VetCircle works with independently owned veterinary hospitals across Canada, and one of the most common questions we hear is: “How do i know if my veterinary clinic is actually profitable?” ManyCanadian practice owners rely on U.S.-based benchmarks because that’s what’s readily available. While some metrics translate well, many don’t, because Canadian clinics operate differently in a few key ways.
VetCircle supports nearly 300 practice owners across Canada. Through detailed financial, HR and workflow reviews, we’ve seen how benchmarks shift once you factor in Canadian wage structures, service pricing and how inventory is purchased, rebated and discounted. These differences directly impact margins and what healthy profitability realistically looks like for a Canadian veterinary clinic.
Below, we’ve outlined Canadian-specific benchmarks to help you assess whether your practice is financially healthy.
Revenue and Profitability
1. Revenue Growth (YOY): 8-12% +
2. EBITDA Margin: 15-22% +
3. New Clients: 100-200 per FTE DVM annually
Operational Efficiency
1. Payroll
Payroll is a veterinary hospital’s biggest expense, and it needs to be managed appropriately. Oftentimes when payroll is above benchmarks, it’s not about needing to terminate team members or cut down hours, it’s about imporving their workflow efficiency.
- DVM Costs: 18-21%
- Support Staff Costs (including manager): 16-20%
- Total Payroll Costs: 38-42%
2. DVM Production
We like to compare a DVM’s total production to their gross salary, to provide us with a clear way to evaluate a DVM’s productivity whether they work full-time or part-time.
A DVM should produce roughly 6 times their gross salary.
When a veterinarian consistently hits the 6x mark, it indicates:
- strong medical productivity
- efficient scheduling and appointment flow
- good delegation and use of support team members
If a DVM produces 6x their gross salary, their base salary works out to around 16–17% of production. That structure leaves room in the budget for the additional “burden” costs that come with employing a DVM, such as:
- extended health benefit premiums
- Licensing, dues and insurance
- professional memberships
- CE support and other perks
- Paid time off
The 6x benchmark ensures that the role is financially sustainable for the business, while still offering the DVM competitive compensation and benefits.
3. Revenue per Invoice
A DVM’s revenue per invoice (RPI) can vary widely depending on whether they perform surgeries, how many surgery days they have, or if they do surgery at all. Because of that variability, RPI is best looked at as a hospital-level average, not an individual DVM metric.
An average RPI between $185-$250 indicates strong client compliance, good medical care, and appropriately priced services. Practices consistently in this range are usually doing a good job of recommending and delivering the care their patients need, while also charging in a way that supports a healthy business.
4. Balanced Service Mix
A balanced mix of revenue coming from different areas helps to protect your practice if one area becomes less profitable or more expensive. Medical services help us cover payroll and overhead costs, while products and diagnostics add additional stability to our financials. Canadian practices often charge higher for services, to offset higher priced products compared to USA practices. Here are the benchmarks for a healthy service mix for a General Practice Veterinary Hospital
Professional Services: 55-65% of revenue including:
- Exams and consultations
- Surgeries and anesthesia
- Dentistry
- Diagnostics
- Treatments and Procedures
The remaining revenue typically comes from:
- Pharmacy and Injectables (15%-20%)
- Vaccines (5%-8%)
- Parasiticides (5%-10%)
- Diets and Nutrition (5%-10%)
These ranges will shift based on your case mix, how many surgery days you run, and whether you sell diets and preventatives in-clinic or online. Large gaps, when compared to these percentages, usually point to pricing, client compliance or workflow opportunities.
Inventory Management
1. Controlled COGS
Cost of Goods Sold (COGS) is a veterinary hospital’s second-largest expense after payroll. In Canada, clinics purchase medications, supplies, and products through only 1-2 distributors. That limited competition makes it harder to negotiate pricing, which is why Canadian practices often have higher COGS compared to U.S. hospitals.
A healthy target is COGS at 20–25% of revenue.
Ways independently owned Canadian clinics can reduce COGS:
- Join a group purchasing organization (like VetCircle) to access stronger supplier rebates
- Negotiate your lab agreement to maximize savings with the lab service you use most (reference or in-house)
- Shift diets and OTC sales to MyVetStore, to move those purchases off your shelves and into a lower-expense avenue
2. Top COGS Expenses
For most Canadian Veterinary Practices, here are the top costs in their COGS:
- 1 Drugs and Injectables (not including parasiticides or vaccines)
- 2 Reference and In-House Lab costs
- 3, #4 or #5 are dependent on the practice, and rotate between Parasiticides, Vaccines and Diets
If your numbers or workflows look different from the benchmarks outlined here and you want a clearer picture of what’s going on in your practice, VetCircle can help through our Practice Health Check Up.
Think of it like a wellness exam for your clinic. Just as pets often appear healthy until an exam uncovers an underlying issue, many practices have challenges that aren’t obvious day to day. Our team reviews and identifies what’s really driving your results, then clearly outlines the key issues and where to focus first.
The Practice Health Check Up includes:
- an HR review
- a workflow review
- a financial review
The process starts with a 30 minute one-on-one call to understand your goals and schedule the on-site visit. A VetCircle Operations team member will then spend a few hours in your clinic observing appointments, reception, treatment, surgery, and current workflows, while collecting key reports and documents. After our analysis, we’ll meet with you for a 1–1.5 hour presentation to walk through our findings and priority recommendations.
The cost is $1,800 + HST for non-members and complimentary for VetCircle members.
(Travel and accommodation fees apply for practices located more than 200 km from our Toronto office.)
If you want clarity on what’s working, what isn’t, and where to focus next, this is a great place to start!
