President Donald Trump’s tariff plans have started taking effect. These import taxes will impact nearly all sectors of the US economy—including veterinary medicine.
Here’s how practice owners can wade through the noise and protect their bottom line.
Rising Costs
Veterinary practices often rely on imported medical supplies, equipment, and pharmaceuticals. Anytime broad-based tariffs are proposed, these essential items may see price hikes— particularly those sourced from China, Canada, and Mexico.
These increased expenses can strain practice budgets and potentially lead to higher service fees for clients. And it’s not just that. When operating costs go up, the practice’s core profitability can be strained. Generally, this sort of strain or unpredictability can make the practice less attractive to potential buyers and lower its overall valuation.
Strategies for Mitigating Effects
For DVMs looking to sell or transition their veterinary practice, recognize how tariffs might influence your valuation. Being proactive in managing these challenges is essential to maintain and enhance practice value.
- Optimize inventory management. Implement efficient inventory practices to reduce waste and manage costs effectively. This includes bulk purchasing of essential items before any price increases take effect.
- Financial planning. Work with a specialized advisor to conduct thorough financial analyses. This can help you wrap your mind around the impact of increased costs on your practice. Adjust pricing strategies accordingly to preserve profit margins without alienating clients.
- Enhance operational efficiency. Streamline operations to reduce overhead costs. This might involve adopting new technologies or optimizing staff workflows to improve productivity.
What’s Next
Any time tariffs enter the conversation, they can present unforeseen challenges for veterinary practice owners, particularly those considering a sale or transition. By understanding impacts and implementing strategic measures, DVMs can protect their practice’s financial health and optimize practice value. Stay informed and proactive. That’s key.
While we don’t know yet what the longer-term ramifications are regarding these broad-based tariff proposals, this type of news can be complex to navigate. We’re here to help. Book a consultation with us today to ensure your practice is prepared for the potential impacts of these tariffs.
