by Daniel Kittell | Accounting News, Industry - Veterinary Medicine, News
It’s no secret that inventory costs, payroll demands, and overhead expenses are climbing due to inflation, supply chain issues, gas price hikes, and a broad staffing shortage. Thus, prices are going to need to increase in order to maintain profitability and stay afloat. Read on for industry-specific challenges and how to solve them while remaining dedicated to offering quality care.
Trim Payroll Expenses
Day-to-day practice management continues to be affected by staff shortages, a competitive hiring environment, and higher payroll expenses. You’ll need to make the judgment for your own practice about trimming payroll. It may mean cutting some hours for staff whose jobs can be done in a shorter amount of time, or it may mean letting go of staff whose contributions no longer serve your practice.
Reduce Inventory Overabundance
Pricing is higher in just about every category. Any steps you took to prepare for expected higher expenses likely didn’t cut it, and your bottom line is feeling the effects. Think about the medications you offer, and rather than trying to stock a small pharmacy, pick just a handful that are most in demand, and that the majority of your staff can get behind.
Offer More In-House Services
While now might be a good time to scale back your in-house pharmacy offerings, it could be an optimal time to invest in new equipment so you are able to offer more services to your clients. Think about lab services that you’ve been neglecting or outsourcing: cytology, urinalyses, and fungal cultures to name a few.
Raise Prices
Increasing prices can be tricky, and it can be done incorrectly, so you need to be thoughtful about how to go about raising prices. The last thing you want is for clients to feel that you’re insensitive to their financial reality. You’ll want to pinpoint areas where it’s defensible to raise fees by just a small amount. This will vary across practices, but even a small amount can make a difference. For instance, given today’s supply chain issues and energy costs, it makes sense to focus on items and services that rely on transportation and energy consumption. Whatever your focus, forgo large fee hikes for small and steady increments.
Show Appreciation for Clients
Make sure your clients know that despite the current rocky economy, your priority is to serve them and their pets with the high quality of veterinary care they’ve become accustomed to when they visit your practice. Most clients will understand that in order for your doors to stay open, prices may need to inch up. Still, you’ll want to show appreciation for a client’s loyalty and the opportunity to care for their pet. You can also instruct staff to share information about preventative care plans, pet insurance, and third-party financing to help pet owners handle the cost of care.
by Stephen Reed | Accounting News, Business Growth, News
After weathering the storm of the Covid-19 pandemic for the past two years, small businesses are facing yet another significant challenge: rising inflation. While small business owners can take solace in the fact that they’re not facing this challenge alone, it can be difficult to come up with a game plan to hedge against inflation. Below we’ll go over some top tips to help you do just that.
What’s Driving Inflation?
Inflation is a sustained increase in the price of goods and services, and it weakens the purchasing power of currency. In the US, demand surged once the economy re-opened post-pandemic lockdowns, and Americans were eager to spend money they had saved, including government stimulus checks. At the same time, we started to experience supply chain issues as a result of Covid-era policies. This put pressure on the supply-and-demand flow, with supply falling exceedingly short of demand. Rising oil prices, which lead to rising gas prices, are also to blame.
Media coverage on inflation tends to center the consumers, but the challenges posed to small businesses can be even greater, including:
- A loss of money due to rising supply costs
- A slowdown of incoming invoice payments as clients struggle with their own financial hardships
- More hurdles to access funds as financial institutions often tighten borrowing requirements for the duration of higher inflation
These challenges force the small business owner to either absorb higher costs or raise prices for the consumer. However, there are inflation protection measures that can help to alleviate this dilemma.
Use Automation to Increase Productivity
If it’s possible to automate certain daily tasks, do it. Tasks that make the most sense to automate include those that are repeatable and don’t take a lot of brainpower to complete, including:
- Email
- Contracts
- Purchase orders
- Invoices
- Inventory
- Shipping
- Sales and marketing
Automation cuts down on errors, simplifies processes, and enhances customer service. There is a plethora of apps available to help you, from implementing basic bookkeeping to boosting client care, ramping up marketing, and more. You may be using some of these apps already, but be sure you’re taking full advantage of the features they offer.
