The No -- Lo Practice -- avoiding a practice worth less
Shock! Disbelief!, Owners are devastated when they learn their practices are worth only a fraction
of what they anticipated as they approach retirement and contemplate a sale. But if you can understand
why this occurs and identify if your practice is at risk, you can begin the process of recapturing
this lost value for your practice.
The AVPMCA (Association of Veterinary Practice Management Consultants and Advisors) have published
this important document which reports that veterinary practice appraisers (in the United States) have
always observed a relatively small pool of low-value practices. These generally consist of solo
practitioners delivering dated medical services from poorly equipped, marginal facilities and
producing low profits every year.
But in recent years, appraisers have seen an increase in the number of practices with no, or an
exceptionally low value (i.e. No-Lo Practices). Quite unexpectedly, appraisers are also observing a
significant change in the mix of practices occupying the low value end of the spectrum. In addition
to the normally predominant solo practices, it now also includes practices traditionally
expected to be profitable -- practices that offer quality, progressive medicine with the latest
equipment; are located in new state of the art facilities; and offer above average compensation
packages to veterinarians and staff members. Owners in these practixes may take home more than
$200,000 per year but still have No-Lo Practices.
The common thread linking all these practices is poor profitability in relation to the gross
revenue they generate. To make matters worse, most owners of these low profit practices are not
even aware of their perilous financial situation and discover the gravity of their situation only
as they prepare to put their practices on the market.
The AVPMCA concludes that 'the biggest mistake made by practice owners is to assume that all the
money they take home from the practice (e.g. salary, management fees and rent) is their return on
investment or profit'
Wherever your practice is located in the world, you can use a tool created by the AVPMCA to
determine the true profitability of your practice:
Step 1 -- download the No-Lo Practice Threat Advisory Worksheet at
http://www.avpmca.org
Step 2 -- Using Microsoft Excel, open the worksheet and print the instructions. Complete the
worksheet to determine the true profitability of your practice. If your practices profitability is
in the blue or green levels, congratulations! If however, your practice profitability is in the
three lower levels, you have some detective work to do, investigate the underlying causes and
institute the necessary sorrective measures. Need some help? -- then contact the AVPMCA for a
list of member consultants or you can click here check the list here on the Veterinary Business Briefing website
Vetstart: an innovative communication concept
Vetstart is an innovative European communication platform for veterinary students and professional
partners to allow optimal preparation of newly graduated veterinarians for your professional career
as a veterinary clinician.
Vetstart is an independent organisation supported by corporate and non-corporate partners and
sponsors who all play a role in the international world of animal health as manufacturers of pet
food and pharmaceuticals, companies providing veterinary equipment, supplies and services, as well
as publishers and organisers of international congresses and symposia.
All our partners, companies and organisations are highly professional players in their field, that
are happy to offer you support by providing science, products and services to help you make the
best transition from student to practitioner.
Vetstart membership is FREE and open for veterinary students in the final 2 years of the
curriculum as well as newly graduated veterinarians until 2 years after you graduate (registration
closes 1 year after graduation). Free membership is provided to you in return for you accepting
responsibility for providing Vetstart with the requested data, and informing Vetstart immediately
of any changes in your personal profile such as changes to your address and email and actual date
of graduation.
Vetstart International Ltd, is a joint venture between Onstream Communications (UK) and Uppertunity
Consultants (NL).
Vision: To be the leading independent international information exchange platform for veterinary
students and recent graduates with the animal health related industries and organisations. This
includes: pharmaceutical, pet food, finance (insurance and banking), architecture and design,
automobile, veterinary organisations and associations, as well as the leisure industries.
Mission: To create an opportunity for learning and exchange of knowledge and information between
veterinary (recent) graduate students and facilitate their introduction to veterinary practice
management and to companies, products and services in the animal health related industries and
organisations, by providing state of the art communication and information solutions, to benefit
all parties involved.
You can
click here to visit the Vetstart website
New CEO of the NCVEI
Extracts from an interview with Karen Felsted and published in the AAHA Trends online
magazine
The National Commission on Veterinary Economic Issues (NCVEI) has named Karen E. Felsted, CPA
, MS, DVM, CVPM as its new Chief Executive Officer.
Trends online: What is the biggest challenge facing veterinarians in the coming years?
