Veterinarians using credit wisely but worry about long-term survival
Preliminary results of an AAHA survey of practice managers and owners show that while most practices are doing well and making sound financial decisions, a significant percentage are spending more than they are making, and nearly a quarter (24 percent) of all practices surveyed are worried about the viability of their practice in light of a long-term credit crunch.
In order to finance normal operating expenses, the most common type of credit that practices use is business credit cards, according to the survey. Only 25 percent of respondents said they never use them. Nearly half of practices regularly or occasionally use bank lines of credit, and about 23 percent said they use personal credit cards. Barter was also a popular way to help cover operating costs, with about 30 percent saying they use that method.
In terms of overall credit health, it was good news. About 58 percent of those surveyed said their monthly operating costs did not exceed their monthly income. But 32 percent of practices reported their monthly overages were between 1 and 25 percent.
Without readily available credit, 18 percent of practices said they would be in danger of failing to meet basic obligations, such as paying staff or purchasing supplies.
A small minority of practice owners/managers said they were going without a salary to meet operating expenses, while others relied on more drastic measures.
“Prayer sometimes works, sacrifices to the Indian god of prosperity,” said one commenter. “I am not kidding, either.”
The final results of the survey will be reported in the next issue of NEWStat.