Cut Expenses
Reduce costs wherever you can. Cancel any services, subscriptions, and products your company isn’t using. Also consider looking into alternate materials, products, or ingredients that may be less expensive and will help ultimately save money. Something else to think about: Is transitioning to a hybrid remote/in-office model that would give you the opportunity to downsize your office a possibility for your business?
Tackle Debt
If you have any residual funds from the Covid-era stimulus packages, now is the time to use those to pay down high-interest debt, especially as interest rates are expected to keep rising. You may not be able to wipe out your debt completely, but try to cut down at least the principal amount. Decreasing how much you pay through lowering interest rates can aid in protecting against inflation.
Additionally, don’t discount trying to renegotiate loans or lines of credit with your lender in order to lower interest rates. Doing so will allow you to save money, which you can put into savings reserves.
Lower Your Supply Chain Risk
Your business is going to be susceptible to supply chain disruptions. To further protect against inflation, lower your supply chain risk by:
- Organizing backup supply chain options
- Exploring domestic substitutes for overseas suppliers
- Storing stockpiles of essential supplies for the least possible storage costs
Raise Prices Strategically
Even if you’re automating processes and cutting expenses, sometimes price increases can’t be avoided during periods of high inflation. Always keep a pulse on what the competition is doing, and be careful not to raise prices too quickly. Pricing yourself above the market without a strategic approach could lose customers.
by Daniel Kittell | Accounting News, Business Growth, Industry - Nonprofit, News, NonProfit
With inflation rising, it might be tempting to cut fundraising budgets and programs, but that’s the last move you should be making. Instead, it’s time to put proven fundraising strategies to work. As long as you keep in mind that in order for a fundraising campaign to be fruitful, both time and effort need to be invested, the strategies discussed below will help you raise money more effectively.
Don’t Try to Fix What Isn’t Broken
First, don’t panic. If your development staff has been successful at implementing effective activities, don’t cut your budget (or lay off staff). Continue to follow the plan. An economic slowdown is not the time to cut back on development work.
Create a Plan for Strategy and Revenue
People give money to causes that resonate with them. They give even more money to organizations that are strategic about their mission and how they execute their goals to accomplish that mission. Therefore, if you don’t have a strategic plan and a revenue plan already established, now is the time to create them. An effective strategic plan allows you to build investment, and an effective revenue plan provides a blueprint to generate funds. Think about how you can sharpen your nonprofit’s messaging and position your mission, values, and programs to boost your effectiveness for the recipients of your services.
Connect with Supporters
In times of economic uncertainty, nonprofits need to double down on efforts to stay connected with their supporters. This includes thanking donors, offering updates about your budget and pressing needs, and conveying stories about your work through testimonials, photos, videos, social media conversations, etc. Allow space for your supporters’ voices to be heard in telling their own stories in how they connect to your organization and community.
Utilize Social Media
If you want people to become more invested in your work, focus on creating an online community through social media where people can get to know your organization — your mission, goals, and plans to achieve them. Showcase upcoming events and be clear on opportunities for people to become involved. Additional modes of digital outreach include email newsletters, campaigns, and event invites.
Pay Attention to Return on Investment
In regards to raising money, nonprofit organizations generally have limited resources in the form of staff, technology, and funds. Be sure you are accurately calculating the costs of every revenue-generating endeavor to be able to gauge the actual net income that resulted from each endeavor. If the return on investment of time, effort, and money is lacking, you might find that there are less expensive and more effective ways to raise money.
Find New Donors by Analyzing Existing Donors
When your well of support is running low, look into your database of existing donors and determine commonalities among the most generous donors. Demographics, donation amounts, and length of time they’ve been regularly donating are all key aspects you should pay attention to. Once you’ve narrowed it down to your best donors, ask them (formally or informally) what drives them to give to your specific organization. The goal is to figure out what resonates with them so that you can find other donors like them.
