Today's Veterinary Business

AUG 2018

Today’s Veterinary Business provides information and resources designed to help veterinarians and office management improve the financial performance of their practices, allowing them to increase the level of patient care and client service.

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63 August/September 2018 • TODAYSVETERINARYBUSINESS.COM Uneasy street A seat-of-the-pants approach isn't the way to run a practice. You need to construct a detailed strategic plan and then dedicate time to implementing it. As her remark settled in and the partners' attitudes shifted from aggression to dismay, one of the veterinarians volunteered, "Flying by the seat of our pants as owners and managers obviously hasn't been working, so now what?" That was the million-dollar question, or in this case the $2.1 million question. Practicing Practice Stewardship Whether it's practice owners with whom I've collaborated, questions I've fielded from aspiring practice owners as I taught at veterinary schools or wrestling with the concept early in my career at my practices, the temptation to fly by the seat of our pants and hope for the best is not a new one. As the five of us sat in the room and debated next steps, the concept of management through Key Performance Indicators (KPIs) and not by the seat of the pants was cautiously floated. To some, KPIs and financial management are all about the money. To me, it's about practice stewardship. As practice owners, we are ultimately responsi- ble to our patients, clients, staff and their families, as well as to ourselves and those who depend on us. Intentional practice manage- ment starts with identifying why we do what we do, then putting a plan in place to achieve it. It's a process known as strategic plan- ning, and if you're not doing it you probably should be. In January, a medical director, practice partner and I sat down and wrote a strategic plan for a hospital. This step might sound intimidating, but it needn't be. If you haven't written out your goals and a plan for achieving them, consider following these six steps: • Identify your hospital's mis- sion and values. These will direct everything else you do. • Review the year prior and perform an analysis to iden- tify your practice's strengths, weaknesses, opportunities and threats (SWOT). • Identify what's important. (See No. 1.) • Define what you want to achieve. • Determine who is account- able for each goal. • Review consistently through- out the year. After you determine where you are and where you want to go, it's time to measure progress. I'm sure you've heard, "You can't track what you don't measure." What practice owners track might vary based on their strategic plan, but most of us should at least include: VetPartners Corner Daggers were shooting out of the eyes of the four veterinary hospital partners. You could have cut the tension with a butter knife. I was there as an impartial facilitator after the partners discovered through a professional valuation that the business representing their blood, sweat and tears was worth basically the ground it sat on and the tangible assets inside. Each blamed the other. Finally, with an exhausted gasp, the majority owner proclaimed: "I didn't sign up for this. I just want to practice medicine and take care of my clients. The money is supposed to follow." By Stith Keiser • Budgets. • Balance sheets. • Profit and loss (P&L) statements. • Practice information management system reports. • Medical ratios. Before we delve into each of these, you probably fall into one of two camps. Camp 1 This group tends to consist of new practice owners who are so over- whelmed with all that ownership entails that they are busy working in the business and not on the business. Many seasoned practice owners fall into this camp. The four owners with whom I was in the room with pitched a tent here. These are the people who show up, practice medicine, oversee their staff and are content with the fact that money comes in, bills get paid and they pay themselves a reason- able salary. Camp 2 Two groups are present here. The first is made up of individuals in Camp One who have a few more years of experience. They dream of retirement, sending their kids to college and traveling with grandkids. However, they neglect- ed to manage their dreams with intention. The second group is a cross section of us all — those who realize that while we didn't enter the profession to be small business owners, we are, in fact, just that, and our patients, clients, team and families depend on us to build a sustainable practice model. Different Perspectives Think about what sustainable prac- tice profitability means. When I poll veterinarians, they usually connect practice profitability with: • The ability to achieve their hospital's mission: "No profit margin, no mission." • Patient care. • Wellness. • Reinvestment into the clinic — equipment, hospital up- grades, continuing education.

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