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Description
In January 2002 the author was approached by a group of veterinary specialists (Bay Area Veterinary Specialists [BAVS]) considering the option of leaving their leased space in a hospital in the San Francisco East Bay Area (Bay Area Veterinary Emergency Clinic [BAVEC]) to establish a nearby competing specialty practice of their own. As an entrepreneur and emergency veterinarian, the author was interested in their offer to develop a new emergency service in association with their new practice. In order to objectively evaluate this opportunity and to compare it to other potential opportunities, the author embarked upon a marketing analysis of veterinary emergency services throughout the entire San Francisco Bay Area. This analysis revealed that the Bay Area is already well served by emergency services and that there appears to be little opportunity for new entrants. Among existing emergency hospitals that might be available for sale, BAVEC appeared to be an attractive acquisition candidate. Market research also revealed that the development of a new facility in parallel competition with BAVEC would have a low likelihood of profitability. As a result, the author declined BAVS' offer to start an emergency practice with them in a new facility and instead suggested attempting to purchase BA VEC together, which would avoid "dividing the pie." Although this strategy appeared to offer significant benefits for all parties, negotiations were ultimately unsuccessful. Nonetheless, this analysis was invaluable in developing an understanding of the market for veterinary emergency services in the Bay Area. The author intends to continue to monitor this market and suspects that other opportunities will present themselves in the future.
