Maybe money does grow on trees
The cries for help (wanted) in the veterinary workforce aren't getting any quieter. Now more than ever, paying employees what they are worth is essential. To do this, clinic owners think they need to increase revenue, which brings us to the ever-familiar catch 22: To be more profitable, the workload must increase, but if the already shorthanded and half-burned-out employees work any harder, they will quit.
How do we make more money and help decrease the workload on employees? The answer is not simply making more money; it's being more profitable.
If you have yet to learn what you're striving for, it's hard to know how far you need to go, how you plan to get there, and when you've arrived. Most veterinary practice management systems (PIMS) will allow you to pull information to get a clear picture that helps you monitor performance and make decisions. I'm a big believer in involving your team, but please remember, most veterinary teams aren't highly motivated by money—which brings me to my next point.
Give your staff goals they are interested in
These need to be attainable, specific goals that can be measured and celebrated when the team is on track. It could be increasing your dental cleaning numbers from five to six a week so more pets are in less pain. It could be boosting your forward-booked appointments from none to 25%. It could be getting 50% of the clients you speak to about parasite prevention to protect their pets instead of the 40% you hit last quarter.
Give the team a reward for reaching the goal—and please make it better than a pizza party! Have them vote on what they'd like from some suggestions you come up with, and then hit your vendors and reps up to help pay.
Make your people your top priority
A recent Gallup study revealed that highly engaged teams are 21% more productive, and 69% of employees would work harder if they were better appreciated. It's time to turn up the employee retention and engagement strategies to 11!
For more information on how to keep a more satisfied staff, check out my other blog posts on promoting a gossip-free culture; involving the whole team in brainstorming solutions; and creative ways to show team appreciation.
Stop missing charges
The average clinic is estimated to miss 5%–10% of charges. This means a practice making $2.5 million in annual revenue could miss out on $250,000 each year! So remember to invoice that blood parasite test, medical progress examination, and IV fluid pump usage.
Using the AAHA Chart of Accounts can help you compare expenses to income. Investigate and make adjustments if a category isn't profitable enough or if expenditures went up but revenue didn't. Other strategies include bundling charges and using virtual travel sheets (even better if they integrate into your PIMS invoice system).
Cover the basics
Are all your patients vaccinated and following your parasite prevention plans according to your recommendations? Be sure you're collecting this history from clients when they bring in a new patient—even if they need to guess—and do whatever it takes to get this into your database. Then, make sure you have a rock-solid reminder system, giving owners options for email, text, and/or snail mail. All of this can be automated with apps that integrate with your PIMS.
Reduce your cost of goods sold
Inventory is one of the most significant expenses in the hospital. If you spend more than 25% of gross revenue in this category, you have some work to do. The biggest culprits are typically too many kinds of the same products (think three different heartworm preventives on the shelf); too much of a product (we have enough stock to last until 2040 so we never run out); and no budget or ordering system in place.
If you don't have time to figure out how to fix high COGS, I recommend working with a company like Veterinary Care Logistics. They can help you develop a system that will work for you, no matter how short-staffed, and save you time and money.
Know what's most profitable and make sure your prices are in line
Figure out what you sell the most and make sure those products and services have a reasonable pricing structure that maximizes profit for the clinic while being fair to clients. Inflation and inventory price-increases have kicked our butt the past few years, so adjust prices accordingly. The days when a 3% price-increase per year was enough have passed.
Expand your minds
Does your team know all the services you offer and why you offer them? The more your employees know, the more they will educate your clients, increasing compliance and your bottom line. This is a win-win for increasing profit and getting patients the care they need. Remember to teach your team how to talk to people! It's sometimes the most challenging part of the job.
You don't need to do everything on this list to increase profit. Pick the one that will be most successful for you and start there. By taking the time and effort to develop ways to work on your hospital's financial health, you'll set yourself and your team up for long-term success.
Photo credit: © pepifoto E+ via Getty Images Plus
Jenn Galvin owns and manages Advanced Animal Care, a companion animal hospital located in Arizona. She has been in the veterinary industry for over 25 years, and she is a true nerd at heart, with a passion for staff development, inventory, and veterinary financials.
Disclaimer: The views expressed, and topics discussed, in any NEWStat column or article are intended to inform, educate, or entertain, and do not represent an official position by the American Animal Hospital Association (AAHA) or its Board of Directors.