AUTHOR: Marianne van Wyk, CEO of VetMaster Online

In the final instalment of this three-part series, Marianne van Wyk, CEO of VetMaster Online turns the spotlight on practice management. From financial controls and break-even points to staff performance, cost centers and technology, she explores the principles that keep veterinary practices sustainable and competitive. Discover how practice owners can use data, technology and sound management while preserving the personal touch.

As we come to the end of this three-part series on running a successful veterinary practice in South Africa, I would like to focus on one of the most important aspects of practice ownership: Management.

Veterinarians spend many years developing their clinical knowledge and skills. However, when you own or manage a veterinary practice, you are not only a veterinarian — you are also running a business.

Whether you operate a small practice with only a few employees or a large veterinary hospital with several veterinarians, nurses, receptionists and support staff, there are certain management principles that should never be ignored.

1. Stay in control of your practice

One of the most important lessons I can share is this: Never completely hand over the running of your business to somebody else. You may have an excellent practice manager, receptionist, bookkeeper or accountant, but as an owner or partner, you should always remain involved and understand what is happening financially and operationally within your practice.

Make sure that all professional, legal and regulatory requirements applicable to your practice are kept up to date. Your tax, payroll, accounting and other financial obligations must also be monitored carefully.

A good accountant or bookkeeper is extremely important, but that does not mean that the practice owner should stop looking at the numbers.

Over the years, I have seen businesses lose substantial amounts of money because of poor financial controls, negligence, incorrect stock management and, unfortunately, sometimes even theft. Many of these problems continue for months because the owner assumes that a trusted employee or financial person is taking care of everything.

Trust your staff, but always have proper systems, controls and checks in place. Ultimately, it is your business.

2. Use your practice management dashboard every day

Modern veterinary practice management software gives practice owners access to information that, years ago, would have taken hours or even days to compile. My advice is simple: Use it.

Your practice dashboard should become part of your daily management routine. At a glance, you should be able to monitor important information such as:

• Daily turnover
• Payments received
• Outstanding debtors
• Stock movement
• Sales performance
• Staff activity
• Branch performance
• Expenses
• Appointment activity
• Treatment and billing information.

One of the major advantages of a cloud-based practice management system is that you do not necessarily have to be physically present at the practice to know what is happening. You should be able to check the health of your business from home, while travelling or after hours.

I often say that, before you go to bed at night, you should be able to look at your dashboard and have a reasonably good idea of how your practice performed that day. You do not need to control every transaction personally. But you should know what is happening.

3.  Measure staff and practice performance

There is a simple management principle that applies to almost every business: If you do not measure it, you cannot manage it properly. Practice owners should regularly evaluate the performance of the practice as a whole, as well as that of employees, veterinarians and partners. This does not mean creating an uncomfortable working environment where everybody feels as though they are constantly being watched. It means establishing measurable standards and knowing whether the business is operating efficiently.

Ask yourself questions such as:

• Is turnover increasing or decreasing?
• Are consultation numbers growing?
• What is the average value of a client visit?
• Are stock costs increasing faster than sales?
• Are discounts being controlled?
• Are debtors increasing?
• How productive are the different areas of the practice?
• Which areas are profitable?
• Which services are underperforming?

The earlier you identify a problem, the easier it normally is to correct. Waiting until there is pressure on the bank account before investigating the problem is far too late.

4. Know your break-even point

Every veterinary practice owner should know the practice’s break-even point. In simple terms, you need to know how much income your practice must generate every month to cover its costs before it actually starts making a profit. At the very least, you need to understand the relationship between: Income – Cost of Sales – Operating Expenses = Profit or Loss

Your turnover figure on its own does not tell you whether your practice is successful.

You need to understand what it costs you to generate that turnover and what is left at the end. Knowing your break-even point allows you to make better decisions about:

• Staffing
• Salaries
• Pricing
• Equipment purchases
• Stock levels
• Marketing
• Expansion
• Opening additional branches
• Introducing new services.

A successful veterinary practice should not only look busy — it must also be financially sustainable. A full waiting room does not automatically mean that the practice is profitable.

5. Understand your cost centers

As a veterinary practice grows, I strongly recommend dividing the different areas of the business into cost centers. These could include:

• Consultations
• Drugs and medicine
• Food
• Surgery
• Over-the-counter products
• Vetshop or online sales
• Grooming
• Deliveries
• Diagnostic services
• Other specialised services.

Why is this so important? Because looking only at your total turnover can sometimes hide what is really happening inside your business. For example, your food sales may be growing rapidly but producing a relatively small margin. Surgery may produce an excellent margin but be underutilised. Your online Vetshop may be showing steady growth, while another service could actually be costing the practice more money than it generates.

By measuring the different parts of the practice separately, you can start asking much better questions:

• Where are we making money?
• Where are we losing money?
• Where are we growing?
• Where should we reduce spending?
• And where should we invest more?

This becomes increasingly important as the practice grows.

