As summer winds down, many practice owners and managers begin to shift their focus toward the year ahead. October offers a strategic window—far enough from holiday chaos but close enough to year-end—to pause, assess, and lay the groundwork for a successful 2026. Budgeting, though often met with groans or delegated without much thought, can be one of the most powerful leadership tools we have in Veterinary medicine. Done right, it reflects our priorities, tells our team where we’re headed, and helps ensure we’re building a business that can sustain our people, patients, and personal goals.
Why Budgeting Gets a Bad Rap
Let’s be honest: budgeting doesn’t inspire most veterinarians the way a surgical success or a grateful client might. Many of us entered this field to help animals—not to fiddle with spreadsheets. But when budgeting is framed solely as an accounting task, it misses its deeper value: strategic clarity.
A well-built budget isn’t just about controlling expenses—it’s about unlocking potential. It lets us say yes to the right things: an overdue team raise, a new ultrasound machine, or finally upgrading that decade-old practice management software. But it also helps us confidently say no when opportunities don’t align with our goals or values.
Start with Vision, Not Numbers
Before diving into line items, spend time reflecting on your vision for the practice. Where do you want to be this time next year? What kind of leader do you want to be? What kind of culture are you trying to build?
Let these questions guide your budget priorities:
- Do you need to invest in leadership training to support new, or seasoned, leaders (we might be included in this as owners)?
- Are you aiming for double-digit revenue growth through marketing or service expansion?
- Is your facility due for maintenance, upgrades, or expansion?
- Do you want to reduce team turnover by improving compensation or benefits?
When you start with strategy, the numbers follow with purpose.
Build the Core Budget Framework
A strategic Veterinary budget generally includes projections and goals for the following categories:
- Revenue Projections
- Forecast by service category (wellness, surgery, diagnostics, boarding, etc.).
- Factor in seasonality and any upcoming changes in DVM capacity or pricing.
- Cost of Goods Sold (COGS)
- The national average is about 28%, with well-managed hospitals getting closer to 20% in general small animal practices. (it’s lower in Urgent Care, higher in mixed and large animal.)
- Plan for adjustments in vendor pricing or supply chain disruptions.
- Payroll and Benefits
- Usually the largest expense with national averages between 45% and 50% (depending on the study). Well run hospitals shoot for somewhere between 38%-42%.
- Include planned raises, bonuses, new hires, taxes, and benefits.
- Fixed Overhead
- Rent, utilities, insurance, software subscriptions, maintenance.
- Variable Operating Expenses
- Marketing, CE, uniforms, client snacks, community outreach.
- Capital Expenditures
- Major purchases or facility improvements—budget separately.
- Profit Targets
- Set EBITDA goals and use benchmarks to stay aligned with industry norms.
Don’t Budget Alone
Budgeting should be a collaborative leadership function—not a solitary owner exercise. Involve key team members like your practice manager, lead technician, or department heads.
When they help shape the budget, they’re more likely to own its execution. You may also discover blind spots or ideas you hadn’t considered—like a technician who knows how to reduce waste or a CSR who can suggest improvements to the client experience.
Build In Flexibility
No budget survives first contact with the real world exactly as planned. Build in contingencies—like a 3%–5% flex fund—for unplanned repairs, emergency hires, or equipment failures.
Track monthly progress against the budget and revise quarterly if needed. A living budget helps you adapt while staying anchored to your goals.
Budgeting as a Leadership Tool
Perhaps most importantly, budgeting is a way to demonstrate leadership. When your team sees that the business has direction, intention, and structure, they feel safer and more engaged.
When you connect the dots—“We’re increasing our CE budget for all staff members because we believe in your growth”—you create trust. And when you follow through— “We hit our revenue goals, managed our profit responsibility, so we’re going to be able to . . .” (fill in the blank based on what’s most relevant in your hospital), you build loyalty.