It’s no secret that most of us are in the veterinary industry because we genuinely care and we have a passion for helping our clients and our patients.
We see it as our duty to educate our clients on preventative health for their pets, and to undertake best practices when our patients are unwell. For those of us who work primarily at the front line, our focus is purely on the health and welfare of our patients. We can count ourselves lucky to be able to work in an industry doing what we love and receive a paycheck at the end of it.
What we don’t often consider, however, is the chance that one day there won’t be a paycheck.
If you aren’t an owner or manager, it’s easy to forget that a veterinary practice is still a business, and a fundamental requirement of a business is to make money.
There are the basic costs of running a business such as:
- purchasing stock,
- paying wages,
- rent and electricity.
Then there are:
- marketing costs,
- equipment repairs and
- insurance to think about.
At the end of the day, if there is any money left over, the owners might pay themselves a wage.
Ideally, a business is looking to make a profit, to grow, and to continually improve.
It’s important then as frontline staff that we also keep the financial needs of the practice as a business in mind as we carry out our day-to-day duties.
Here are some key financial management concepts that every member of the practice can contribute to:
1. New clients.
Every new phone enquiry or potential new client walks into the practice is a potential source of long-term income to the practice. Consider a new client with a new puppy, from initial puppy vaccines to wellness checks, nutrition and preventative care over the lifetime of that pet. It is every team member’s role to foster a positive relationship with new clients to help sustain a long-term client base for the practice.
2. Stock control
Inventory is the second biggest cost in practice after wages. There is a lot invested in ensuring that the shelves are full and that there is equipment (disposables) available to carry out daily tasks. It is important to have an understanding of the impact of having to write off old stock due to a lack of stock rotation or holding stock that simply doesn’t sell. While discounting might sound like a great incentive to encourage a purchase, bear in mind that to generate the same gross profit after a discount, you need to significantly increase your sales volume.
Many practices lose a lot of income by simply not invoicing appropriately. When you don’t charge for what you do, you are literally giving away your time and money. A few commonly missed charges include injection fees, catheters, skin scrapes, suture materials and recheck consultation fees.
Best-practice veterinary care and good financial management must go hand in hand to ensure the long-term success of your practice.
Any questions for Mark about practice profitability for your business? Ask them in the Comments section below….