C. Kolthoff, Cand.med.vet, E-MBA, IAF cert. facilitator
During my career as practice owner and practice management consultant, I have worked with more than 130 practices primarily in the Scandinavian countries. All practices are different, but there are basic topics I work with in every practice. In this talk, I will go through some of the things that make the most differences in the practices I work with. The key topics are:
- The “Why.” What is your compelling story that makes people want to work for you?
- Understanding the business dynamics and getting the financial strategy right.
- Pricing and invoicing.
- Using goals, KPI’s and proper follow up.
- Branding and marketing.
- Veterinary skills and equipment.
If you and your team do not know where you are going, it is hard as a practice owner to make the right decision and even harder as an employee. A compelling vision and a clear goal motivates and empowers people to act.
I start in a group setting with letting everyone watch Simon Sineks TED talk - “How great leaders inspire action.” I then ask the participants to interview each other two and two, to identify what drives and motivates them. After this I have them presenting the other persons “why” in plenum.
When I merge all the “whys” into a compelling vision, dream, and goals, I will end up with something that I can use to give a strong sense of direction, that the staff will buy into.
Once we have defined the why, vision and goals, I recommend making an effort to put it into pictures and graphics and build the story and brand internally by telling it over and over again.
Understanding the business dynamics and setting up the overall strategy.
Very often, the staff is not involved in the business part of the clinic. They do not understand the business dynamics and I often experience that they have a sense of “more money in, means more money for the practice owner.” In my opinion that staff needs to know the business dynamics and understand that a healthy business means job security, development and a lot of great opportunities to do fun stuff.
The need to know how much difference it makes if you can raise the average clinical transaction value with 10% or the number of visits per active client with 5%. They also need to understand the percentage of net income, that’s is available for staff salaries and still have a healthy business.
You can download the praQtice simulation model from www.praqtice.dk with a guide to fill in the number. I suggest that you fill in your own numbers and walk your staff through the numbers at a staff meeting and have them playing with changing the numbers.
Prizing and Invoicing
The major quick fix of all the practices I have visited, is getting the pricing and invoicing right. In areas with a lot of competition or with some neighboring vets dumbing the price, I often find practices that are seriously underpricing their services. In other practices, they just don’t have a consistent pricing system.
I suggest following a five-step plan:
- Use the praQtice simulation model with the team and agree on a common target for “average clinical transaction value.”
- Measure “average clinical transaction value” for individual vets and for the practice. Set goals and follow up.
- Have everyone working on attitude, communication skills, and their sense of own value.
- Set your pricing strategy. Discuss with other colleges. Be inspired by Ryanair (a basic fee + charge for all extras).
- Take an hour a month with your colleges to go through your cases and pricing. Did you perform the right procedures? Did you price all you did? Was the pricing right? Is there a reminder for the next visit?
- Reevaluate your prices.
Be a Leader and Business Person
Often I find practice owners doing everything from shopping, cooking, changings light bulbs to performing advanced surgery, and seeing most of the clients. When I ask them why they do this the reply is, that the team will not do it or that they are not able to do it. This has to change.
I recommend practice owners to take the leadership of their own practice. Communicate your fair expectations; be more demanding of the staff and push the staff more forward towards the tasks and the clients. Off course, this has to be done in a nice way. The result is almost often a much happier team.
The practice owner needs to have the overview, the capacity to build the team and the ability to make everyone work together for the common good. As a practice owner it is fully acceptable to communicate that you love animals and clients and needs to make a good living as a business person.
The Right Staff at the Right Cost Level
Staff costs, including practice owner salary, is by far the biggest expense running a practice. In Denmark and Norway, practices spend between 60–70% of their net income (turnover minus cost of goods) on staff (salary, tax, education, etc.). Therefore, you have to be very much aware of how much you spend and who you hire. Often practice owners spend weeks choosing an X-ray machine that cost 8.000 euro a year and only an afternoon choosing a veterinary surgeon that cost 70–100.000 euro a year. I advise practice owners to spend enough time in the hiring process.
I suggest that practice owners always keep a firm eye on the staff-% as a KPI. When you man the practice you should start estimating the net income and thereby you know how much you can spend on staff. I advise to have a three-year perspective, meaning that you estimate your net income and thereby know how much you can spend on new staff in the coming years.
Goals, Measurements, KPIs, and Proper Follow-Up
If you want to perform well and keep on improving your business, you need to have goals, set up key performance indicators and make sure that you communicate them the right way to the staff.
Elsewhere in these proceedings I will go through this subject in details, so I will briefly mention the KPIs that you should monitor and communicate regularly:
- Weekly and monthly turnover (clinical, pet shop, total).
- Average clinical transaction value on a monthly basis.
- Percentage of pets receiving dental treatments.
- Percentage of pets with an active reminder.
Veterinary Skills and Knowledge
I often work with practices in a poor financial state and these practices often try to improve their finances by saving money. Very often this is not a viable way of running a practice You need to have the basics like proper dental equipment, in house lab, and gas anaesthetics. On the other hand you find practices that invest too much in things they will never use or things that can never pay for itself. I suggest that you always make a cost benefit analyses before buying equipment that costs more than 5.000 euro.
When it comes to veterinary skills the same applies. You need to have the basic skills. When I invest in training I often start with focusing on communication skills, dentals and the basic surgical skills as this is where the money lies. You can either choose to take courses or you can see practice at the hospital, where you refer your cases. (If you help growing their business, you can ask for help in growing your own. This is a win/win.)
Branding & Marketing
(Anne Klindt will cover this subject in more details, so I go through this very briefly.)
You need to build an attractive brand that serves to purposes. It has to create pride within your team and it has to make your practice attractive for the clients. Have a professional helping you with the basic branding and make sure to use a professional photographer to take pictures.
Get organized when it comes to marketing. Set goals, make a plan, create routines, and make sure that things happen at your practice.
Have a great online presence with focus on Facebook and a reasonably good website. Make sure that your ratings are good and that you have a lot of them. Get in the press. It can be cost efficient marketing that works very well. Build a community around your practice.