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Do you need to be in a veterinary "Group" to be competitive?

Posted in Operations @ Sep 20th 2017 - By Tracy Kamens, Senior Practice Advisor, Vettr
Do You Need To Be In A Veterinary Group To Be Competitive V2

The question many independent veterinary practice owners are asking is “Do I need to be in a ‘Group’ to be competitive?"

The short answer is No – however here are some questions to consider:

  • Are you happy with your current level of profitability?

  • Is your profitability on an increasing trend?

  • Have you actively done anything to improve your profitability in the last 2 years?

If you answered “No” to any or all of the above three questions and you would like to turn those answers into “Yes”, then joining a Group is certainly one option to consider.

Let’s start by looking at some basics

Where does your practice fit with the current recommended goals?

Percentage of Total Income:

  • Fixed Cost of Goods = 20%
  • Variable Cost of Goods = 20%
  • Vets Wages (including your own) = 20%
  • Support Staff Wages = 20%
  • Profit = 20%

Which of these can be changed with the least amount of effort?

Cost of goods.

  • When was the last time you looked to rationalise the number of non steroidals, ear treatments, or antibiotics,etc you carry?
  • How do you decide which product is best?
  • What mark ups do you use?
  • Do you prefer brands or generics?

There is no right or wrong answers to these questions however there is a strategic way of reviewing your cost of goods. Being part of a Group can help you identify how to save money on your purchases without necessarily 'dictating' the products you choose to use. Interestingly, a good wholesaler rep can also be very helpful in this area.


Wages obviously make up the bulk of a vet practices cost, but what can you do about them?

The key is hiring right the first time and then keeping your staff engaged and empowered. This will in turn, lead to improved efficiencies.

There are a few parts that are worth breaking down:

1. The hiring process.

  • Do you hire for cultural fit?
  • Do you advertise your core values so that applicants know what to expect?
  • When was the last time you reviewed your interview process?
  • Do you have the applicants drop off their resumes or have a pre interview questionnaire so you can weed out some before the interviewing stage?
  • Have you considered how to make your hiring process more efficient?
  • Have you ever calculated how much it costs in staff wages to hire a new employee?

Most Groups offer some sort of help in this area and so if your answer was “No” to some, most, or all of these questions, the next question to ask yourself is “How much difference would help in the hiring process  make to me?”

2. Staff Engagement

After we have employed our fantastic team how do we keep them? Some of the techniques you can use to monitor and improve your team’s satisfaction and engagement include:

  • Staff engagement surveys,
  • Regular staff meetings,
  • Performance reviews,
  • Team building days,
  • Budgeting for continuing education

How many of these do you currently do and how much difference would help in this area make to you?

3. Training

It’s no secret that to improve efficiencies we need to train our staff.

  • Do you have routine training?
  • Do you have a preset calendar on training topics that corresponds with your marketing calendar?
  • Do you train your leadership team on how to train other staff?

Of course, all of this can occur within your practice without the support of a Group. However how effective are your current initiatives ? Are they at the level you would like them to be? Or could you use some help?

Put simply

If you’re still not sure if joining a Group is right for your business then it might help to consider the following points.


Groups can help you get better pricing on select drugs and services. If you do not want to change your drug options either pick a group that has partnerships with companies who supply your current drug options or you could also continue to go it alone. If your COG is close to the 20% KPI, then is saving more money on drugs as important as looking at what else is impacting your profitability?


Some Groups offer support and resources for your hiring process. Have you looked at what your staff turnover rate has been in the last 2 years? If turnover is low and you have a great team, then maybe you might want to focus on client retention, average client spend and/or visits per year, improving your COG savings or improving your marketing.


Marketing is an interesting concept for Groups. Marketing costs are around 2-4% of your budget and in order to have an effective marketing plan you need an intimate knowledge of your specific target audience and you also need to use your own voice to be authentic. So be cautious of Groups who offer marketing 'done for you' options.

The flip side would be a Group that offers structures and strategies to help you to create your own marketing plans and training for your leadership team on how to implement them. How important is getting new clients through the door versus having an engaged and well-trained team to keep your clients happy?

Food for thought

Hopefully these points have given you some food for thought. Looking at the current Australian Vet Practice landscape, currently about 10% of the vet practices are in some sort of Group or another. This means they are getting some or all of the following:

1.  Better pricing for products and services,

2.  HR support,

3.  IT support,

4.  Management support and training, and

5.  Marketing assistance

- granted all at a “cost”.

What does this mean for your practice?

Well you still have a number of choices. You can either:

1.  Upskill yourself and your staff and go it alone,

2.  Hire a consultant to help you,

3.  Join a Buying Group (with or without management support),

4.  Sell your practice to a Group, or

5.  Work out your own succession/retirement plan.

To be honest no way is better than another.

The only thing that is certain is those who give it careful consideration and decide on a plan for the future will inevitably be better off. 

If you have any questions for Tracey, just ask them in the Comments section below.

Click here to read Part 2 in the series:  Choosing a veterinary buying group? Use your hiring process!

About Tracy

Tracy has over 25 years experience in the veterinary industry, having worked as a nurse, practice manager, practice owner, industry rep, several buying groups and now Senior Practice Advisor for Vettr

She is passionate about finding ways to help businesses improve and grow. Mentoring staff to achieve their potential along with customer service and marketing are some of the key areas she enjoys.  If you would like to get in contact feel free to email



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