© 2023 MJH Life Sciences™ and dvm360 | Veterinary News, Veterinarian Insights, Medicine, Pet Care. All rights reserved.
Are you satisfied with your income?
One trick I learned was to construct my invoices so I did not draw attention to my hourly rate.
"So how much should a dairy practitioner be clearing these days?" I was a little stunned by the directness of the question, especially considering that we were in a social setting.
"Well, that depends on the goals of the doctor," I replied.
"C'mon, don't dodge the question. What is a reasonable net income for today's bovine practitioner?"
Seeing I would not escape easily, I decided to just jump in, "I don't think any experienced veterinarian should settle for less than $100,000, and many make far more than that."
My questioner nodded in agreement, and we moved onto another topic. Actually, if memory serves me right, I used that same number several years ago, so I'm probably falling behind in my thinking.
With that discussion in mind, I was very interested in the lead-off article of
The Bovine Practitioner
that was in my mailbox the next day. Dr. John Fetrow and others gave assessments of the future for dairy veterinarians. In the article, they quoted a 2001 American Veterinary Medical Association study, which reported that the average large animal veterinarian netted around $75,000 a year after deducting a reasonable return on equity for practice owners. Hmmm ... that means the average doctor earns roughly three quarters of what I believe is a minimum. Am I that far out of line?
A matter of opinion
I gave the correct answer with my first response to my questioner above. The minimum acceptable income is what meets the goals of the individual. We all differ in our desire for material possessions and financial security. If a doctor is satisfied with his income at any level, then that is the right income for that person.
In my consulting work, most of my clients are netting more than $100,000 a year per doctor, and all of them want more. They want to know how to do better. I have a fairly simple formula that will work in most situations. It consists of a repeating cycle of improving your skills, marketing those skills, experiencing an increased demand, raising your fees and returning to improving your skills.
This formula has worked well for others and me. See Table 1.
Set yourself apart
Here is how it works. Suppose you are comfortable with your individual animal skills, including sick cow, palpations and surgery. You are charging $75 per hour. You work about 50 hours a week with a relatively stable client base, but you know a neighboring practice is cheaper. You are afraid that if you raise your fees, then some clients will switch.
The first step is to acquire a new skill that will be valuable to some, if not all of your clients. One possibility that worked very well for me is to really learn how to interpret Dairy Herd Improvement Association (DHIA) records. Contact a regional center that processes most of the herds in your area. Ask to come in for some training. Get any printed material they have. Know how every number on the report is generated and how it impacts herd performance. Learn how to gain electronic access and to generate custom reports. Devise a method to chart changes over time.
Once you have mastered this process, offer to spend time with your clients who use DHIA to review and help interpret their reports. This is the marketing phase. Charge for this service. Some of your clients will be happy to pay you, and others will not. Let them decide.
If my experience holds true, you will add 30 minutes to 60 minutes of billable time per day by just reviewing records. In addition, records review will lead to other work as you uncover problems. Poor performance of fresh cows can lead to an investigation of transition cow management. High cell counts on the first test of first-lactation animals can get you involved with udder infusion of springing heifers. Soon enough, you will find yourself busier. This is stage three. When you get too busy, it is time for stage four, raising fees.
In theory, raising your fees will reduce demand. In reality, this rarely happens. One trick I learned was to construct my invoices so I did not draw attention to my hourly rate. Instead, I listed what I did and recorded a dollar figure for those services. While I used a set hourly rate to do my mental calculations, the client saw what I had done for him or her and the fee applied to those services. I never heard complaints.
Once you reach stage four and raise your fees, it is time to return to stage one and work on improving your skills again, that is, if you really want more work at this point. A next area to study might be milking machine evaluation. You can learn how to do this at a pre-convention seminar offered at the annual convention of the American Association of Bovine Practitioners. Now when you find high somatic cell counts that worsen with stages of lactation, you are in a position to sell your service of evaluating milking equipment.
Adding to your skills and offering new services helps your bottom line in another way besides allowing you to charge more. It also will improve your percentage of billable hours. Do you track that number? If not, you should. A reasonable goal is to bill for 65 percent of the total hours you work. Non-billable time includes stocking your truck, answering the phone, doing your billing and reading this article. Driving time is billable, but seldom generates an attractive return. When you extend calls with extra services, that is all billable and does not add any non-billable time.
Dr. Fetrow points out in his article that large farms spend less per cow on veterinary services than smaller farms. With the trend toward larger farms, that spells trouble for conventional dairy veterinarians. However, large farms often have unique needs that veterinarians are well positioned to address. Keep improving your skills to increase your value. Then, sell yourself to your clients.
One more thought. If you follow this process, then you and your clients both win. You raise your net income by providing more value to your producers. And your future becomes more secure because the value you add is not easily duplicated.
Do you make the income you desire? If not, what are you doing about it? Chances are you can raise your earnings significantly if you work the cycle I outlined in this article. Give it a try. You have nothing to lose except some income taxes.