By: Michelle Jara, MBA, LSSGB
Do You Know Where Your Practice Stands?
If you are like any other Practice Owner or Manager, your day consists of an intense balancing act between pleasing your clients, supplying exceptional patient care, supporting your staff, and trying to find a break in the day from the madness. You spend your day continually putting out fires. Inevitably, your to-do list keeps growing and that production report you wanted to review gets placed on the back burner. All the practice goals and projects you wish to carry out remain unfinished quarter after quarter. Sound familiar? You are not alone.
Unfortunately, this is an all too familiar scenario for many leadership teams. It is no surprise that one of the challenges practice owners and managers face is keeping their finger on the pulse of the practice. According to Traction: Get A Grip On Your Business (Wickman, 2014)1 the five most common frustrations of running a business are a sense of lack of control, managing people, low profit, little to no growth, and the “nothing is working” feeling. Often, it can feel like it is impossible to know how your practice is doing due to the complexity and dynamics of running day-to-day operations.
Your practice is very much an entity that requires attention, care, and resources to support its sustainability and propel growth. Additionally, you must ensure your practice is readily able to adapt to changing times. You must have business skills and processes in place. The question is, how you can do this in a realistic way that will help your practice reach the next level and sustain continuous success? How can you manage your time? How can you hold your team accountable for achieving practice goals? Where do you even begin? Before answering these questions, you must start by understanding the basic components of your practice.
Understanding the Basics
To run a successful practice, owners need to be able to balance both the business and the medicine. At Veterinary Growth Partners, we have identified the following areas as basic components of business success within a practice: strategic planning, leadership, operations, finance, inventory, human resources, client care and patient care. These areas make up the pulse of your practice and should be continuously monitored.
Strategic Planning: The foundation for practice success is strategic planning. It sets up the platform for your way of doing business for your primary stakeholders (clients, patients, and staff). Strategic planning is merely stating (both on paper and verbally to your team) where you want your practice to be in five years, three years and one year and includes components such as your purpose, and values. Once established, you will be able to create a clear roadmap for accomplishing those goals. The problem lies in that most veterinary businesses fail to communicate a clear vision or plan to their primary stakeholders. This is where having a defined strategic plan comes into play. By defining a strategic plan for your practice, you set your practice and team up with parameters for success.
Leadership: It is no surprise that poor leadership directly contributes to poor performance by employees. In the veterinary industry, average turnover rates are almost 30%, double the national average across all industries in the United States. As a profession, we cannot afford to lose staff at this rate. Poor leadership, such as lack of communication skills or emotional intelligence, directly affects team productivity and satisfaction. Practice administrators need to recognize the need for effective leadership and seek methods to continuously develop leadership skills. Effective leadership will have a long-term impact on an organization’s success.
Operations: How you operate the day-to-day business of your practice can make or break practice success. Operations are the way you provide your services to your client. Some key functions of operations include delivery, production, quality control and service of your product. It is important to implement a process to manage operations and keep them running effectively and efficiently. This includes having regularly scheduled leadership and staff meetings, developing processes for regularly identifying and solving issues within the practice, and implementing standard operating procedures for daily operations.
Finance: Having a firm grasp on your financials is a no-brainer when it comes to running a successful business. While the goal for a well-managed practice is to have at least 20% EBITDA (Earnings Before Interest, Taxes, Depreciation & Amortization), most veterinary practices operate within the 5-9% margin. To ensure your practice is financially viable, it is critical to use a proper system of accounting, implement a detailed chart of accounts, set a budget, and regularly monitor key performance metrics.
Marketing: It’s no secret that competition within the veterinary market is fierce. With instant access to the internet, social media, and online reviews, potential clients can learn everything they need to know about your practice in a matter of minutes without ever making a phone call. With so much competition, it is essential that your veterinary practice stand out amongst others. You must ensure your marketing efforts are telling your story. To attract and keep new clients, it is important to identify who makes up your target market, what makes you different from the other clinics nearby, and what is the one thing you do better than everyone else. With this targeted marketing plan, you can present your services in a way that directly speaks to your ideal clients and create a consistent experience that will keep them coming back for more.
Inventory: Maintaining inventory within the practice is a delicate balancing act between ordering too much and too little. A well-managed practice should aim to keep their total costs of goods sold (COGS) under 20% of revenue. To achieve this, it is critical to have key inventory processes in place to successfully manage your inventory. Reorder points and set markups should be established for all inventory items along with a process to prevent inventory shrinkage such as ABC analysis and inventory cycle counts.
Human Resources: How do you set your staff up for success? HR is more than W-2s, I-9s, enforcing policies and processing payroll. HR also plays a vital role in successful implementation of your strategic plan. As hiring is often a major part of the HR function, it is critical to review, screen, and select employees who exemplify your core values. As the practice continues to grow and evolve, a process for auditing and maintaining your organizational culture and should be in place. Having an effective in-house human resource management process is crucial in setting your employees up for success who will in return give you their best performance and commitment.
