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How to pull through the tough economy
Protect your job and help drag your practice out of these financial dumps.
The economic news these days isn't good. Financial experts now say the United States has been in a recession since December 2007. As a result of this slump, homes are worth less (prices have fallen 10 percent this year), retirement money is shrinking along with the stock market, and there were more layoffs in November than in any month in more than 32 years. These dire statistics have many veterinary team members—maybe even you—concerned about the fiscal health of their practices and their own job security.
One such team member is office manager Nicole Winkler, LVT, of Suffolk Veterinary Group in Selden, N.Y. She says her practice, which is about an hour east of New York City, has endured a financial slowdown since June. "Our peak season never came," Winkler says. "We're still making enough to pay our bills, our team, and then some, but it's hand-to-mouth at the moment." To improve the financial picture, Winkler decided to open the clinic just five days a week rather than six. She only had to cut one team member's hours as a result of the scaled-back work week. But she's still uneasy about the future. "We don't have the financial cushion we'd like should things get worse," she says.
This tugging fear that the worst is yet to come lurks around many practices even though most veterinary experts, including Dr. Karen Felsted, CPA, MS, CVPM, CEO of the National Commission on Veterinary Economic Issues, say the veterinary business is holding on. "Most practices are still growing but at a slower rate," she says. "But there are some clinics that have lost revenue and are looking at what needs to be cut."
There's that fear again. It's human nature to worry that your practice will make cuts, whether it be eliminating new technology purchases, all-expenses paid educational opportunities, or even jobs. But so what? What can you do? You don't set the fees, pay the salaries, or decide what equipment to buy. In short, you don't own the practice. Protecting your clinic's bottom line during this thin economy is out of your hands.
Warning: It's just that attitude that can kill a practice, Dr. Felsted says. "Everyone should worry about their practice's profits right now," she says. "If a practice doesn't make money, it's not around to make jobs." No matter your title, seniority, or longevity, you're crucial to your practice's ability to survive this recession. Here's what you can do to help save your practice—and your job.
1. Banish the dread
You possess the means to improve your practice's profitability, but you don't control the economy, says Mark Opperman, CVPM, owner of veterinary consulting firm VMC Inc. in Evergreen, Colo. "There are veterinarians who go to their teams and tell them that if things don't improve, they'll need to lay off somebody," he says. "But that's fear-mongering and it's bad for your morale."
So if you've been told the practice is struggling, don't waste your energy fretting about whether you'll lose your job. Instead, focus on brainstorming solutions. There might be new services to offer, different techniques for reminding clients of important appointments or medical treatments, or a way to emphasize better customer service.
2. Learn about the finances
You won't be aware of the areas that need improvement if you're not aware of your practice's numbers. Most owners are comfortable sharing the following financial benchmarks. If you don't already know these amounts, ask your owner or manager about them immediately. Once you know the numbers, work to increase them.
Average client transaction. The average amount of money pet owners spend during a visit goes up when they purchase more products and services. If each client spent just $5 or $10 more, your practice would enjoy large gains. For example, if your practice sees 10 clients a day, and each spends $5 more, you'd earn an extra $50. Do that every day for five days and you'd net an additional $250. Over the course of a year, that would add up to $13,000.
How can you affect the amount clients spend? Start by helping eliminate missed fees. Your practice loses money when doctors and team members give away—whether accidentally or on
purpose—products or services. Lorraine Monheiser List, CPA, CVA, MEd, management consultant with Summit Veterinary Advisors in Littleton, Colo., says you have a special part to play in stopping this. "You know doctors aren't always the best at remembering to capture all their charges," she says. "Technicians are better at it, and every team member can help." Technicians and assistants need to write down every service rendered, and the front-desk staff must make sure all those services show up on clients' final invoices.
Another way to raise the average client transaction: Offer fabulous service. For example, technicians should take extra time to explain the importance of procedures and preventives, receptionists should encourage clients to schedule follow-up visits before they leave, and kennel attendants should keep a spotless boarding area. "Clients evaluate a practice based on the experience from the first call all the way to checkout," List says. "Every team member has input into that experience." Launch a team-wide effort to improve service and increase the average client transaction by creating a visual motivator, such as a poster that tracks how much the average transaction increases over a fiscal quarter.
