Setting up an independent farm practice: advice and tips for success

It is one year on since my business partner Jenny Hull and I joined forces and set up Black Sheep Farm Health – a predominantly beef and sheep practice, based in Rothbury, Northumberland.

It took a lot of hard work to get it off the ground, but we had – and continue to have – the support of XLVets and its community of member practices, and this has massively eased the process of moving from employee to business owner. At a time when more vet practices are giving up their freedom of independence and conforming to corporate culture, we are doing it our way.

The start

After qualifying at the RVC, I took my first full-time vet job in 2016 at a practice that was, at the time, independent. My role was in mixed practice, but I quickly developed a preference for farm animal work.

From the beginning, I struck up a good relationship with one of my fellow vets, Jenny Hull. Soon after joining the practice, it was bought out; my role became increasingly small animal-biased and the new working conditions of corporate practice began to niggle us both.

So, we started to talk about what it might take to move towards setting up a farm practice – one that was independent and could be run the way we wanted.

I had only been working in practice for a year; however, the chance to set up in practice hardly ever comes up. Maybe it was a few years too early for me, but I had to say yes. I thought I’d kick myself if I didn’t.

So, how do you start up a new practice from scratch? Jenny and I both wrote down a list of all the things we thought we needed to do – then compared them and found they weren’t the same.

In need of some help and advice, Jenny contacted Andrew Curwen at XLVets, whom she already knew. He added more things to our lists. From there, we began working towards our goal. XLVets was instrumental in helping us along the way, providing practical advice, moral support and encouragement, and steering us towards those who could help us – which often were the other owners of practices in the network.

Finding the cash

One of the biggest hurdles for anyone setting up in independent practice is money. We estimated what we needed to get started and run a practice for three months.

We received several offers of financial assistance from various sources. But, in the end, wanting to have the full freedom of independence and be accountable only to ourselves, we didn’t accept any financial help. Instead, we found a grant that enabled us to get a contribution to some of our equipment costs. The one drawback with grants is you only get the money after you’ve bought the equipment, so it made cash flow a bit awkward. However, we found ways to work around this and arranged an overdraft as a back-up. Surprisingly, it proved quite difficult to get it. The bank couldn’t see why we needed one. But we wanted one set up in advance as a precaution, so as to avoid high emergency interest rates.

Although we put our savings into the start-up, we still needed more cash. After some searching, I found the Virgin start-up loan. This is a personal loan for business use – and it gets paid back via a standing order from the business.

Throughout all this, we had back-up from XLVets: in reviewing the cash flow and application for the grant, and again for another cash flow we needed for the start-up loan. We needed another cash flow – tailored slightly differently – to get the bank overdraft.

Legal and insurance issues

Good business can sometimes require good professional advice. XLVets helped us out here, running our employment contracts past solicitors, and supporting us to get professional legal guidance on what we could and could not do. For instance, one of the legal restrictions we have to abide by is we cannot solicit our old clients.

After handing in my notice, I spent months doing locum work. My evenings were spent working on the new business: I’d taken on responsibility for purchasing and insurance. A lot of different insurances are needed when setting up in practice: not just for vehicles, but professional indemnity, building and contents insurance, and personal injury. It’s also advisable to insure the partnership, as a precaution against, for instance, an injury that forces retirement.

Getting going

When it came to naming our new business, we didn’t want to be area-specific and limit ourselves. We decided on Black Sheep – which was something of an in-joke between us. We then debated whether to call ourselves Black Sheep Farm Health or Farm Vets. Since most of our work is proactive veterinary care, we decided ”health” was a better word.

To be able to offer a good service, or at least as good as our competitors, we needed to be able to have at least two vets on call – so at least three in the team. We took on a graduate we already knew, Kaz Strycharczyk, who joined us soon after we started trading.

We chose premises on an industrial estate on the outskirts of Rothbury, with parking. Farmers can easily drop into pick up medicines here. We have a small lab with a microscope, autoclave and centrifuge, plus a second-hand IDEXX blood machine off eBay. Being able to purchase medicines at competitive rates is vital for the profitability of any veterinary practice.

Prior to leaving our old practice, neither of us had any experience of negotiating with suppliers, and, as a new practice with no clients, we had no buying power, either. This was where the benefits of being part of a member organisation really came to the fore. The XLVets organisation has more than 50 independent practice members – so, collectively, has buying power.

The first decision was choosing a wholesaler – a key question was ”how long can we not pay the bill for?”

Marketing

Since we must not solicit, and farmers must come to us of their own accord, marketing is important.

We created a practice website, Twitter account and Facebook page; we also advertised our new practice in the local newspaper. It only takes a few people to know about you and news spreads by word of mouth, too.

It took around six months to arrange funding for the business and get ourselves organised with premises, vehicles, equipment, website and the like, and we opened for business on 8 January 2018.

By the end of that month we had gained our first 30 clients and, by December, we had taken on our 100th. We continue to keep a chart of all new clients, with the date they joined and how they approached us, as proof we are not soliciting.

Proactivity

Black Sheep Farm Health is a farm-only vet practice, and our clients are predominantly beef and sheep farmers. Traditionally, these are farms that engage the least with their vet and veterinary services.

However, we’ve drawn up health plans with all of them, and they pay us a monthly fee. This is good for their and our cash flow. It also means if they have a sick sheep they are more likely to call us than shoot it. We are also very proactive. Kaz has created a calendar that prompts us to ring clients at key times of the year to push them to consider bull testing or tup testing. For those with a history of twin-lamb disease, we contact them to come to blood sample ewes for metabolic profiling.

One year on

After one year of trading, Black Sheep Farm Health has become a three-partner practice with a team of six: four vets and two administrators.

Our first-year turnover was 15% higher than our original target, everyone is getting paid and we’ve never needed our overdraft facility. All the effort we put in at the start has been worth it.

Looking back, the biggest challenges were making the initial leap to leave a secure job then knowing where to start in setting up in business. Having the practical support from XLVets helped ease the process and we moved faster than we would have done otherwise.

We are enjoying our independence, but we are not alone in our business. As an XLVets member, we continue to receive support to help us run a successful business and then there is the extensive network of independent practices that also support us in different ways, whether it’s simply a telephone call for help on our management system or to collaborate on a clinical issue. We also have access to online forums that forewarn us of product shortages and disease trends, and on which topics are aired, and advice sought and given.

With the practice up and running, I’m enjoying being a farm-only vet, and having the flexibility and freedom of working within an independent business. As we head into our second spring, we have three times more clients and the number of livestock under our care. We are going to be busy.