Client & Patient Care: Exceptional client and patient care defines your business and sets your practice apart amongst others. It is important to ensure all members of your staff have the qualities and skills required to provide exceptional client and patient care. The key is to create a consistent delivery of services. Hospital administrators should regularly solicit and measure client feedback, respond to complaints in a timely and efficient matter, and create a system to monitor and recover non-returning and inactive clients. Your practice should implement illness and wellness standards of care and have programs in place that encourage lifetime wellness for your patients. Furthermore, all staff should be required to complete continuing education seminars and lectures to ensure current medical knowledge, clinical acumen, and judgment.
Bringing it all together-Pathway Planning: A Roadmap To Success
To implement any successful change within your practice, you must be able to create quantifiable goals to monitor your progress. Continuous check-ins with your leadership team and staff will keep your practice aligned with your strategic plan. By implementing a process to consistently audit the key components of your practice, you will be able to keep your finger on the pulse of your practice and keep pushing towards your long-term goals.
All businesses need specific skills, tools, resources, and a system to perfect the team and the delivery of services. Your veterinary practice is no exception. This is where Pathway Planning steps in. Created by Shawn McVey, Chief Culture Officer of Veterinary Growth Partners, Pathway Planning is an operating system for your practice. It is a step-by-step method for diagnosing and assessing the business health of your practice and then creating a “treatment plan.” Pathway Planning identifies and teaches you the specific skills you need to put the plan into effect to achieve your long-term practice goals.
It takes two to four years to truly transform your practice, however, by implementing a Pathway Plan you will be given the tools and resources necessary to implement change not only efficiently and effectively but also permanently. As an Elite member of Veterinary Growth Partners, you can work directly with a Practice Coach who can help you develop your own Pathway Plan to success. By implementing a Pathway Plan, creating goals directly tied into your mission, and keeping your pulse on your practice, you will gain a competitive edge by providing consistent and reliable services in a way that your ideal clients will value. This will result in higher profitability, happy clients, and healthy patients!
VGP has the following to support your practice:
Veterinary Growth Partners is a membership organization that helps transform practices through proven processes and new innovations. VGP will help you accelerate the vision that you have for your practice, and impact how your practice operates, serves clients, and makes business decisions. All of this results in performance improvements in every aspect of your practice. By offering different membership levels, VGP and VGP Elite, VGP can offer an array of unique benefits to fit your practice and needs. VGP has the following practice management tools to support your practice:
Preferred Pricing: Thanks to the buying power of more than 5,000 independent hospitals, we can negotiate with our partners to provide you with exclusive savings on the things you buy most often: pharmaceuticals, reference lab, equipment, and medical supplies. The preferred prices we achieve for our members are based on long term agreements with best-in-class companies. This benefit is available to both VGP and VGP Elite Members.
Education & Best Practices: With continuing education in veterinary medicine a requirement in every state, there is no shortage of medical courses available. What is not as readily available is training and education on all the critical components of running a successful practice- except, that is, through Veterinary Growth Partners. Our training and education programs are wide-ranging and robust. We have frequent workshops, exclusively for VGP members, on practice assessment and improvement. We offer substantive online courses that have been tested and proven in many practices. We also provide web-based, peer-reviewed continuing education for veterinarians and paraprofessionals. This benefit is available to both VGP and VGP Elite Members.
Dedicated VGP Coach: Practice Management Consulting, via practice coaches, is available to VGP Elite members. The practice coach will work with you and your team members to help you improve your operations and increase your profitability. Topics assessed and addressed are core issues for any practice owner or manager.
Inventory Management Tools: By running an Inventory ABC Analysis, we can help your practice identify opportunities to decrease expenses increase revenue and increase profitability. This report, available to VGP Elite Members, can help you identify redundant items or those that have low turnover rates, costing your practice money. It also creates specific reorder points and recommendations to make the most of your inventory by ensuring that your inventory is generating appropriate revenue by reviewing sales, markups, and margins.
Financial Management Tools: At VGP, we can help you identify opportunities to decrease expenses, increase revenue, and increase profitability! By completing a financial analysis, a VGP Practice Coach will analyze your Profit and Loss Statements, compare to industry benchmarks, and create a custom plan for your practice. You will work together to set financial goals specific to your practice to lead to increased profitability. This service is available for VGP Elite Members.
Marketing Tools: Target new clients and your best with tools that drive growth and measurable ROI. We have partnered with Social Ordeals to create a unique practice analysis that will help you spend marketing dollars wisely and create goals based on specific needs. For the analysis, Social ordeals will perform an audit of your online presence, giving you a snapshot of how you are performing in the digital world. Your VGP coach will then do a deep dive into your community to help connect your brand to your audience. Then, we will review 3 of your local competitors to see how you measure up. We will study your SWOT, so you can stand out for success. This service is available for VGP Elite Members.
Valuation & Succession Planning Services: Where are you today? What is your practice worth? Valuation and succession planning meetings are available for VGP Elite members. Through a detailed review of your financials, your VGP Practice Coach and Pathway Vet Alliance Team will evaluate where you are today and discuss a strategy to achieve your long-term goals.
VGP’s goal is to help YOU succeed in all aspects of your veterinary practice. A Veterinary Growth Partners membership will help you reap rewards for your business. To learn more about how to become a VGP member, call the VGP Customer Service team at: 800.577.0120, E-mail: firstname.lastname@example.org or sign up online: www.vgpvet.com/signup. Also check us out on Facebook, Instagram, and LinkedIn!