Remember, working to raise a low average transaction doesn't mean you and your co-workers are money-grubbers. It just means that you're recommending better care for pets and that clients are complying. Also remember to always recommend what's best for the pet regardless of whether you think cash-strapped clients can afford it. It's your responsibility to suggest top-of-the-line care, not to guess what clients' wallets can take.
Total transactions per month. If your practice rang up fewer sales in December 2008 compared to December 2007, you can do better. Try hitting the phones or sending more e-mails to improve your appointment reminders.
Number of new clients. If you're not attracting new clients, try these two ideas: Start a referral program by giving your current clients coupons to hand out to friends and family. When first-time clients present the coupon, they'll get a free nail trim, for example, and so will the person who gave them the coupon. Price shopping increases in a down economy. When price shoppers call, know what to say to get them in your practice rather than the one down the street.
3. Control inventory
After you've done your financial homework and know what it takes to get the numbers on an upward swing, it's time to analyze your practice for efficiency. The first place to start: Inventory. Wait. Before you skip this section because you're not the person in charge of stocking the shelves, make sure you're not part of the problem.
"The goal is to keep the lowest possible inventory while still practicing good medicine," List says. "If a product sits on the shelf for two months, why do you have it?" Sure, it's up to the person doing the counts and ordering to determine the answer to this question. But if your inventory manager keeps an appropriately lean product stash, you must help by sounding the alarm when levels get dangerously low. Did you notice that there are only two gauze sleeves left in a sleeve of 200? Then let the keeper of the inventory know. Are you the keeper of the inventory? You must watch your totals like a hawk.
4. Schedule appointments efficiently
To prevent downtime and crunch time, streamline client visits with these three tips from Opperman:
1. Build one 10-minute emergency slot per doctor into every day's schedule. Keep these times open until the day of the appointment. When clients call with perceived emergencies, you'll be able to schedule them. If walk-in emergencies arrive, these open appointments will help your team catch up.
2. Implement 10-minute flex scheduling. Depending on the type of visit, allow 10, 20, or 30 minutes for each appointment. For instance, a medical progress exam (otherwise known as a recheck) would get 10 minutes, whereas a wellness exam would get 20.
3. Schedule discharge appointments. Allotting just five minutes for clients to pick up their pets after surgeries prevents an end-of-the day rush and ensures there's time to adequately discuss any home-care recommendations.
5. Schedule staff efficiently
Overtime costs a practice dearly, as does overstaffing. Regardless of your position in the practice, watch for areas of overlap, Dr. Felsted says. "Go to your manager and say, 'Hey, does it make sense that Shane and I are doing the same thing?' or 'I think there's a quicker way to get the surgeries set up at the beginning of the day,'" she says. "It makes you look like a great employee and could save the practice money." If the double duty doesn't make sense, your practice manager can assign one of you a different responsibility.
If you have an idea for where your time could be better spent, share it. Suggest that instead of working with Shane, for example, you help get the pets ready to go home at the end of the day. If you spend three-quarters of your day working on duties that don't really need to be done, the above suggestion could put you out of a job. But this is a rare circumstance in most practices.
On the other hand, if you're twiddling your thumbs during downtime, be open to accepting nontraditional shifts—or propose them if your practice doesn't already offer flexible scheduling. Perhaps you could come in during the busy morning time, go home during the slow time, then return for the evening rush.
6. Focus on prevention
Finally, make sure your practice promotes the best possible medicine. Winkler, the office manager from the beginning of this story, says dental cleanings are providing her practice with steady income. She and her team members educate clients about the importance of overall wellness, including dentistry. "We play up the yuckiness of pets' mouths, especially bad breath and tartar," she says. "Then clients are more than happy to have us clean their pets' teeth."
Winkler's practice has adopted strict medical protocols to keep pets healthy. Presurgical examinations and heartworm, fecal, and blood tests are requirements, not options. These nonelective diagnostics help catch hidden illnesses. "Some clients go elsewhere because of the added cost," Winkler says. "But medicine is more important than money." And the tests net a profit in the end.
You know you've helped patients when they're healthy. You know your practice is healthy when it's profitable. And you can contribute on both fronts. When you're proactive, you'll protect your clinic—and your job—from this recession. "People who are valuable to a business will still have a job," Dr. Felsted says. "From a practical standpoint, anything you can do to be a stellar employee is good."
Brendan Howard is the senior editor at Veterinary Economics, Firstline's sister publication about the business of client and patient care. Please send questions and comments to email@example.com