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Texts related to veterinary management,
finances and client relations
The Veterinary Business in Time of Revolution
About the challenges a modern veterinary practice must be ready to answer
Change of milieu counterparts to change of clients and their relationship to their pets. We live in a permanent revolution, 10, 20, even 30 years of dramatic changes of social and economical relationships, mostly, not exclusively led by changes in technology. To survive these circumstances a practice has to adapt, otherwise the future is not very bright.
The un-replaceable responsibility of an owner or manager is to lead the practice through stormy waters with the internal agreement that, maybe, no more any calm waters in the veterinary business. Days of James Herriot are gone. Sad or no, a fact. Veterinary services are seen (with very significant specific features) as a part of the service industry, competing with restaurants, sport clubs or cultural events for any customer’s disposable euro, dollar or shekel left in the tight family budget. Think of Nokia story. Or rusted lockers on local grocery stores, or the sunset of the fossil fuel cars.
These days confirm that cost optimization, competitive pricing and excellence in quality is the only way how to keep the industry growth momentum. One of the possible, and frequently the only one method how to get resources for this challenge is a process of consolidation and corporatization. The opposite, a brave hard way, is to stand as an independent services provider, ready to fight with competition for resources. Both possibilities require a clear strategy, vision of the future aims and detailed plans for each next step. The responsibility to either family or the stakeholder’s money dictates very guarded approach to unsafe involvements. Incautious purchase of a CT scanner can get a clinic in deep trouble someday.
A balance between the forceful tries to hit the goals and a careful move from point to point in safe direction requires hard work on planning each step, frequent status check and be ready for stretchy pivoting. Very like to diagnostic process and treatment of a severe metabolic disease.
But not every doctor is a manager, very rarely a good doctor is a good manager, you could hardly find the excellent doctor with the excellent managerial skills. A day has 24hours and, the specialization is the basic of human society evolution.
There is nothing like the hitchhiker’s guide to the galaxy for those who understand the need of change. Many dead roads on the way toward the vision, anyone can, and will, make many mistakes. This would be the inevitable price for the success and those who understand the value of getting the objective would embrace inaccuracies, oversights and missteps. Because the only way how to validate the vision is to make a test, tens, hundreds of them. Remember the days in university laboratory.
I hope, this book gives your practice a hard and fast tool to help with arrangements for next years’ challenges.
Defining the start-point, status quo assessment and diagnosis
(where we are)
What does it mean: defining the status quo?
We can focus on specific problem, or set of problems. We can analyze an organization within the context of external relations or center the attention to the world within the organization. We can work with processes, customers or finances. The analysis can be performed comprehensively, or narrow-focused to a particular need, with the urgent desire for change. There are many examples of the assessments and various motives for the performance. Conducting the evaluation could be time-consuming, expensive and exhausting. Therefore, must be always a good reason, a valid answer to WHY, what can outweigh the difficulties related to diagnosing the current status of the veterinary practice.
Collecting the right data leads toward to addressing the diagnose, rather than describing symptoms. Any effort towards the organizational analysis is the preparation for the setting, or update of the current strategic targets.
For instance, we could look at following:
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Culture definition
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Patients’ owners as customers
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demography and psychography
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Client’s “persona” (low income, millennials – technology)
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Location (access to service, community), opening hours, language
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Patients demography (brachycephalic, size)
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Other
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Minimal standards of care, not everyone pet owner wants the same level of care, (you cannot force all people to drive Lexus)
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Low average cost, higher margin per visit, with basic care in small footprint or the opposite
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SWOT
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Analyze the owner demography in the area
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Research nearby practices
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Identify competitors: unique and unusual services, reviews, modern technology (online app booking)
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Research what clients wants
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What is the potential size of the market
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How to reach the pet owners
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How to differentiate (hours, special care)
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From the competing to Co-opetion
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e.g. cooperatively work with 24/7 emergency clinic
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Hybridization of the specialized clinics towards the general practice
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Career satisfaction of the employees
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Money (salary)
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Discussion with clients over the cost of treatment
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Management Tips for the Successful Veterinarian:
Business FinanceTo stay in business and offer top-shelf services and products, the veterinarian must learn the best management practices. Keeping records of cash inflow and patronage is very important. But you must also learn to track and keep a record of every cash outflow. You will need to build a business structure that suits the kind of service you want to offer. For you to do that, you need to tailor your records to match the current realities of your practice setup.
