December 27th, 2010 by Dr. Dean Severidt
What Separates Veterinary Clinics XXXIV
Since the recession hit us a few years ago, I don’t think that there are too many veterinarians that haven’t been affected in one way or another. Profits are down and client numbers are down all across the country. This means that there are more veterinarians competing for less work. Will this affect prices? I believe so, since everyone has to stay competitive and some will have to lower their prices. The bottom line is that the clinics that watch their bottom line and stay profitable will continue on the road to success; however, the ones that just do business as is will fail. I predict that we will see veterinary clinics closing over the next few years and that is something that has not happened in the past.
When we start looking at expenses, there are only a few places where we can cut costs. Many of our expenses are fixed and the two variable ones that we can cut are payroll and inventory. Payroll is always a big one and I believe that most clinics are overstaffed. This is also the hardest area since we have to look at an individual and tell them that we have to let them go because we simply just don’t have the work. Whether we try to be tough or not, it is always hard to let people go. Someone’s life is affected when this happens. How about inventory? Is there any way to make cuts there? We looked at that a few years ago and we were running around 18-19% of our gross monthly in inventory. Most experts say to keep it around 18% so I felt like we were okay. However, I made a decision that I wanted to cut here first, so we cut our inventory down to 14%. We have stayed there for two years consistently and are not out of products that we need. We did over $3 million in our practice last year; therefore, a savings of 4% in inventory amounted to around a $120,000 savings in one year, without affecting any lives or our practice in a negative way.
I am sure many of you are saying that this is impossible. What we did is we decided on one type of heartworm and flea prevention each to carry. We had been working on this anyway, so it was an easy transition. To me it makes more sense if you tell your clients what to use and why rather than having a smorgasbord of products for them to choose from. Who is the expert, the veterinarians and staff or the client? The good news is that now distributors are willing to ship products directly to clients, so when we get that client that insists on a specific product that we do not have, we can have it directly shipped to their house for the same cost. We get the sale and no inventory. We also as a group of veterinarians decide on what antibiotics we will carry and don’t overlap on types. We only carry two antibiotics and the same with anti-inflammatory drugs. We limit our shampoos and food so that everyone understands our products better and that makes them much easier to sell. This has been an easy transition. Furthermore, with fewer products, there is less chance of an employee accidentally putting some in their pocket on the way out of the hospital. Would you rather let an employee go or have less inventory that is costing you money until it moves off of your shelf? Carry less and be the expert on the products you have and watch your bottom line grow.
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November 23rd, 2010 by Dr. Dean Severidt
What Separates Veterinary Practices XXXIII
What is going to be the key ingredient that separates practices that have success and ones that do not as we head out of the recession and into new times? I believe that veterinary medicine, as we know it, is about to make some very significant adjustments, just as human medicine did years ago. Clients are going to demand certain services and demand more affordability than ever before. Clients are used to seeing discounts everywhere they go and even if they look at their pet as a family member, they still want the best for less. Look at what happened to optometrist’s years ago. They went from charging inflated prices for glasses and giving away exams to losing the sale of glasses and going back to exams. As veterinarians, we need to wake up to the fact that anyone can give vaccinations in the public’s eye and anyone can sell a product. What would your practice look like if you lost vaccine and product sales?
To combat these changes, we as veterinarians have to focus on customer service. Everyone talks about it, but listen closely to a group of veterinarians talking and they really have no idea what customer service truly means. I was just at a meeting of large clinics and we were talking about this subject. One gentleman said that he would “show” his clients if they wanted to purchase their pet’s medication through an online pharmacy, he would make their life miserable and charge them a prescription fee. Although there is nothing wrong with a prescription fee, take a look at his attitude: I will “show” them, when actually they will “show” him as they go elsewhere. Another one said that if a client calls after 4:00, even if the clinic is open until 6:00, since it slows down at 4:00, they will not get vaccines at his clinic, and even if the animal is sick and wants to be seen, he will refuse and make them go elsewhere. That is not only poor customer service but also extremely poor business because now not only does he not get vaccines, but he gets no business at all.
I never understood where veterinarians got the attitude that their clients owed them something. I always thought that I owed the client everything for giving me the opportunity to service their pets and put that much trust in my staff and me. The veterinarians that truly take care of their clients and provide what their clients want will be the successful veterinarians of the future. It is time for veterinarians to lose their ego and understand that this is business and we better treat people as they want or they will find someone that does. When the two gentlemen were telling the group of how tough they were going to get, I just laughed to myself and thought: I am in the same area of town, so I guess as you “show” them, we will take care of them.
Tags: customer service, veterinary management, veterinary practice growth
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November 4th, 2010 by Dr. Dean Severidt
We have been talking about being untouchable as a leader. Always be above reproach; employees will never lack respect for someone who is above reproach. Now I want to talk about failures and successes. This applies to the business as well as to you, as a leader on the personal side.