6. Use technology to improve client and patient service

Technology should not only make administration easier for the practice. It should also improve the experience of both the client and the patient. Consumers today are accustomed to speed and convenience in almost every part of their lives. They can order groceries online, track a delivery from their phone, communicate instantly through an app and access information within seconds. Veterinary clients increasingly expect the same level of convenience from their veterinary practice. There are several technologies that veterinary practices should consider:

Cloud-based practice management software

A modern cloud-based practice management system should bring clinical and business information together. Clinical records, appointments, billing, stock, payments, reporting and communication should all form part of one connected environment. More importantly, management information should be available to the practice owner when it is needed — not only at the end of the month when the accountant produces a report.

Online Vetshop facilities

An online Vetshop can allow clients to order food and selected products directly from their veterinary practice. This creates an additional service for existing clients while also providing the practice with another potential source of revenue. Deliveries can add even more convenience. A small delivery vehicle carrying the practice’s branding can also become an excellent moving advertisement while delivering products to clients in the surrounding area.

In-house diagnostic equipment

Where it makes financial and clinical sense, in-house testing and diagnostic equipment can help veterinary practices obtain certain results much faster. The quicker the veterinarian has the necessary information, the quicker an informed clinical decision can be made and communicated to the client. In many situations, speed and communication form an important part of the overall client experience.

Apps and remote communication

Technology is also changing how veterinarians communicate with pet owners. Applications such as TeleMaster are being developed to assist with remote communication between the pet owner and veterinary practice, helping the owner receive quicker guidance on what the appropriate next step may be. Used correctly, technology can help determine whether an animal may need to be brought into the practice, whether further veterinary attention should be arranged, or what the owner should do next. This type of technology should support the veterinarian — not replace the veterinarian.

AI-assisted clinical notes

Another development that I believe will become increasingly important is the use of artificial intelligence to assist veterinarians with clinical notes. Instead of spending valuable time typing extensive notes after a consultation, the veterinarian can speak naturally while the software assists in converting that information into structured clinical notes using appropriate veterinary terminology. The veterinarian can then review and approve the information before it becomes part of the patient’s clinical record. For a busy veterinarian, the time saving could be significant. More importantly, technology such as this can allow the veterinarian to spend less time behind a keyboard and more time concentrating on the client and patient in front of them. The practices that combine good veterinary care with fast access to information, efficient communication and modern technology will continue to have a competitive advantage.

7. Never lose the personal touch

With all this talk about technology, there is something we must never forget. Veterinary medicine remains a very personal profession. Clients are trusting you with animals that, in many households, are regarded as members of the family. No computer system, app or artificial intelligence can replace empathy, compassion, communication and personal attention.

Technology should therefore never be introduced simply because it is new. It should be introduced because it helps the practice provide a better service. The best veterinary practices of the future will combine: Excellent personal service + Excellent veterinary care + Excellent technology.

Automation should give your team more time to spend with clients and patients — not make the relationship less personal.

The practice owner must remain involved

If there is one message, I would like readers to take away from this three-part series, it is this: Do not allow other people to run your business without remaining personally involved.

• Delegate responsibility.
• Employ good people.
• Trust your staff.
• Use professional accountants, bookkeepers and advisers. But remain involved.
• Look at your figures.
• Look at your dashboard.
• Speak to your staff.
• Speak to your clients.
• Understand your stock.
• Know your costs.
• Know your break-even point.
• Understand which areas of your business are profitable.
• And most importantly, know where your practice is heading.

A veterinary practice is both a healthcare environment and a business. For the practice to remain successful in the long term, both sides need to be managed properly. As technology continues to develop, I believe veterinary practice management will become increasingly data-driven and proactive.

We are also exploring the concept of providing practices with a virtual practice management service in the future — assisting owners to monitor important management information and identify areas that may require attention before small problems become large ones.

A final personal note

When VETs HUB Magazine started and I was given the opportunity to contribute articles, I decided to write about the area I know best — computers, systems and business management. My involvement with computers goes back a long way. I completed a BSc in Computer Science at the University of Pretoria (Tuks) at a time when computers were enormous compared with the devices we use today. I started in the days of punch cards — something many younger readers may never even have seen!

Since then, I have had the privilege of experiencing the evolution of computer technology through virtually every major stage, from those early systems to today’s cloud computing, mobile applications and now artificial intelligence.

I have also been running my own business in systems development for the past 36-years, and for more than 20-years I have been involved with veterinary practices and the systems that help them operate. During that time, I have learned a great deal from veterinarians, practice managers and staff.

Hopefully, through these articles, I have been able to give something useful back and perhaps provide a few ideas that practice owners can apply in their own businesses. The veterinary profession will continue to change. Technology will continue to change even faster.

But one principle will always remain the same: Nobody will care about the success of your business as much as you do. Stay involved. Measure what matters. Use technology wisely. Look after your staff. Look after your clients. Look after your data. And never stop looking for ways to improve the service you provide to the animals entrusted to your care.