Karen Felsted: There are several challenges facing our profession in the next few years.
The first is the national economy. Whether or not we are technically in a recession doesn't really
matter; most people are feeling some impact from the housing problems and the rising cost of oil.
That includes veterinarians as well as our clients.
The second challenge is practice profitability and the corresponding ability to ultimately sell
the practice for a good price. Practice profitability is a critical issue for all employees of the
practice, not just owners.
Another challenge is the student debt situation. New graduates simply must be able to earn enough
money to pay back their debt and still be able to live reasonably--buy a house, raise a family, etc. or
we won't be able to attract the next generation into our profession.
And then who will fill all those open positions in private, public and corporate veterinary
medicine, who will we sell our practices to and, in a broad sense, how will we fulfill our role in
society? This isn't just a new graduate problem--this is everyone's problem.
Trends online: What is NCVEI doing to address these challenges? Looking forward long-term,
what is your goal for NCVEI?
Karen Felsted: I see the NCVEI as a catalyst that helps veterinarians attain their personal
and professional goals by improving their business, economic and life skills. Every goal in life has
an economic component and all of the issues above can be addressed through the acquisition of these
skills.
The NCVEI has played a significant role in the increase in the average earnings of veterinarians
over the past 7-8 years through its SKA (Skills, Knowledge and Aptitudes) research with PDI, the
benchmarking tools available on the NCVEI website (www.NCVEI.org) and its educational outreach efforts.
The importance of communication skills in all aspects of veterinary medicine has become very clear
recently and the NCVEI has added several interactive communication modules to the tools already
available on the website.
All areas of veterinary medicine benefit from the improvement of productivity and profitability in
the private practice sector.
And finally, we want to start analyzing and mining the data currently available in the NCVEI
database. Thousands of veterinarians have entered their data into the website benchmarking tools; now
we'd like to start identifying growth and profitability drivers.
Trends online: What does NCVEI do especially well for veterinarians? That is, when and for
what purposes should veterinarians turn to NCVEI?
Karen Felsted: The NCVEI's website has a series of benchmarking tools allowing veterinarians
to enter data about the financial and operational aspects of their practices and to receive feedback
about how they compare to other veterinarians and what they can do to improve in these areas.
Customized tools are available for companion animal, food animal and equine practices. In addition,
there are tools available for support staff members to help them improve their skills and knowledge.
To date, about 15,000 practices have entered information into the data base. This continues to be a
great tool for veterinarians in understanding how their practices compare to others and what they can
to improve.
I would highly encourage all practices to enter their data. Not only does this give the practice
immediately useful information but it will give the NCVEI more robust data for the future analysis of
profitability drivers and sound business practices.
Communication skills are widely acknowledged as critical to educating pet owners, running a successful
business and, in general, improving relationships with anyone you come into contact with.
You can
click here to read the original article
CVPM Preparatory Review (North America)
July 24-October 10, 2008
This course is designed to help veterinary practice managers review the basics of veterinary
practice management. It is also a very good introduction to management concepts for new managers, or
review for experienced managers who wish to revisit the basics. The course is geared to legalities
and resources for the United States of America at this time; however, participation is not
limited to the USA only.
The course will be presented by Katherine Dobbs, a well known author and speaker for practice
management topics including overseeing VESPA (the Veterinary Emergency and Specialty Practice
Association). She has developed this review course to systematically help candidates to prepare
for this certification.
Upon completio!n of this class, attendees:
- should be able to easily recall the basics of veterinary practice management, as outlined on
the CVPM Task Analysis handout.
- should be well versed in taking multiple-choice questions similar to those given on the CVPM exam.
- should have knowledge of how to locate information and utilize study materials.
- will have built a network of colleagues through interaction with other course participants for
sharing ideas and resources.
There are no required texts for this course, however the course will follow the CVPM Recommended
Reading List which is provided by the VHMA (Preparing for the Examination - Study Guide and
Recommended Reading List) or in this course's Library once the course opens.
This class cannot guarantee passage of the exam, but is designed to aid in studying for the exam
by reviewing the information that a practice manager should know upon gaining the required years of
experience as determined by the CVPM exam application, and the completion of the recommended reading
list provided by the CVPM Study Guide.
