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Be SMART About Developing New Profit Centers

Brenda Tassava, CVPM, CVJ, VLCE, VetSupport, New Orleans, Louisiana

June 2018|Peer Reviewed

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Be SMART About Developing New Profit Centers

Veterinary practices that want to grow should think about the adage, “Insanity is doing the same thing over and over again but expecting different results.”1 Growth cannot be achieved by simply repeating the same process; to grow, practices must find new and different ways to do things (eg, updating practice processes to save time and improve efficiency, enhancing the client experience). One proven way to grow the practice is to start a new profit center (ie, a veterinary service area or category of services specific to one area of care [eg, surgery, dentistry, behavior]). (See Benchmarks.)

New veterinary profit centers can create positive change (eg, revenue growth, new client acquisition) and even fulfill a practice’s mission, but the practice must first set goals before moving ahead. Taking a practical, SMART approach to the selection and development of a new profit center is key.

The acronym SMART (ie, Specific, Measurable, Attainable, Relevant, Timely) is widely used in connection with goal-setting.2

Veterinary practices should engage in strategic planning annually to set goals. Practice leaders should reflect on how the practice is doing, where it may be headed, and what needs to be done to reach its goals. This often leads to a discussion about the services clients and patients may need, coupled with the team’s professional growth aspirations. For example, a veterinary practice that is seeing an increasing number of puppies and young adult dogs and whose veterinarians and other team members have a deep interest in canine behavior and socialization may decide to focus on behavior as a profit center. The goal would be included in the strategic planning session and SMART goals specific to a new behavior profit center would be developed.


Review the practice’s strengths and weaknesses, as well as community needs, to evaluate the success of the proposed new profit center. For example, if adding behavior evaluations is being considered, experts may need to be hired, which will affect profitability. Look at the new center’s viability by studying the community and asking questions such as, Does adding behavior services make sense for the pet owners? and Is this a service that can be supported by a growing need (ie, the pet population)? Use the free online zip code Tapestry tool to learn more about the community.


Measuring progress is important. A new profit center is a fresh start with no historical data, so consider how the center’s success can be measured. After the new center is launched, establish a baseline, and then monitor the center’s growth monthly.

Calculate the following metrics for the profit center:

  • Gross revenue
  • Number of patients that will receive the new service(s) or product(s)
  • Number of transactions that will include the new service(s) or product(s). A transaction is any line item dispensed or delivered within a given profit center. A patient may receive multiple line items within the center, but the number of transactions for each service and product will be what is measured.
  • Return on investment (ROI) (ie, determining the break-even point of a new piece of equipment purchased or other investments made for the profit center)
  • Net income (ie, gross revenue – direct expenses)

These examples are specific and measurable and allow a practice owner or manager to monitor the new profit center’s performance. Choose a metric that is reliable and simple. If the metric is too difficult, performance likely will not be measured, and services or products that are not performing well will not be caught early enough for changes to be made. Using the behavior profit center example, good metrics would include total gross revenue from the behavior services category and the number of patients receiving an initial behavior consultation.

New Profit Centers

In the last 2 years, Well-Managed Practices have added these new profit centers:

  • Laser therapy: 21%
  • Digital radiography: 16% 
  • Acupuncture: 13%
  • Ultrasound: 12%

In the next 2 years, the practices are considering adding:

  • Rehabilitation: 10%
  • Preventive care plans: 10%

SOURCE: Benchmarks 2017: A Study of Well-Managed Practices. Columbus, OH: WMPB; 2017:65.


The goals for the new profit center (eg, growth, ROI) must be realistic. For example, in the next 2 years, 10% of Well-Managed Practices (see Benchmarks) are considering adding rehabilitation as a new profit center. If the new center is expected to account for 5% overall revenue growth to the practice, is that attainable?

For example, for a practice that generated $1 million in annual revenue, 5% growth would be $50 000. Consider the number of patients the new rehabilitation center would serve and calculate the fees needed to achieve $50 000 in a year. Determine if that is realistic before moving forward.

Answer these questions before the center is launched:

  • Does the practice have enough active patients that may benefit from rehabilitation services?
  • Has the practice been referring patients elsewhere for rehabilitation? 
  • If so, how many patients have been referred over the past 12 months?
  • How much practice space will be required to support the rehabilitation services? 
  • Is this space available without limiting other profit centers?
  • Will more team members be needed? If so, how many, and at what cost?


A new practice profit center will impact the entire veterinary team. Team members will need to understand why the addition is being made so they get behind it and recommend it to clients. Look to the practice’s mission statement—if the new profit center can be tied to the practice’s mission, it is indeed relevant.

For example, if the new center will provide rehabilitation services and the practice’s mission statement includes providing a better quality of life to geriatric patients and patients recovering from major surgical procedures, the new profit center is relevant. Explaining the relevance to the team will go a long way toward the overall success of any profit center because team members will understand the reason for it and become advocates for the new services being delivered.


Timelines must be attached to the new center’s performance goals to measure progress at specific time intervals. Follow-through at specific intervals is equally important. When the chosen metrics are reviewed, trends will be revealed and shifts or changes (eg, a new marketing approach, changing team member–client communication methods) can be made to get the new profit center back on track if results are not matching goals.


Creating and launching a new profit center can be an exciting time; however, always have a larger plan in mind (eg, continued growth, increased revenue). Carve out time for strategic planning in the practice every year to study a new idea’s plusses and minuses before going forward with a plan that may not be in the practice’s best interest.

Do the research first to choose a new service or product that will work for the practice and the community, and then be SMART about setting goals, reviewing those goals, choosing a metric to set fees and determine potential profitability, and ensuring the veterinary team buys into the reason for the new center.

1 Follow the SMART steps to choose a new profit center and its goals wisely and help ensure the center’s success.

2 Cultivate team buy-in by creating excitement about the new profit center and demonstrating what it will mean for patients, clients, team members, and the practice.

Resource & References

For global readers, a calculator to convert laboratory values, dosages, and other measurements to SI units can be found here.

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