The hidden profit leaks in midlife veterinary practices

Originally published in OVMA Focus Magazine May/June 2026

BY GREG TONER

There’s a stage in almost every veterinary practice’s life where something feels off. The schedule is full, the team is larger than ever and the medicine is at its best. And yet, cash feels tight.

Owners in midlife practices (roughly three to eight years into ownership) often describe the same frustration: they’re busier than ever, but it doesn’t feel more profitable. This stage is not a failure. It’s a transition point—one where systems and discipline matter more than hustle. With the right adjustments, it can become the most financially rewarding phase of ownership.

Why midlife practices lose financial traction

COSTS RISE QUIETLY AND RELENTLESSLY. As practices mature, expenses expand in layers. Labour costs increase as teams grow, supply prices climb, and equipment, software, rent and insurance all rise. Each increase is modest on its own, but they compound year after year. Meanwhile, fee adjustments rarely keep pace. If operating costs rise five to seven per cent annually but fees increase only four to five per cent, you lose margin every year, and over three to five years, that gap becomes structural. The issue isn’t effort, it’s math.

HIRING WITHOUT A PLAN. Most midlife clinics add team members in response to stress. Hiring relieves immediate pressure, but without a strategy, payroll grows faster than production. Every new position should answer a simple question: How will this role generate or protect enough revenue to support itself and contribute to profit? If that connection isn’t clear, overheads expand while profitability stalls.

COMPLEXITY OUTGROWS SYSTEMS. More veterinarians, more technicians and more services are added, but systems often fail to evolve at the same pace. Treatment plans vary across DVMs, so charges are inconsistent. Inventory is managed by whoever notices something is low. Scheduling templates haven’t been updated since the practice had one doctor. When complexity increases without structure, profitability erodes. Not because the medicine is wrong, but because its value isn’t consistently captured.

OWNERS ONLY TAKE WHAT’S LEFT. Many owners of midlife practices still pay themselves whatever remains after expenses. A sustainable practice should generate fair-market compensation for the owner’s clinical and management work, plus a return on ownership. If it cannot, that’s a structural issue to solve, not to absorb.

Fix the leaks before raising fees

Fee increases are usually warranted, but they won’t fix revenue that’s never captured. Before adjusting your fee schedule, examine where margin is already escaping.

SCHEDULING INEFFICIENCIES. A fully booked calendar doesn’t guarantee a productive one. When every slot is the same length regardless of procedure, when high-value cases are squeezed between quick rechecks, and when DVMs wait between patients for rooms or records, you’re paying for clinical time that generates no revenue. Stagger technician appointments so veterinarians move between exams without dead time. Protect same-day urgent slots rather than double-booking. Recovering even two to three productive hours per DVM per week can translate into tens of thousands of dollars annually.

MISSED CHARGES AND DISCOUNTS. Soft write-offs such as rounded-down invoices, waived rechecks, courtesy discounts and unbilled materials are among the most invisible profit leaks in practice. Run a discount report: if total discounts exceed two to three per cent of gross revenue, establish a clear policy for who can authorize them and how they’re tracked.

TOO MUCH INVENTORY. Expired pharmaceuticals are revenue you purchased but never sold. Assign one team member clear ownership of inventory, conduct quarterly counts and manage returns. Tightening inventory management alone often frees one to two per cent of revenue.

Establish processes

Many midlife practices have processes that exist in name only—there’s a way things are supposed to be done, but in practice it varies by who’s working that day. Checkout procedures differ between receptionists. Surgical prep steps get abbreviated when the schedule is tight. Lab results sit in inboxes because follow-up responsibilities are unclear. The problem is rarely that staff don’t care. It’s that the process was never defined clearly enough to be followed consistently, or it was defined once and never reinforced.

Start by identifying the three or four workflows that have the greatest financial or clinical impact: treatment planning, discharge and invoicing, inventory ordering and client callbacks. For each one, document the expected steps plainly, so a new hire could follow them. Then review adherence quarterly as a team calibration exercise. A process that nobody follows isn’t a process, it’s a suggestion. And suggestions don’t protect margin.

Pricing for mature practices

Review fees at least annually (semi-annually is better). Raise fees selectively: increase more aggressively where you’re clearly below market, especially on high-volume services. Benchmark against provincial fee guides, identify the specific gaps and adjust those first. Communicate changes to your team, so they can discuss value with confidence. Keep in mind that fee guides are a provincial average of the cost of providing a service, based on a fully applied team and facility. Labour, drugs, supplies and labs total roughly 72 percent of the cost of running an average practice, and they all have similar costs across the province.

Funding the future

Profit isn’t selfish. Without margin, you can’t upgrade equipment, invest in your team, improve your facility or withstand a downturn. Define a fair salary for your clinical and leadership work, plus a target profit percentage that compensates you for the risk you carry.

Work with your accountant to model three to five financial scenarios for the next two to three years: status quo, targeted fee increases, a wellness plan, an additional associate or a major equipment investment. This turns abstract anxiety into concrete decisions and helps you prioritize where to start.

If your practice feels busy but not profitable, the answer is rarely more hustle. Pick two or three areas where you suspect the biggest gaps, commit to measuring them and act on them. With disciplined systems, thoughtful pricing and defined financial targets, a midlife clinic can move from busy and stretched to profitable and sustainable. The practice you built deserves to reward you fairly, and with focus, it will.

Greg Toner, CPA, CA, TEP, CLU, is principal at VetCPA.

Reprinted from the Ontario Veterinary Medical Association’s Focus magazine www.ovma.org