For more information, you can
click here
to send an e.mail to the VSPN office
When You're the Top Dog - Leading like a professional or barking up the wrong
tree
by Jeff Mowatt
Judging by the way we elect some of our political leaders, you'd think that the three most
important qualities to leadership are: popularity, an outgoing personality, and loyalty to your
supporters. Coincidentally, these just happen to be the three most outstanding traits of our
overweight 6 year old Corgi, affectionately named "Sadie."
Sadie is popular with everyone she meets.
She's outgoing to the point of being embarrassingly familiar with strangers. And she's loyal
-- to us and anyone else at the park with a milkbone. Perhaps the only reason Sadie hasn't been
elected to public office is that she has breath issues.
When you are the "top dog" in an organization, there are indeed three keys to leading others that
will strengthen customer loyalty, increase spending per customer, and enhance team spirit. They
distinguish you as being a professional -- significantly more effective than amateurs who have a
title but nothing beneath the surface.
1. Harness the power of the pack.
Too often, amateurs get wrapped up in their own egos. They expect their people to support them
simply because they are the "boss". Captain Bligh adhered to this management philosophy. 'Nuff
said.
Professional leaders also have huge egos. But their pride is centered in their belief in their
people. In fact, they go as far as involving their staff in the creation of an organization
mission statement. Boring stuff? Only when some marketing person drafts it, gets the boss'
endorsement and hangs it on the wall in the lobby; never to be remembered or referred to again.
The real value of a mission statement lies in involving everyone in its creation. People discuss
why they do what they do for a living. You discover shared values and an underling purpose to work
beyond taking home a paycheque. You tap into the common bonds that are the true motivators of
the human spirit. Sound touchy-feely? Absolutely. Why else would they want to work for you?
. . . Job security? That's difficult to provide. People want to work in an environment where they
feel like they are a part of a greater good. They can be forced to work for you because you have
a title -- just ask Captain Bligh. Professional leaders think of themselves less as a boss
and more as an activist rallying support for a worthy cause.
People will support a leader who has a strong sense of mission, who's values match their own.
Captain Bligh was an amateur. Abraham Lincoln was a professional.
2. Sniff out the right information.
To a professional leader, there's no use in finding a faster way to climb the ladder if the
ladder's leaning on the wrong wall. They constantly, systematically, proactively check to make
sure their heading in the right direction. Tools they use include:
- Ask your competition. Professionals learn to innovate by discussing issues with their
competitors. Sound absurd? Join your trade association. It's filled with competitors who
recognize that none of us is as smart as all of us. Amateur leaders shun the competition.
Professionals understand that today's competitor may be tomorrow's business partner.
- Ask your customers. Amateurs think they understand their customers needs because they do
business with them. Yet, how many times have you eaten at a restaurant and decided that you
wouldn't go back? Statistically only one out of every 27 dissatisfied customers actually
complains. Amateurs wonder why business is dropping off. Professionals admit they need to know
what their customers really think. So they regularly test and verify client satisfaction.
- Consider using local business students to conduct surveys. Students get huge response
rates. Think of it -wouldn't you be more likely to answer a few questions to "help a student with
their class project?" Bonus: students are a lot cheaper than commercial firms.
- Ask your employees. After all they're closer to the customers than you are.
- Educate yourself. Amateurs are know-it-alls. They seem to believe that they are supposed
to come up with all the good ideas. Professionals rely on other peoples success and apply that
to their own practices. So professionals read books, listen to tapes, and attend seminars.
3. No tricks here
Amateur leaders ooze with golden promises and good intentions. They think that the key to being
successful is popularity. And they try to deliver on their promises. In other words, they lie
a lot.
Example: a customer asks when you can deliver something to them. You think you can get it to
them by Wednesday. The amateur's response, "I'll try to get it to you by Wednesday." But something
comes up, so delivery is delayed by one day, until Thursday. At least you tried. No big deal,
right?
Right. It's only a big deal if you had any aspirations of being respected. Professional
leaders know that their most valuable asset is their personal reputation. It's simply not worth
jeopardizing that reputation by making a commitment they may not be able to keep. So professionals
make a practice of underpromising and overdelivering.
As someone with a title, you are the 'big dog' trotting by the yard where the neighborhood dogs
are lounging. Whether you lead like a professional or an amateur will determine whether they are
motivated to run with you, or just stay on the porch.
You can
click here to visit Jeff Mowatts website
Member benefits
