Considerations for Your Veterinary Construction Budget
Regardless whether you want to build a new office from the ground up or renovate your current veterinary clinic, you need to create your construction budget. While this can be a daunting task, there are tips to consider to make sure your budget is complete.
Before starting your construction project, you need a team – lender, architect, contractor and, of course, you as the owner. The construction team works together to make sure the project is successful and to help the owner make decisions. Crucial elements in financing construction projects include a sufficient budget, timelines of the build-out, and the quality and strength of the contractor and architect.
Questions to Ask Yourself
Work with your architect to establish a list of your wants vs. needs for your veterinary practice. Ask yourself these questions:
- What additional services will you be offering?
- What equipment will be required?
- How many exam rooms do you need now and in the future?
- What type and style of building do you want?
Your answers will help determine the design of your building and ultimately your budget.
The actual construction costs are not the only costs for your budget. Don’t forget to add in the architectural, electrical, mechanical, structural, and civil engineering costs. Choose a lender who is experienced in veterinarian construction projects to ensure your budget includes the necessary categories.
For ground-up builds, you will need to include the costs of the site acquisition and site development. Developing the site may include costs for grading, utilities, paving, stormwater management, and more.
For commercial real estate, determine if the property is properly zoned or if it needs to be subdivided. Are there timelines on zoning and permits? What fees must be paid? Many municipalities require money up front to review drawings, go through the planning process, and issue permits.
When establishing your veterinary construction budget, there are additional costs to include that don’t fall under the previous categories. These costs may vary depending on the provider but may include IT cabling, security system, phone service, cabinetry, office furniture, and equipment. Discuss your equipment needs with your lender and architect to be sure everything is included in your design and budget.
Meet with a Lender
Discuss your needs for a construction contingency budget with your lender. Contingency funds give you a buffer in the event that unforeseen issues arise or there are cost overruns. Working closely with your lender, architect, and contractor, or design/build firm, ensures you have an appropriate construction budget.
Once you have a list of the necessary items for your construction budget, how do you know what you can afford? A cash flow lender can help you examine revenue trends and your practice’s cash flow. They will check your revenue to see if funds are maxed out due to limited space, if upgrades are needed to keep up with your competitors, and what new services you will be able to offer.
By learning about your practice, examining the business financials and your personal credit history, the bank will determine how much debt the practice can reasonably support. You want your new veterinary practice space to increase business, not stress your cash flow. That’s why it is crucial to partner with a financial expert who understands both sides – veterinary construction and veterinary practice financing.
At LenDRgroup Consulting, we care about the long-term success of your practice. Whether you need services for practice financing or business consulting, we will create a customized plan to fit the unique needs of your practice and your career.
Our lending platform of 300+ dental and healthcare-specific lenders was developed with the purpose of helping dentists, veterinarians, and physicians. We want you to achieve your practice ownership goals while eliminating the obstacles associated with practice financing.
To date, we have helped hundreds of veterinary professionals launch, expand, and grow their practices. LenDRgroup Consulting understands your business needs and can help you avoid costly mistakes. So, let’s get started. Contact us today for a consultation.