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.

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.

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.

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.

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.

The manager must be able to understand the importance of inventory as an asset. Mishandled assets result in the loss of profits. Losses may come from incorrect mark ups on the drugs or extended shelf life, which will mean they will be disposed of rather than used. Procedures proven to be effective in managing veterinary inventory control include monitoring the supplies and medications used and ordered on a consistent basis. Frequent communications with the distribution companies, meeting with the sales reps and customizing the order schedule help reduce excess overhead and may help in receiving better pricing.

Inventory control management is only part of the big picture. As the practice grows, the manager’s duties expand. Managing the inventory becomes a task for other staff members, taking time away from their other duties. For successful growth without losing control of expenses, it is crucial to have a veterinary inventory control system that will track and manage this asset. Systems that are fully integrated into existing management software are instrumental in improving cash flow and profitability. Strong inventory and costing systems allow the veterinary manager to analyze the trends and manage the business more efficiently.

Protocols for ordering, receiving and stocking the inventory can be tailored to meet the needs of the practice. The results are reduced inventory costs. These systems are developed to encompass all areas of veterinary inventory control. Some have the ability to connect to the distributor for automated ordering. Others allow for bar code scanning of supplies to ensure loss is minimized. Reporting options allow the manager to analyze all aspects of inventory and its overall effect on the business. Efficient inventory control not only helps reduce costs for inventory, it streamlines and automates processes that would normally require dedicated personnel.

I believe from experience that the number one common denominator that most veterinarians lack is their people skills.  This is their ability to relate to and communicate with clients.  I have overheard veterinarians talking to clients in rooms and can pretty much guarantee that the client has no idea what they were just told. So why would they approve a procedure that they do not really understand? I have learned from firsthand experience as well as watching other veterinarians, that going into a room and talking on a level that the client understands will pretty much always result in the client opting to perform the procedure. Although the old school veterinarians may have not been the smartest people in the world, many of them are extremely down to earth people who are dedicated to their profession and do not feel superior to anyone; this allows them to relate to people at their level. Today I think that schools put so much emphasis on grade point averages that many of the young veterinarians that come out of school are very intelligent. However, although, they are way smarter than I ever dreamed of being, they cannot always relate to people. They can diagnose just about anything and everything, but they cannot explain it or simply will not explain it in simple terms to a client; therefore, leaving the client frustrated and unhappy with the services.  I believe that many do this because they feel so superior to their clients that they have to talk in this way in order to build themselves up.    I hear them complain about how dumb clients are, yet they can be so self absorbed that when it is 6:00 and time for them to go home, they will leave whether someone is standing in the waiting room or not.

I have never put any significance on grade point averages when hiring someone.  My philosophy is that anyone that can get into and get through veterinary school is given the opportunity to be a good veterinarian.  I look for people that can talk simply and do not present themselves as someone special, but just are who they are.  They should carry themselves with confidence but not be condescending.  They will stay for people that are late because they understand that they are doing this job for the client and the pet, and not just for themselves.  Do not get me wrong; there are a lot of good veterinarians coming out of school today, but some lack so much professionalism which carries over and they cannot do the job that someone else can.  Indeed, some knowledge is important to be a veterinarian; however, listening to people, understanding their needs, and truly caring for them and their pet will be much more successful than the smartest person in the world that cannot relate to clients.

If you are unable to view the embedded video, click here .

If you are on the fence on whether or not to convert your practice to a paperless practice, then now is the time.  The hardest part is just doing it and once you do, I know you won’t regret your decision.  Has your veterinary practice recently gone paperless?  I would love to hear about it.

Increased information, technological advancements and shifts in focus all affect the success of a veterinary practice. As a result of these changes, many owners are beginning to rethink their business philosophy. The question remains, where to start? If a business plan was created when the practice started, this may be a good time to review it.  Have the goals changed? Consider the original plan and begin noting the changes and updates. A fully functional business plan with a mission statement and goals clearly defined will provide focus and help with decision-making process when updating different aspects of the business.

If the veterinary practice has not yet become computerized , it is time begin planning for the proper implementation strategy. Technology will help increase productivity of staff members and streamline processes. Software packages developed especially for the industry will help with inventory control, billing, medical records and marketing. Profitability is enhanced as more can be done in a shorter time with fewer staff members. The reporting capabilities that are included help owners and managers monitor the increased efficiency and enable them to modify processes to help reach greater levels of profitability. Inventory supply versus demand, overhead costs as it relates to revenue and the per client expense can all be monitored.

Five and ten year plans help keep the focus in line with current business needs and often are created with an exit strategy. Partnerships, satellite offices, and real estate investments are frequently included in long-term plans. A focus on customer service is at the foundation of

veterinary practice success. On-going communication with clients, updated care techniques, and on-site services contribute to superior service levels. Practices that excel in this area retain a larger percentage of clients and are referred more frequently. Building a loyal customer base ensures sustainability. It also maximizes marketing dollars and stimulates practice growth.

Despite specializing in a few areas, it is best to continue offering a full range of services. Many clients prefer to have all of their needs taken care of by a single veterinary practice. This convenience will help retention levels. Ongoing internal communications are also required to maintain superior customer service. Standardized job descriptions that are updated as the practice grows and changes ensure everyone understands their roles and how they contribute to the business. Performance appraisals provide objective feedback to continue to increase productivity levels.

Many people ask me “How do I go paperless?” and I just say "do it".  There is never a good or bad time to do it you just have to make the decision to do it.  The first thing is I would make sure you have a computer system software management package that will allow this.  I have used the old PSI (Cornerstone) dos version, E Friends, and now currently using DVMax .  They all worked for me but I believe DVMax is the best medical record of any of them.  There are a lot of software packages and I am sure that most of them will allow this today.  You then need to decide what to do with all the old records.  You can use both systems till you have your paper files empty and every time someone comes in scan all of the records into a file.  The other possibility is to scan all records from then start.  The problem with this is you may scan a lot of records of clients that may never come back again.  Remember anything you do not scan has to be saved somewhere for 7 years.

Most of the programs today take blood work results from in house or from an outside laboratory and download them into the medical records.  There is never a chance of blood work being lost or misplaced.  When someone has a question for a Doctor about a patient the Doctor can go in the record from any computer and look it up while he/she is talking to the client.  A receptionist doesn’t have to put the client on hold, pull a file, find the Doctor and give him/her the file, and then wait while the Doctor goes through all the paper work.  Most of the programs put charges in as you enter medical records so fewer charges will get missed.

The advantages far outweigh the disadvantages and so I don’t know why everyone doesn’t go paperless.  I assume soon it will be mandatory for clinics to be paperless.  It doesn’t do a patient any good if there are multiple pages of records that no one can read.  Make a decision to change and go paperless and you will agree it will be one of the best decisions you have ever made in your practice.