Practice Management News and Views from around the World – June 2012

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Dodd & Co Release Vets Profits Figures For 2011

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Dodd & Co, specialist veterinary accountants, have just compiled their annual vets’ profits report, based on their clients’ 2011 accounts. The figures are very similar to last year, with net profit showing a small reduction from 17% to 16.4% of turnover. The profit figure is based on accounting profit before owners remuneration

Turnover has increased by on average 10% per practice, although some small animal practices in less well off areas have seen a reduction in turnover as household incomes remain under pressure.

The largest cost is direct costs (drugs, lab fees, cremations and disposals) which accounts for 33.7% of income, leaving an average gross profit of 66.3%. However there is a large variation in these gross profit figures between practices, from 52% to 78%, meaning that some practices are securing much better discounts and rebates than others, or make a larger proportion of their profit from fees rather than drugs.

The second largest cost to vets’ practices is staff wages representing 30.1% of income. This also includes social security costs and staff pensions. With employer’s pension contributions becoming compulsory over the next few years these costs are likely to increase further.

The pie chart above shows how turnover is spent, leaving 16.4p of every £1 of turnover as profit before owners remuneration

You can click here to visit the Dodd and Co website

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Five Reasons to Rejoice When Corporate Vet Practice Moves in Nearby

by Dave Nicol

Many practice owners fear a corporate practice setting up next door. But in my experience, there are many reasons to be happy when this happens. Here are a few to think about.

  • You are probably cheaper Though you may fear being undercut by a well financed corporate practice, reality is that many full service vet clinics do not make a lot more than 5-8% net profit (in the UK and here in Australia the net profit sits at around 14% for corporate giants CVS UK Ltd and Greencross). The lesson is that these guys have costs too and even if they do enter with low prices, they won’t stay low forever. My experience has been that they are far better at charging for services than the average vet owned small clinic, so chances are you will be the cheaper competitor. This price difference can be used to your advantage.
  • Massive commitment There is virtually no chance that an assistant employed by a corporate practice will have the same commitment to their job as you do to your business. There is simply more on the line for you than them. This is your baby, your dream. It is just a job to them. However highly motivated they are, there is nothing like “skin in the game” to boost motivation. Assuming you have more personality and charisma than a Rottweiler with toothache, this is your “widow-maker” weapon. Clients want to see the same vet as much as possible; you are likely to be the face of your practice for years. The corporate will likely change vets more frequently — and in some cases as much as every 6-12 months. You therefore have the chance to create the notably different, unique, personalised service than clients love — this is what I mean when I talk about ’boutique clinics’. Now imagine giving this service level and being seen to be cheaper? Do you think clients might like that?
  • Fast decisions Big things have rules, cumbersome protocols and multiple steps in a decision making process. Little things often do not. You are smaller, lean and nimble. This means you can make decisions faster. Vets also tend to hate having their clinical freedoms limited by rigid protocols, so a highly controlled corporate life is less attractive to many vets than the freedom offered by smaller clinics. Use this your advantage when recruiting.
  • Finger on the pulse.You work in your business each day as principle and manager. The owner/manager of the corporate does not, they have other clinics to look after. This gives you an edge as you know intimately and accurately what’s happening on the ground each day. Accurate information helps you to make good decisions and take action quickly. This is mega-important when managing your team and performance.
  • Large organisations mean lots of people.Corporate practice (for right or wrong) has gotten a bad name with vets and in many quarters seen as insensitive or “chasing the dollar”. This grates with the ingrained veterinary ethos because there is a more clearly defined/articulated conflict. Doing medicine well means spending a lot of money but vets aren’t much good at asking clients to pay full whack for it.

    Managing this balance is difficult enough, but becomes ten times harder for a non-vet manager (many regional decision makers in corporate practices are either nurses or come from out-with the industry). When clinicians are told “no” by anyone they don’t like it. But when the person saying “no” does not have any clinical experience, they have a far harder time. This is principally a respect and power issue. Non-clinicians lack the knowledge base viewed as important by vets, so they lack credibility. (I’m not saying it’s fair,
    but it is an observable truth).

