Finding balance when money is tight (Sponsored by Intervet/Schering-Plough Animal Health) - Veterinary Healthcare
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Finding balance when money is tight (Sponsored by Intervet/Schering-Plough Animal Health)
During uncertain times, adjust your attitude and short-term business practices—not your fee schedule.


PARTNERS IN PRACTICE



(Image: Getty Images)
Increasing news reports on the rise of unemployment and commercial bankruptcies might have some business owners a little spooked. In the equine world, news of irresponsible owners turning horses loose to fend for themselves is downright scary. In times of economic hardship, some practitioners might be asking if fee schedules need to be adjusted to ease the financial burden on clients, but there's no reason to start discounting based on media hype or isolated incidents. Instead, focus on developing smart, short-term business practices that will keep your revenue stream flowing and strengthen your bond with clients.

Turn off the TV

The media projects the illusion that another Great Depression is upon us to garner ratings and sell newspapers—but things may not be as bad as they seem. According to the U.S. Department of Labor statistics, the number of people working in November 2008 was only 2 percent lower than in November 2007. Gary I. Glassman, CPA, principal of Burzenski's Veterinary Financial Management Services arm, says to some extent, the negative attitude surrounding the state of the economy is hype. "We read about what the press wants us to, but that doesn't mean it's a reality for everyone," says Glassman. "The question is: How is it affecting your practice, location, and geographic area?"

Identify invoice patterns

The first step in determining the status of your business is to evaluate your practice. Compare the total number of invoices you receive from month to month. Has there been a decline? Are you seeing a consistent pattern? If so, then it might be time for a change. Mark Baus, DVM, managing partner of Fairfield Equine Associates in Newtown, Conn., says that laying off staff or discounting fees are last-ditch efforts. "Those are regressive moves that are hard to undo," he says. "There are other things you can cut before going there."

Tackle fixed and variable expenses first


Keep up with markups
Most equine practitioners are ambulatory, so their main expenses relate to the field. Glassman says now is a good time to shop around for more competitive rates on general business and truck insurance, supplies, and cell phone service. "The businesses that provide these services know that many people are having financial issues," he says. "Their main priority is to get a sale, no matter how low it is. But you won't know how low you can bargain for if you don't ask." If you can negotiate lower terms on these fixed expenses, it directly increases profit.

Dr. Baus says inventory control is crucial when cutting back on variable expenses. Install strict controls by limiting access of how items are checked in and out and keeping as little on the shelf as possible. Divide drugs into two categories—highly-shopped with a low margin (drugs that people would commonly buy on an internet pharmacy) and drugs that are used at the point of services (steroids, nerve block solutions, etc.). "Stop purchasing the highly-shopped drugs and lock down the pharmacy," Baus says. "There's a lot of shrinkage that goes on, and it can bleed you to death."

Finally, if you have to reduce staffing expense, put a freeze on wage increases, reduce the hours worked each week, and place strict controls on overtime before resorting to layoffs.


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Source: PARTNERS IN PRACTICE,
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