Attention vet practice owners! Take charge of your business to ensure it’s well positioned for the road ahead.
- 5 key performance indicators to monitor the health of your business.
- Focus on 5 key initiatives to improve profitability, growth and the value of your business.
With the new year fast approaching, now is the time to see if your vet practice is well positioned for a successful year.
We all know that by undergoing preventative health examinations we’ve got a greater chance of preventing problems throughout our pet’s lives. It’s the same reason for establishing regular financial and strategic reviews of your professional practice. Done regularly, this will help you keep focused on identifying key value drivers to maximise the value of your hard earned business investment and to effectively manage risks, potential weaknesses and/or threats.
Effective financial and non-financial monitoring and strategic planning will help you position your vet practice to maximise value and make your business investment work for you.
Working ‘on’ vs ‘in’ your practice
Invest time to work on your vet practice, review key business performance measures and industry trends:
- Review financial performance including key performance indicators and use this to compare and benchmark with other successful and leading practices in your industry.
- Review key trends in relation to government, industry, technology, staffing and resources, client/patient needs and innovation.
- Identify opportunities, strengths, weaknesses and threats.
Start with 5 key performance indicators to monitor the health of your business:
- Measure the growth of the business – patient fee growth, new patients, referrals from specialists and repeat visits. Manage the risks – review of client complaints, average waiting time and lost clients.
- Measure performance – consulting room utilisation, fees charged per consultation, fees per Vet, net contribution per Vet, gross profit margin and net profit. Manage the risks by identifying trends and shortfalls compared to other vet practices.
- Measure the financial impact of the investment in new systems and/or processes.
- Measure staff engagement and performance - training hours, 360 degree feedback surveys, Vet revenue, productivity, Vet profit margin.
- Measure operating costs – as a % of gross fees measure rent, vet supplies, wages, IT support, subscriptions and insurance and benchmark with the industry.
After reviewing past performance, focus on 7 key initiatives to improve profitability, growth and the value of your business.
Plan ahead, identify and prioritise key initiatives for the next 12 months aimed at driving revenue growth, improving profitability, cash flow, efficiency, performance and ultimately increasing the equity value of your vet practice.
Some key initiatives include:
- Establish patient relationships linked to the vet practice and its brand; not just the individual. Introduce new technology to improve patient and client service and build effective client relationships.
- Staff development - consider leveraging from other professionals and team members, increasing the scale of your business, training key staff, investing in professional development to enhance level of care and maximising leveraging within the organisation by introducing an effective structured team. Introducing incentives and rewards to encourage performance improvements would also assist.
- Develop systems and processes to reduce reliance on key people within the vet practice.
- Reduce potential threats by increasing the range of services offered, select the right service mix to maximise profits and identify cross service opportunities.
- Enhance patient services utilising data analysis and management tools to identify patients who would benefit from proactive collaborative care.
- Maximise room utilisation by effective use of rooms for part time Vets and/or implement a recruitment program.
- Effectively use debt to provide capital to expand and grow your vet practice by acquiring other practices. This strategy can potentially lead to increased revenue growth, profitability and a higher return on investment.
Business Success
Successful business owners maximise their investment returns by continuing to evolve the way they do business. They continue to set new goals to counter existing weaknesses/threats, take advantage of opportunities as they arise and measure success against these goals. Take charge of your business to ensure it’s well positioned for the road ahead. Select and focus on 7 key initiatives for the next 12 months, reflect and measure the benefits achieved and prepare for your next strategic planning cycle.
If you would like more information, contact Brendan Campbell on 0402848667 or bcampbell@prosperity.com.au. Alternatively we have Specialist Health Sector Advisers in each of our offices. If you would like to speak to one in your location, call 1300 795 515.