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 Daniel Kittell | Industry - Veterinary Medicine, News
The pandemic ushered in a new era now referred to as the Great Resignation. A record number of American workers quit their jobs in 2021, many of them with no immediate plans to return to the workforce—they’re taking care of family, retiring early, living on savings, or reassessing their professional paths in light of living through a pandemic. The challenge now, for veterinary practice owners, is to halt this trend as it affects the veterinary industry. Read on to learn why workers are leaving, and what you can do to keep valuable employees on staff.
Who is Leaving the Veterinary Industry?
The labor market has seen the most quits among in-person positions as well as jobs with relatively low pay. In veterinary practices this translates to customer service staff and technicians. Low wages, overwork, and additional costs attributed to things like continuing education requirements and license renewal are some of the reasons they are leaving the industry. According to a 2007 study published in the Journal of the American Veterinary Medical Association, credentialed technicians have a considerable impact on a practice’s gross revenue. Yet the U.S. Department of Labor cites the median hourly pay for a credentialed technician is just $17.43 an hour, which may not be reflective of the monetary value they bring to the practice.
Quitting is About More than Compensation
It’s no secret that living through a worldwide pandemic for the past two years has caused people to reevaluate priorities and question life goals, so it’s no surprise that compensation is not the sole reason people are leaving their jobs. A survey conducted by Gallup last year confirmed that 57% of workers want to update their skills and 48% would contemplate a job switch for the opportunity to do so. In fact, workers across a broad age range consider upskilling a top benefit. It’s worth considering how your veterinary practice values career growth as a key factor in recruiting and keeping valuable employees.
How Your Practice Can Avoid the Great Resignation
Take action. It’s clear that employees greatly value updating their skills, so focus on employee development. Have conversations with employees about specific challenges they might be facing; engage them in conversation about why they choose to stay in the industry, and on the flip side, what variables or circumstances might have them questioning that decision (then take this feedback and cultivate a workplace that emphasizes what’s working and strives to mitigate what’s not). Offer professional growth opportunities through new projects or skillsets that align with their professional goals within the industry.
Finally, turn the questioning on yourself. What new skills, roles, and services could you bring to the table to help facilitate a practice that values bettering the skillset of employees and a more fulfilling workplace?
by Stephen Reed | Accounting News, Business Growth, Industry - Veterinary Medicine, News
With big-box retailers and ecommerce powerhouses like PetSmart, Walmart, and Chewy.com offering online pharmacies, private practices are finding that their bottom lines are being affected. Now is the time to strengthen your clinic’s pharmacy with proactive business strategies. Here’s how.
Send Refill Reminders
Your practice likely already sends reminders for vaccines, so sending refill notices for preventatives and prescriptions are a natural extension of this practice. Because text messages have a 99 percent open rate—as opposed to the 33 percent open rate of health-care emails—text prompts are likely your best route. You can also print refill reminders on prescription labels.
Reinforce Client Relationships
When you receive the fax from the internet pharmacy, instead of immediately signing it, take a minute to connect with the client, especially if the client’s pet is overdue for an exam and heartworm test because you have the opportunity to make an appointment. Even if their pet is up to date, reinforcing the doctor-client-patient relationship with a phone call is important. It also gives you an opportunity to explain to the client how your hospital buys safe drugs directly from pharmaceutical companies, your staff receives regular training on medications, and your pharmacy offers competitive prices. If you can offer any additional savings on particular brands, or if you have an online store and a home-delivery option, now is the time to make sure the client is aware of these services.
Set Up an Online Store with Home Delivery and Auto-Ship Benefits
With your own online pharmacy, you can offer your clients home-delivery of medications with auto-ship benefits by partnering with veterinary distributors. Offering an auto-ship option assures the client that they will never be in need of long-term prescriptions and preventatives. If the client purchases a six-month supply of flea and tick medication, set up an auto-ship refill in five months when the client will have one dose remaining. This is especially helpful in regards to heartworm medication because near the end of a 12-month supply, you can send reminders to the client for an exam, heartworm test, prescription renewal, and additional preventative services.
Begin Offering Home-Delivery of Pet Food
Home delivery helps to cross one more errand off of your clients’ to-do lists. It’s a time-saver for working professionals, a relief for older seniors, and a natural move for anyone who regularly orders online. You can seamlessly get clients started with recurring shipments during exams, offering them a starter bag of food, and assuring them that their online order will arrive on their doorstep in just a few days.
by Stephen Reed | Accounting News, Industry - Veterinary Medicine, News
Clients consistently turn to veterinarians for advice and assurance on products, pet food, and pharmaceuticals for their pets, so a retail business that can add to your clinic’s bottom line is a natural step for many. Below are some tips to help implement a retail business for your practice.
