The order matters more than the list
Most new-practice checklists are alphabetical. Reality is sequential: each decision constrains the next one. Here is the sequence that avoids re-work.
1. Entity and tax structure
Before a single dollar moves, decide how the business is organized and how it will be taxed. This determines whether you take a salary, a draw, or both; how self-employment tax applies; what filings you owe and when. Changing it later is possible but rarely free, and mid-year changes complicate payroll and reporting.
2. Federal and state registrations
Employer identification number, state registration, state tax accounts for withholding and unemployment. These have to exist before you can legally run payroll — and they take longer than founders expect.
3. Separate banking, from day one
A dedicated operating account and a dedicated card. Not "mostly separate." Commingled accounts in year one are the reason year-three financing conversations go badly.
4. Bookkeeping before revenue
Set up the chart of accounts before transactions start, not after a year of them. A veterinary chart of accounts that separates professional services, pharmacy, retail, laboratory and boarding is what makes benchmarking possible later. Rebuilding history is far more expensive than starting correctly.
5. Licensing, DEA, insurance
Practice license, controlled-substance registration, professional liability, general liability, workers' compensation, and business property coverage. Requirements vary by state; verify with your state board rather than a general checklist.
6. Location and lease
The lease is usually the second-largest fixed commitment after debt. Terms to read closely: length, escalators, renewal options, who pays for the build-out, restoration obligations at exit, and whether personal guarantees are required.
7. Team and payroll
Payroll is where compliance risk concentrates: worker classification, overtime rules, state-specific requirements. An associate paid on production, a part-time relief veterinarian and a kennel assistant are three different compliance situations.
8. Systems: practice management and accounting
Choose the practice management system for clinical workflow, and the accounting system for financial truth. Then decide deliberately how they connect — a daily summary posted to accounting is usually cleaner than transaction-level syncing.
What new owners underestimate
- Working capital. The gap between opening the doors and steady collections is longer than the business plan assumes.
- Their own compensation. Planning to "pay myself later" distorts every projection and every future lender conversation.
- Estimated taxes. Profit that never hit your personal bank account is still taxable. The first year's tax bill surprises people who never had one.
- Time. Owning is a second job layered on top of practicing medicine.
A reasonable first-90-days rhythm
- Weekly: review cash position and outstanding client balances.
- Monthly: reconcile every account, review the profit and loss against plan, confirm payroll filings were made.
- Quarterly: revisit estimated taxes, review owner compensation, look at the balance sheet, not just the income statement.
Where this fits in the Foundation™
New practices do not fail from bad medicine. They struggle when structure, books and compensation were decided reactively. The sequence above is the structural half of the Veterinary Business Foundation™ — settled once, at the start, so that clinical decisions are the only hard ones left.