In this article, we will show you how to leverage a good accounting system to move your business forward. Why Accounting?Accounting in a veterinary practice is non-negotiable. You cannot successfully run your veterinary practice without paying attention to the Chart of Accounts setup. You are expected to know, learn and understand all the aspects of running a business. When it comes to bookkeeping, accounting, business planning, and tax planning, you should use effective techniques with in-depth knowledge. This will help you to position your business for much-needed profit and economic/financial stability. Here are some times to help you maximize your accounting potential in the veterinary business:
Make sure you know all the key financial language and terms.
It is of utmost importance that veterinary business owners are acquainted with financial terms. In addition to that, they must also have a basic knowledge of bookkeeping and accounting. That way they can avoid losses that may come their way.Ensure that you are making use of widely used accounting systems and software: Choosing accounting software is an important part of the process of keeping your business afloat. You need to select and use the accounting software which is tailored to meet the needs of your business. Factors like size of practice can affect your choice of software, and that is commonplace amongst veterinarian practices. By choosing the right accounting software, you will keep better track of cash movement, be efficient and minimize errors.Strategically cut costs: To keep your business, you need to take on responsibilities and outsource strategically. Know when to take on the responsibilities and know when to outsource. Know when to splurge and when to retain funds. Know when it is ripe to employ helping hands and when not to.
However, If your knowledge of bookkeeping is poor or inadequate, you should hire a bookkeeper. A bookkeeper is vital to the success of your business. They can identify red flags in your business, such as employee theft, or costly mistakes in calculation and computation. Reducing expenses to the minimum is the recipe for the success of any business, and yours should be no different.Role of an AccountantGenerally, no business can expand or scale upwards without the services of an accountant. The veterinary practice is not immune to this truth. To move the business forward, the accountant must help you keep track of business status, and show you ways to move it forward.
Here are several ways your accountant can help you:
●Cash Flow Analysis
●Preparation for Tax
●Audit Compliance
●Cost Control
●Asset finance and protection
●Advice on Superannuation
●Revenue Strategy and Planning
●Business Planning and Strategy
●Valuation of Veterinary Practice
●Analysis and Assessment of Staffing
●Expansion and Scaling of Business
●Diversification of PracticeFinancial StatementsFinancial Statements are very important tools that help you understand the current state of your business. To make sense of your position, you need to pay close attention to your financial statements. You have to commit to going through your financial statements diligently or find someone who will.
Here are tips to help you maximize your use of the financial statements:
●Check your financial statements and bank statements regularly for irregularities. Discrepancies on checks or signatures, unauthorized transfers, debit (especially recurring debits) are oddities you should look out for and investigate.
●Implement and monitor a personal system of keeping a record of received monies. At the end of each period, reconcile it with the amount of money available in the practice.
●Look for, observe, and investigate the changes to the amount spent on medical supplies. One of the major loopholes through which businesses lose money is unchecked purchases.
●Where there are uneven production months, try future cash flow budgeting. That way you can make preparations and anticipate the non-recurring parts of the business. When that is done, you can plan for recurring items over a given period, as they will most likely stay the same.
●Prepare a break-even analysis. This will help you know the amount of productivity needed to cover production costs and expenses.Income Tax planning For people who run a veterinary practice privately, tax planning is essential. How you have structured your business will determine your tax rates. Keep in mind that the average veterinary practice is contending with multiple tax charges. Charges like Standard Income Tax, self-employment tax, employment taxes, sales tax, and personal property tax will accrue against you. You will either have to act proactively and plan or be put out of business.There are many ways in which you can plan your way out of paying humongous taxes.
Here are some of them:
●Incorporate your business or form an LLC
●Develop a tax-deductible advertisement campaign.
●Purchase properties instead of leasing them
●Take a depreciation allowance for medical equipment
●Use accountable plans for employee reimbursements
●Increase salaries for your workers who contribute more. Salaries are tax-deductible
●Identify tax credits for which you might be eligibleBottom LineStaying in business and thriving is the goal, but adequate financial planning is central to attaining your set financial goals.