If you work in a veterinary practice or in the pet industry or in a business that supplies goods or services to the industry and you have something to say - why not become a 'Guest Blogger'?
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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.
Where does your practice fit with the current recommended goals?
Percentage of Total Income:
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.
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:
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.
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?
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?
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”.
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.
Tracy has over 25 years of experience in the veterinary industry, having worked as a nurse, practice manager, practice owner, industry rep and several buying groups. 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 Tracy.
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