11 inexpensive ways to brighten a practice amid recession

My goodness, look at all the layoffs, even within the biggest and strongest companies.

Layoffs and more layoffs dominate the headlines, along with wage cuts.

It's goodbye to many businesses: 40,000 will close this year.

And some veterinary practices will be swept away alongside them.

Will the veterinary-service sector also be considering layoffs and cuts?

No ... well, maybe.

When cash is flowing freely, even the weak survive. But when the going gets tough, Darwinian mechanisms take hold. The strong survive, perhaps thrive. For some practices, times are tough. For others, things keep rolling along nicely — sometimes even within the same community.

Nearly a generation of DVMs has never seen hard times or struggled with business. Most will adapt, but it will be a challenge for some.

Part of the reason for the shake-out is that we've had at least 10 years of robust growth in veterinary services, increased sophistication and relentless increases in fees fueling still more expansion.

To evaluate our future, the first question we must ask is one that many failed businesses failed to ask: Do we have a product or service that customers will purchase at the price we are asking?

While the growth years were great, what suffered was sound business mentality. A balancing of capitalization costs vs. fees to be collected is really not part of many discussions about veterinary economics.

We see huge capitalization costs out of balance with safe debt loads. These debt loads cannibalize other budget groups, including funds to pay support staff.

We read that student debt loads are too high, but debt is burdensome for private practices as well.

A good example of excess capitalization is the cost of practice housing. We like to see it around 7 percent, but now some facility expenses are at 15 percent or more. Ouch.

The government is pouring tax dollars into the economy.

That will keep the economy floating along, but eventually the excessive capacity must be eliminated and economic accountability must return to business plans. These issues will affect our lives.

Keep a good support staff

Now is the time to consider our plan for the next six, 12 and 24 months while the economy adjusts to the bailout, the trimming, pruning and elimination of the deadwood.

Despite all the concerns, the bright spot is that good pet owners will continue to take care of their pets.

We must expect to provide more accurate estimates, accurate prognostics, more accountability in response to consumer demand and economic bumps that include national events, local events, local storms, a personal health crisis, a divorce, a funeral and such.

The challenge is to take this time to create positive energy for your practice.

Certainly the most important factor to surviving a down economy is the support staff.

So nurture, feed, nourish and treasure key employees. A well-rested, attentive support staff is essential to good customer service. Cutting the staff undercuts morale and compromises customer service.

Support staff numbers and skill are linear with income. So in a down economy improved customer service is an edge for a practice because clients will remember the good service when the rebound comes.

Even if your practice is doing relatively well, you still can stoke the fire by following some or all of the following 11 steps:

1. UPGRADE SOMETHING. Look over the facility. Get out the paint brush. Consider an upgrade to American Animal Hospital Association (AAHA) accreditation. Even if you decide not to go through the formal accreditation process, examine the 900 standards and see what you can add. Or, better yet, upgrade yourself; look into getting boarded.

2. MAINTAIN STAFF MORALE WITH A WISH PARTY. Turn off the telephone. Cater lunch. Sit down at a fun-filled, in-house luncheon. Ask what they want for themselves and for the clinic. Then give it to them. (Be brave; their requests are realistic.)

3. MAKE SURE FRED IS COOKING. Earmark at least 1 percent of the budget for animals and owners in need. FRED, which stands for Fund for Reclamation, Education and Development, is an opportunity to tell staff and clients that we care, and we are doing our part to help the community. (Actions speak loudly.)

4. HAVE A GOOD-MORNING SMILE FOR ALL. Practice leaders should go to each staff member each morning and spread morning cheer. Each member has hidden home issues that might take a smile away: a layoff, a cut in pay, a sick child, troubles with health. Make the practice a sanctuary.

5. IMPROVE STAFF EDUCATION. Each day take a little extra time to explain how things work. Why the saline flush with cancer treatment? Why do we take two films? They want to know. Break the day up with spontaneous, five-minute seminars. Draw them out. (Staff education is the best marketing technique.)

6. IMPROVE CLIENT EDUCATION. Make sure your better educated staff has time to chat with clients, to share their newly acquired information. Bathe all "going homes" at no charge, and make sure clients know of this complimentary service. Give clients your e-mail address and encourage them to ask questions of you and your staff.

7. "N FOR ALL." N stands for what each client gets after each visit. N means next appointment. Even if they come in for a toenail trim, a simple reminder is in order: "We will see you in six months for the annual visit."

8. LEARN A NEW SKILL. There are many ways to do so without spending a lot of money. Go to the human sector: Visit a dentist, a radiology unit, an intensive-care nursing station. Visit a respected veterinary colleague. The goal is to find a useful new skill to learn.

9. AUDIT THE MEDICAL RECORDS. Start auditing records with a simple "10 per day" list. Review the entries, the differentials, the plan of action, the diagnostics and compare entries in the record with the invoices. Put these lessons to work to improve staff and client compliance. Your new touchstone should be, "If it is not written in the record, it did not happen." Expect some surprises.

10. BONUS. Plan a significant vacation six to 12 months down the road. One year my father's company had a really bad year, which meant no vacation for him or mother. But his philosophy was, during difficult times it is more important than ever to take a vacation. Which they did.

11. REAFFIRM THE PAYROLL, BENEFITS AND RETIREMENT PLAN. Hard times are always an especially good time to do this. Cuts in pay, benefits and vacation time are morale killers, so do everything reasonable to keep things as they are, even if it means that the veterinarian owners take home less. As much as possible, keep your support staff intact. (If it comes down to it, cut veterinarian time first because income is linear with support staff, not veterinarians.)

The next article will discuss how to return to the basic issues of budget and expenses, including why it's OK to forego short-term profit in a long-term business plan.

Dr. Riegger, dipl. ABVP, is the chief medical officer at Northwest Animal Clinic Hospital and Specialty Practice in Albuquerque, N.M. Contact him by telephone or fax (505) 898-0407, Riegger@aol.com, or www.northwestanimalclinic.com. Find him on AVMA's NOAH as the practice management moderator. Order his books "Management for Results" and "More Management for Results" by calling (505) 898-1491.