starting an equine joint praxis becomes profitable relatively soon, and even in case of the pessimistic scenario investments return within 4 years. At the same time, it is worth starting a praxis only if one has the necessary capital and, on the basis of rough estimates, a required clientele.

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