Be Selective with Products
Evaluate your product offerings and determine which ones move quickly. Focus on items that are backed by your medical team, turn over quickly (less than six months but ideally in a month or two), and are favored by clients. If you routinely recommend over-the-counter products during appointments, have them accessible for your clients to take home that day. Limiting choices to what your team specifically and commonly recommends helps to manage inventory and develop trust with clients. Even in the case of products that clients can buy at a pet store or grocery store, like Nylabone chews or nail trimmers, if they are readily available at their vet’s office, clients are typically happy to check that item off their list and support a small business in the process.
Implement a Loyalty Program
Consider implementing a loyalty program where clients receive a “freebie” when they reach a certain dollar amount. These freebies could be an account credit, a service such as a free nail trim, or a product that retails for under a certain threshold. This is a simple strategy to boost sales in a way that will help staff guide clients to products that they would likely buy anyway while helping them reach their dollar goal for the loyalty program.
Keep It Focused
Keep it small in the beginning by viewing your retail offerings as an expansion to the services you’re already providing. Focus on stocking products that are important to your clients and esteemed by doctors and staff. This approach will help garner more repeat clients, more foot traffic, and a better-established relationship with clients.
In addition to over-the-counter healthcare products and general pet merchandise, be sure not to discount in-clinic pharmacy sales. Veterinarians do the work of attending conferences, communicating with drug manufacturers, and determining which products are best for their clients and pets. Instead of directing clients to drugstore pharmacies or, worse, online sites where they could unknowingly purchase less-than-ideal products to save some money, why not stock the products you’re recommending? This isn’t to say you should stock every product ever mentioned in every appointment, but it should be fairly easy to run some reports through your software to determine which products have the highest turnover. This will tell you which products are important to have on hand for customers.
The Bottom Line
Though you may not be able to increase your cost more than 35% of wholesale value in order to be in range with competitors, a positive cash flow on product sales is worth it in the end for your bottom line. Perhaps most importantly, clients and their pets are getting exactly what they need from the veterinarian they trust.
by Daniel Kittell | Accounting News, Business Consulting, COVID-19, Industry - Veterinary Medicine
Much like boredom breeds creativity, challenging times breed innovation. Though we will eventually return to normal, it will be a new normal—one where veterinarians have learned to adapt, survive, and even thrive during a global health crisis and economic downturn. Vet practices, which traditionally have been brick-and-mortar businesses, were forced almost overnight to implement online consultations, digital diagnoses, and curbside visits. These changes, it turns out, may be beneficial for business not just in the face of a pandemic, but permanently.
Telemedicine
A critical concern for businesses during the pandemic has been maintaining incoming cash flow, and though veterinary practices have had to adapt quickly, telemedicine—including remote consultations, diagnoses, and prescriptions—has provided an avenue for concerned pet owners to continue accessing affordable, professional vet care while helping to keep vet practices profitable. Along with aiding in restoring work/life balance among staff, offering telemedicine services, including curbside visits, is especially beneficial for immunocompromised and differently abled clients.
If vet practices were doing telemedicine prior to the pandemic, it’s likely that they weren’t charging for the service, but Covid-19 has given the green light to let clients know that payment for such time and expertise will be normal practice going forward. After all, services like curbside visits are so far proving to increase duration of appointments, as new intake processes need to be developed and back-and-forth communication with clients can take time.
Online Outreach
A strong line of communication with clients during and after the pandemic is imperative, and this is a time when veterinary practices can really boost and nurture existing client relationships as well as establish new ones. One can look to the company Chewy, which has experienced a momentum in revenue, due in large part to customer service and a new customer acquisition rate that is significantly higher than pre-pandemic. The company experienced an influx of active customers greater in the first half of 2020 than in all of 2019.
“We built Chewy by putting the customer at the center of everything that we do. In a world of uncertainty, qualities like trust, convenience, and customer service really matter, especially when it comes to caring for family or loved ones,” said Chewy CEO Sumit Singh.
Veterinary practices can use their websites and social media platforms to engage with clients and keep them informed, now and moving forward, by relaying valuable information such as:
- Alerting clients to hours of operation, policy changes, appointment availabilities, new procedures, and telemedicine capabilities
- Updating clients of the availability, including any sales and promotions, of pet supplies and food, either through the vet’s platform or a partner where the vet practice receives a percentage of the sales
Technology
Public health recommendations and state-mandated phases are still changing regularly, so keeping track of Covid-19 safety practices is still critical in keeping business running. Improve communication between staff by updating email listservs or using Google Docs and Sheets, which support immediate collaboration and multiple editors. Programs like Google Hangouts and Slack enable client service representatives to communicate efficiently with each other and with remote staff.
While you don’t want to inundate staff with an overload of Zoom meetings and new administrative and logistical strategies, managers should be regularly conversing on areas for growth and ways to improve patient care, client experiences, and team morale. Retaining valuable staff and keeping your team as connected as possible is a sure way to keep business steady, and even growing, well beyond the pandemic.