    When there is a lack of respect then the organisation won’t function well due to conflict. Conflict clearly is a severe impediment to just about every aspect of performance. Who, after all, wants to pull the extra mile when they do not like being at work? There are many sources of conflict of course and this is by no means just a feature of life in corporate practice, but the bigger the practice the more people there are to keep happy. You are small, so treat people well and you will become more powerful than you can possibly imagine. (Or at least you’ll have a happy team that turns up to do a great job).

    You can click here to visit Dave Nicols blog

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    Clients are not your friends

    from an article by Andrew Roark DVM MS published in the DVM360 website

    Friends and family bring a lot of great things into our personal lives, but they also bring stress. For example, my wife is days away from giving birth to our second child. While she has been amazing through the past nine months, the reality is that spending time with a pregnant woman can be a bit like spending time in a field full of landmines. I recently explained this to the manager at the grocery store when I found the entire ice cream section off-limits after a freezer malfunction. He was about 18 and had no idea why I was so upset. He’ll learn someday.

    I care deeply about the anxieties and problems of my family and friends. The exhaustion and discomfort my wife experiences daily are things that I internalize and carry around with me. Her happiness and her perception of me affect how I see myself as a person and a spouse. When my friends struggle or ask for advice, I take their concerns on my shoulders and roll them around in my mind as I cook dinner, brush my teeth and read princess stories to my daughter. I take these stresses on because I love these people and because they are important in my life. But when a client causes that stress, that’s another story.

    A client with two faces

    Recently, a client started visiting the clinic on a regular basis. She had brought home a new puppy, and I helped her work through her puppy wellness visits, a few behavioral bumps, a spay and some inappropriate urination problems. She has a great dog, treats the clinic’s staff well and follows recommendations religiously. She lives near one of our technicians and always talks to her and high-fives her children when they’re out in the neighborhood. I like this lady and I’m happy when she walks in the door.

    This client was in the clinic recently, and we were addressing her pup’s new affinity for urinating on expensive furniture. We laughed, she let her dog lick her mouth to the point that I got a little queasy and we generally had a good time. She elected to start a common antibiotic while awaiting diagnostic results.

    Things changed a bit the next day. My receptionist came to me five minutes before closing. She said the client was on the phone, she wasn’t happy and she wanted to come in. I asked the receptionist to tell her that I’d wait for her if she came right away. I was wrapping up the last of my paperwork when I heard her walk in and say: “Yeah, the pills Roark gave me yesterday f***ed up my dog!”

    “Surely she’s joking,” I thought. “She can’t be swearing at the front desk about anything an antibiotic did to her dog.” I expected her to high-five me for waiting for her rather than blow up in the waiting room.

    The exam went fine, other than the fact that she refused to look at me and swore that nothing could’ve caused her dog’s behavioral change besides the single dose of antibiotic from the previous night. I did everything I could to pacify and educate this concerned and angry client before she walked out of the clinic without paying for the exam or any of the supportive care we provided. Three days later she called to mention that the dog was doing much better and that she remembered the patient might have fallen out of a van and landed on her neck shortly after receiving the antibiotic.

    The aftermath

    As I stood in the waiting room and watched the client drive away, I asked myself how deeply this person’s anger would affect me. It’s possible for me to let something like this wreck an entire weekend–especially when I’m so adept at devising creative ways to blame myself for medical phenomena over which I have no control. As I pondered my role in this patient’s condition, two hard-learned lessons floated back to me:

    You’re never as good–or bad–as clients think you are. I once talked to a college professor about the reviews he got from students. He said that the key to taking feedback is to remember that no matter what you do, 10 percent of people will think you walk on water and 10 percent will think you’re the worst person they’ve ever met. Neither group is right, so remove both from consideration and use the rest of the feedback to improve what you’re doing. He was right. Don’t let the clients who love you or those who despise you
    control your self-image or self-confidence.

