January 2023

Strategy in Veterinary Practice

Short and long-term strategy - and why it is important in veterinary medicine

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Strategy. We all need a plan to move our metrics in a positive direction. Of course there is always a chance that the universe will provide - but thoughtful innovation and strategy are the keys and foundation to short and long-term success. A well-crafted financial strategy is essential for the long-term success of any veterinary practice. It is important to remember that a financial strategy has to also include short-term goals too. This approach ensures that a practice is able to meet its immediate needs while also working towards a sustainable and profitable future.

One of my favorite books on understanding accounting is "Financial Intelligence: A Manager's Guide to Knowing What the Numbers Really Mean" by Karen Berman and Joe Knight. One of the key take away points is the importance of understanding how to read a Profit and Loss (P&L) statement. This statement provides an overview of a practice's income and expenses and is a crucial tool for monitoring the financial health of the practice. By understanding how to read the P&L, veterinary practice owners and managers can identify areas where the practice is overspending and make adjustments to improve profitability. When I am talking with new veterinary managers, equate a P&L to a patient's blood work. The values tell us the health of the patient, just like the P&L tells us the health of the practice. Both can be changed with intervention.

Another important aspect of a financial strategy is incorporating pet wellness programs. I know I spoke about this in one of my previous articles, but it bears repeating. These programs can include preventative care, vaccinations, and routine check-ups. By proactively addressing the health needs of patients, practices can reduce the number of costly emergency visits and increase customer satisfaction. They also provide a long-term strategy for the practice financially, as clients that utilize pet wellness programs tend to also spend more time and money with the practice.

As we evaluate the P&L, one of the areas I check first to improve the short and long-term strategy is eliminating employee debt. Most hospitals have a policy on how much of an employee discount associates get - but very few have a written policy on the expectation of when that discounted rate gets paid. High levels of employee debt can lead to increased stress and decreased productivity for the associates. And for the practice it can eat away at your profit margin. By providing financial education and resources, practices can help employees to better manage their debt and improve their overall financial well being.

Of course, increasing order counts and driving revenue are also crucial components of a financial strategy. The strategy is developed in the "how." How are we going to increase order counts? How are we going to drive more revenue? We can achieve it through effective marketing and sales strategies, as well as by providing a high level of customer service. But the core solution relies on a passionate and engaged team that understands the hospital's vision and operational goals. If you want more information on this topic, check out these books:

• Practice Made Perfect: A Guide to Veterinary Practice Management

• The Art of Veterinary Practice Management 2nd Edition

• Practice Made Perfect: A Complete Guide to Veterinary Practice Management

In conclusion, a well-crafted financial strategy that incorporates both short-term and long-term goals is essential for the success of any veterinary practice. By understanding how to read a P&L statement, incorporating pet wellness programs, eliminating employee debt, increasing order counts, and driving revenue, veterinary practices can ensure their long-term financial stability while meeting their immediate needs. "Financial Intelligence: A Manager's Guide to Knowing What the Numbers Really Mean" by Karen Berman and Joe Knight is a valuable resource for veterinary practice owners and managers looking to improve their financial acumen. Check it out!