Today's Veterinary Business

FEB 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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48 Today's Veterinary Business Leadership Leadership Let's back up first. I am no economist. Far from it. Before starting my business, I barely understood the concept of buy- ing something at one price and selling it at another. But reality quickly set in when the calcula- tor came out. I was "marking up," simply adding whatever I wanted to the price of the item, thinking that was my profit margin and calling it a day. Turns out there was a lot to learn. I was upset that I had been leaving real dollars on the table by taking the wrong approach and using an incorrect pricing model. But once I learned the difference, things became crystal clear: It's all about the margin at the end of the day. Don't let any- one tell you otherwise. Basic Math The understanding started for me when I refreshed myself about how percentages work. When you Bon Jovi, a band from my native New Jersey, has an anthem that starts off, "It's all the same, only the names will change." Great tune, but unfortunately, it's not all the same when it comes to markup and margin. The two terms, each a measure of profitability, are not interchangeable. The reality is that most businesses use them as such and in the process cost themselves huge profits. If you don't know the difference between markup and margin, your revenue might be taking a hit. By Dan Truffini price is not always The

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