DO NOT RUN OUT OF MONEY!
Rule three on the Big 3 for any veterinary practice owner is:
DO NOT RUN OUT OF MONEY!
To help us improve our skills in this area, I invited the grand master of Practice Valuations, David McCormick to present a session to my Leadership group (It's called "Leaders") about navigating the vet practice P&L statement.
This is a subject that many clinical owners tend to default to that glazed-over, thousand-yard stare when you get into the accounts. And yet, David had us all on the edge of our seats as if we were watching a suspense movie.
He taught us what the P&L is, how to organise it and then, most importantly, how to use it to assess the health of your clinic.
Some Takeaways To Ponder:
1. Get accurate accounts produced as quickly as possible after your month ends so you can respond quickly to your challenges and stay on track. 3 months later is far too late to stay on track. You'd be shocked (maybe not!) at how many clinics have no idea how the are doing until the year-end accounts come through. And when they do, they are crammed full of erroneous expenses that mask the true performance of the clinic.
2. Make sure people in positions of power understand what they must do to keep costs under control. Especially when it comes to stock. And while trust is important, don't be a chump and assume theft will never happen to you. That's how you get burned. Watch out for rising COGS without a clear explanation and stock check and ask questions about where things are if the stock ordered doesn't tally up with the stock sold.
3. Most of us are under-charging or at least worrying about price too much. (Even in the difficult economic place we find ourselves as of 2023).
4. Top-line sales are massively important, control costs and once you are past breakeven, the profit goes big. A dental procedure/week, 3 vaccines more/week add up.
5. If you have your financials together, you have options - I'm not just talking about selling out to the highest bidder - which I reckon has gone quite a long way to wrecking the profession. But if you think about why people are selling, it's often because they see a big payday while being unable to see a sustainable future - because the business runs them, not the other way around. Good financial control reduces stress - those with money have options - better stuff, better people, better culture, etc. It's all a grand virtuous cycle.
There was so much more, I wrote several pages of notes, and we were deluged with questions.
This is the level we are playing at in my Leaders group. We're not building stuff to just sell to the highest bidder tomorrow. We're building sustainable practices that are financially and emotionally healthy. I might lead the group, but I'm always a student too. And my clinic is likely very similar to yours.
If you are fed up with grinding out day after day, then we can help you build something better. It'll take some hard work, but no more than you already give.
Message me if you'd like to know more.
For more information on my Leadership course, click here.