    Clients are clients, not friends or family. As a general rule, I like my clients. There are some clients I adore. I go the extra mile for them, check on them from time to time and visit their homes if they want me to perform euthanasia in that setting. But they’re not my friends or my family.

    Lesson learned

    The difference between clients and friends is that friends don’t pay me for my time during the majority of our interactions. I say the majority because I do have friends who bring their pets to me. Secondly, clients have a nasty habit of substituting entitlement for friendship and becoming very upset when they feel let down. And finally, while I accept the stress of family and friends, I choose not to take the emotions and frustrations of clients home with me.

    Obviously, I hold onto the positive energies that clients bring for as long as I can, and some experiences I simply can’t hang up with my white coat before clocking out. Fo the most part, I give my clients my best when I’m at work, I make sure they know who to go to if problems arise before I return to the clinic, and then I go home, making sure to pick up ice cream on the way.

    You can click here to visit the DVM360 website

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    Now for Five Reasons Why Corporate Veterinary Practice is Your Worst Nightmare

    by Dave Nicol

    Do corporates spell doom for your vet practice?

    • Corporate veterinary practices are better funded and spread their risk over a wider area both geographically and technically. You exist in one place doing one thing. This makes them more recession proof than you.
    • They have a marketing team and take promotion of their business seriously, with adoption of modern database and digital marketing practices. You send out vaccine reminders, have a website you haven’t updated for months and think Facebook is an annoyance that should be banned.
    • They have strength in depth. If a bit isn’t working they tend to replace it. This means they have staying power. If you are the bit that isn’t working then you’re in trouble.
    • They have an HR team that, if you are very unlucky, might have half a clue what performance management actually is. You do ‘once in a while’ appraisals that never seem
      to achieve anything more than upsetting the team. You hate doing them as much as the team hates getting them.
    • They spend a lot more time thinking strategically, you spend all your time thinking clinically.

    The message for smaller less business savvy practices is, and I speak with experience having worked as director in a large group and the owner of an independent hospital, that corporate veterinary practice will never have as big an impact as you fear. However they are also here to stay and you need to think about how to deal with that. Reality is that what happens in your practice is just about completely down to you. If you spend a day a week focusing on running your own business (building the plan, ensuring everyone has clear objectives and treating customers like royalty), rather than worrying about what other’s are up to (which incidentally you have no control over) then you are likely to benefit from improved performance in your practice.

    You can click here to visit Dave Nicols blog

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    June is offers month on VBay!

    The inexorable rise in online shopping has been driven by the choice, convenience and value that the internet delivers so veterinary shoppers will be pleased to hear that Offers Month on Vbay is coming soon!

    “What Practice Managers really want to see on Vbay is a range of special offers” says Caroline Johnson, co-owner the new site, “…so that is what we aim to deliver! As a result we have dedicated the whole month of June to attracting the best of what is available in products and services for veterinary practices and putting them in one place.”

    So, if you’re a supplier and wish to take part in Vbay Offers Month, FOR FREE, please get in contact with kristina@vetpol.co.uk who will help you get set up.

    If you’re in practice and looking for a special deal on just about anything veterinary-related, then be sure to click here during June

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    BSAVA Congress invaded by the Orange Brigade

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    The BSAVA/WSAVA Congress was invaded by curious orange beings, but there was no cause for alarm. The Vet Charity Challenge logo was brought to life to promote the event and to encourage vets to make up a team of four to take part on 15th September 2012.

    Teams of four will participate in the one-day event that is open to all levels of fitness and involves a series of physical tasks and puzzle-solving challenges. The teams can choose their own routes and take part in walking / running, cycling and kayaking stages and can make it as easy or hard as they like.

    The charities benefitting from the 2012 event will be vets’ favourites: Hounds for Heroes; SPANA, and Pet Blood Bank. The charity is expecting to raise in excess of £20,000, and urge the profession and their industry colleagues to get together to have some fun, and raise some serious money at the same time. It’s a great PR opportunity for practices and an opportunity for team-building whatever their business.

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