Nine (neon) signs your veterinary practice is in trouble
Tom McFerson, CPA, ABV
Tom McFerson, CPA, ABV, is partner at the veterinary accounting firm Gatto McFerson in Santa Monica, Calif.
Sometimes the practice owner is the last to know. Watch for these flashing signs of warning to get ahead of the curve.
Your once steady stream of clients has suddenly become a trickle. You know your veterinary practice is in tiptop shape-so why do you feel like the problem is just under your nose? Don't panic! You're not alone. There are several flashing signs that could be going unnoticed by you and the rest of the veterinary team. Here are the ones I see most often.
All lettering from Shutterstock.com Social media flatlining
Facebook, Twitter, Yelp, Instagram-they all can help your veterinary practice. How are yours performing? Are you updating and keeping things fresh? How much interaction are you receiving, positive or negative? Gauging this can be difficult, and quantifying it can be an inexact science, but you can definitely identify trends. Healthy social media “buzz” typically equates to increased interest in your practice. Increased interest means increased awareness. Increased awareness usually leads to increased business.
* Want tips, tricks and advice to salvage your dying social media accounts? We've got tons of resources here!
Are experienced associates not returning your calls? Qualified technicians not sending you their resumes? Most local veterinary communities are tight-knit, and rumors don't stay quiet for long. Those rumors could be saying your practice has issues. Low pay, poor morale, iffy work conditions or just a dark looming cloud of potential business failure-all of these could be hampering your hiring process and, by association, dragging your practice down. My top tip to fight this? Try to turn things around by sending one of your trusted employees out to sing your praises in the veterinary community through social media and local community events. Also, take a long, hard look at staff benefits and morale. Anything that needs improving?
* Hiring and firing can be uninspiring and tiring. Luckily, we've got tons of content to help with both. It's all here.
At the local chapter meetings, it's all owners seem to be talking about-how they're being approached, even harassed, by veterinary consolidators. That may be when the realization hits you that your phone isn't exactly ringing off the hook. Much like the kid picked last for kickball, you can't help but wonder what about me? Ask yourself instead, What is it about my veterinary practice that isn't getting attention?
* There are 12 big things consolidators look for in a practice. We've listed them out for you in detail here.
Bank balance cratering
This is typically a real-time indicator: a bank balance that's slowly but surely drifting lower and lower. If, with all things being equal (as in, no unusual expenses and no large owner distributions), a practice owner finds the hospital's bank balance moving in the wrong direction, there's clearly a problem. Cash on hand is the ultimate scoreboard for veterinary practice. If your checking account is shrinking, you're losing-figuratively and literally.
* Have you checked out our content on financial management? You should.
New client counts crashing
All veterinary practices lose clients. Animals die, owners move away. Having a steady flow of new clients is what keeps a practice moving forward. Look at your count of new clients: Is it moving up or drifting downward? And what's the source of these new clients? A drop in new clients could signal a problem; a drop in client referrals by existing clients could signal an even bigger problem.
* Hey! We have a ready-to-use client questionnaire to improve your service.
Outgoing record requests blossoming
Another ominous sign is the rate at which your practice is shipping out records to other veterinary hospitals. Many practices don't track this number, but it can be a leading indicator of trouble. How many records are you faxing or emailing on a monthly basis? How does that compare to the past? Has there been an acceleration? If the answer's yes, a problem is likely bubbling under the surface.
With hundreds of millions of dollars lent to the veterinary industry, lenders are a rightfully paranoid bunch. They've also developed an incredible knack for sensing financial problems. Have you received more lender “check-ins” than usual? Have you been asked to provide financial statements quarterly instead of annually? This may be a sign that your lender is smelling something you're not: a veterinary practice in trouble.
* Dealing with veterinary loans and lenders can be scary. It doesn't have to be. Check it out.
Schedules going crazy
One of the most frustrating aspects for a veterinary practice is the daily schedule. The more reliable the patient schedule, the smoother a practice can run. How's your daily client schedule? Got a lot of late cancellations? Plenty of no-shows? These are signs of an unreliable clientele, which can result in a practice with operational issues.
* Scheduling issues? We feel you. Here are some great tips to make a well-paced schedule for clients and team members. Don't worry, equine experts. We feel you too. Here's how to make time for equine in a mixed practice.
Owners burning out
Another leading indicator? The owner's physical, mental and emotional health. Are you overly tired and apathetic? Do you dread going to the office each day? Everyone has days where they'd like to turn off the smartphone and just binge-watch Game of Thrones, but is this how you feel every day? Do you think your clients and staff pick up on this? An energized owner typically leads to an energized practice. A burned-out owner usually results in a veterinary practice in trouble.
*Feeling the burn? Burnout shouldn't be ignored. Click here to find out how to overcome it.
Tom McFerson, CPA, ABV, is a partner at the veterinary financial and consulting firm Gatto McFerson in Santa Monica, California.