What if you have failed along the way in actions that you took or behavior that you allowed for yourself? Chances are that you probably have unless you happen to be perfect, but I believe only Jesus ever got credit for being perfect. All of us fail in our actions at some time or another. Sometimes it is minor and can quickly be repaired, but sometimes it may be a major event that is going to take time to repair. All that you can do at this point is be honest and admit your failure, take full responsibility for it, say that you are sorry and truly mean it, and then start to repair matters and change yourself so that you do not commit the same bad behavior again. Why are people right now so against politicians? I believe that our Congress, which has the lowest approval rating ever of only 11%, is because they refuse to take responsibility for their actions and refuse to be honest. When people see these statistics, they don’t trust them. Most people are very forgiving; however, they expect you to admit your wrongdoing, sincerely apologize, and then take actions to not repeat your bad behavior. We as leaders of our veterinary clinics need to do the same. If we have done something wrong, then take responsibility for it and admit that you were wrong. Just be honest. If you lie and try to blame others, you will lose all of the credibility that you have.
The good news is that when you do this, (and it can be very tough), but when you do, the results can be absolutely incredible. Most failures, when approached honestly, will lead to great things to come. Once we are able to admit our weaknesses and correct them, we become stronger and earn more respect as a leader. Ask anyone who went through a terrible time in their life and got through it and see if it wasn’t the best thing that ever happened to them. We can be stubborn and sometimes we refuse to change until we have a major incident occur that makes us change, and then our lives accelerate because of it. Next time we will talk about failures and success in the business realm.
Tags: Leadership, veterinary management, veterinary practice growth
Posted in Culture, Growing Your Practice, Leadership, Management | 2 Comments »
October 29th, 2010 by Dr. Dean Severidt
We have been talking about how important communication is to having a successful veterinary practice. People need to understand what we are offering and feel comfortable about what services we want to provide for their pet. Unless we communicate this message in terms that they will understand and unless everyone communicates the same message, we will not perform as many services as we possibly could. Now I want to talk about being untouchable as a leader.
Something that most of us do not think about is the question are you untouchable as a leader? Are we consistent in our message and are we of the character that people respect and makes us above board with our employees? All of us make mistakes; there isn’t anyone on this earth that hasn’t ever made a mistake. I believe there was only one perfect man, Jesus, and since Him, we have all had failures. What we are talking about here is your message and your character. Does your message change from one employee to another, do you have favorites that can get by with more than others, and does one employee always get their way and the others you never pay attention to their input? Many of us have these tendencies but we all need to be consistent across the board. If we aren’t then we become touchable because now employees can put each other against us as leaders and other staff. Always treat everyone the same and certainly do not show favorites. Many of us show favorites and don’t even know it. So ask your employees if you are fair to everyone; they will be honest.
How about your character? Is it above reproach? Do the things that you would want your leader or boss to do. Maybe it isn’t the best thing to go out and party with employees. It is hard to be “buddy-buddy” one minute and boss the next. I have never socialized with my staff. If we have a party or get together, I always go with my wife. We simply make an appearance and then leave. I also do not drink with or in front of my staff. Never meet with an employee, especially one of the opposite sex, without someone to witness the meeting. This way nothing can be interpreted wrong. If you have done things you wish you hadn’t and lost some credibility, change what you are doing. People are naturally very forgiving, but do not continue your behavior and expect things to change. Just always do things that people can never come back at you with an action against you. Always do what cannot be misinterpreted. Thus, if you have the best intentions at heart, people won’t misinterpret you.
Tags: communication, Leadership, owning veterinary clinic, veterinary management
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October 27th, 2010 by Dr. Dean Severidt
Formation of Leadership XXXX:
Last time we talked about how to handle things when the practice is slow. Do you complain to employees or do you lead and give them a vision of what is to come? This is a time where true leadership shines through. If you are looking at your P&L during a slow time, can you find places to make cuts? If we look, we can all get lazy and not watch things as close as we should. I would look over the P&L, make the simple cuts first, and then get as lean as possible. However, unfortunately these are usually not enough to make a large difference, so now you must look elsewhere. The two large places that we can find areas to cut are: employees and inventory.
How many of you know what your employee numbers are, what percentage of gross, and the exact number or percentage of inventory is on your shelves? I would venture to guess that most would be shocked at how much waste that exists in these two areas. We can cut back and not affect the clinic or care of animals at all. I have gone into clinics where I was told they ran 18% inventory; however, when we really looked at it many times, it was over 22%. Take that extra 4% times a monthly gross of say $100,000 and that is $4000 a month of waste. Many times we just go ahead and order that antibiotic or anti-inflammatory that the doctor wants; however, this all adds up. We have a policy where no new products are ordered without a mutual agreement of the doctors where they want to use this product and eliminate another. I do not have ten different antibiotics or anti-inflammatory products on the shelf. We carry a few antibiotics and none of them work in the same way, and then we carry two anti-inflammatory products. We also do not carry every flea and heartworm preventative available. I am amazed at veterinarians that say I have to carry all of them because people ask for them. Why not carry one and have your staff 100% up to date on that product and then educate your clients as to why they should use that one? I never knew that the client knew more than the veterinarian. By following these steps, we have kept our inventory at 14% for over a year now. Most experts say 17-18% is ideal, but in my opinion that is way too high. Once again, run your practice like a business; this does not mean inferior care but just being careful as to what sits on the shelf and then is wasted. Next time we will talk about how to keep your employee numbers down without affecting your care and which employees should stay and which ones need to go.
Tags: inventory control, veterinary management, veterinary practice management
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