Latest News November 2020

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How do you choose who to sell your veterinary business to – web event Wed 11 Nov

Have you been approached to sell your business and it just seems to good an offer to say no? This is not a decision to rush into, and there are a number of factors to consider. Join us on Wednesday 11 November midday in QLD to get our thoughts on this and you may be surprised to find the offer you are looking at may not be quite what it seems! This event will be with Paolo and Anne so expect to hear lots of surprising and interesting information, if you don’t want to hear something controversial then we advise not to attend.

Register here: https://us02web.zoom.us/webinar/register/WN_lrRhOjupRyWPXELkd–i2Q

Did you miss the web event with TedX speaker Paul Dunn

We had a fantastic event with Paul Dunn online, so if you missed it you can check it out here: https://www.youtube.com/watch?v=sIxnhAUwDXY

You will get some very useful tips on pricing, how to easily increase prices for best profits and how your clients really think and connect. You will also learn how your business can make an impact on the world whilst you improve your profits.

Veterinary industry faces an ‘economic paradox’

For the veterinary industry, the current COVID-19 crisis has had an economic outcome that would have been hard to predict and is still somewhat difficult to understand. Pet services in general have boomed under COVID-19 where most other businesses are suffering and many will never re-open in 2021 in spite of significant government rebates.

Monitoring the veterinary industry using Profitdiagnostix software installed in 200 vet clinics in Australia has shown a roller coaster of positive growth results over the last 8 months with some months showing growth in revenue and primary consultations at over 20% and other months showing a more conservative growth of around 9%.

But it’s not only us at APL Accountants who are perplexed by this roller coaster – Illion surveys which monitors volunteered consumer credit card spending of over 200,000 credit cards showed a 40% increase in spending on ‘Pet Services’ in the last week of August and then a more moderate 7% in the last week of September.

Regardless of the roller coaster ride, the growth, when averaged out is strongly positive over the last 8 months.

Economically this has been a great time for vet practices and profits are increasing, however there is a downside that you have to be aware of. Veterinary clinics now find themselves in a unique place which is almost the complete opposite of most other businesses:

• Other businesses are cutting back staff hours whilst veterinary businesses have teams that are overworked and have lost efficiency where social distancing is still required
• Other businesses are surviving on Job Keepers whilst most veterinary businesses will not qualify for this government rebate
• People employed in veterinary businesses are wondering why some of their friends are still able to earn a full wage whilst working reduced hours thanks to government rebates, whilst they are working harder than ever – a recipe for disengagement
• The veterinary skills shortage is becoming ever more apparent with city practices now struggling to recruit but getting busier and busier.

Veterinary managers should be very mindful of the above factors which will increase the volatility of the team and may increase staff turnover – now more than ever is a good time to put some effort into maintaining the morale of the team. The other take home message is that now more than ever efficiency, time management and strategic pricing may be the only tactics than some over worked practices have up their sleeve. For example:

• Do the team have idle time between procedures and are pre-ga blood tests being run before the surgeon is getting ready to start?
• Are consultations running on time?
• Are you using online appointment scheduling to reduce load on the reception desk?
• Are you still servicing low value clients and giving discounts – a bad idea in an economic environment where workload in increasing.

The question is also being asked as to what is driving this growth in veterinary businesses? And a very important part of that which we have investigated this month is whether growth is due to:

1. Existing clients getting more pets
2. New pet owners emerging in the market

This is actually a very important thing to think about because it effects your marketing strategies. If existing clients are getting more pets then these clients are already bonded to your business so marketing is not so important.

However the reality seems to be the second option – new pets being purchased by families that previously did not have pets. To do this we looked at the 12 month trend in client to pet ratio in a number of fast growing practices. The ratio of clients to pets has remained the same – so its new clients with new pets coming to your practice.

This means that you have to make an important decision – to capture this business marketing becomes important and everything that brings a new client to your door will drive growth – but do you really want to get busier? This is where strategic pricing is important because you should still want to get good clients but can do so and at the same time lose some of your bottom tier customers – pricing strategically is a clever way of doing this.

Dog Tales! – inconvenience is your greatest competitor

Humans are strange creatures who like to overthink things and miss the obvious! An even stranger attribute of humans is that their oversized logical brains think in one manner yet they behave in a different manner – inconvenience is a good example of an obvious influencer of behaviour that is often underestimated by humans who prefer to think that their oversized cerebral cortex is immune to the way it influences them.

Let’s give you a great behavioural example of why humans should rethink inconvenience like their canine family members:

My human slave comes home and puts my favourite bed in the washing machine – this is an inconvenience. I address this by sleeping on her favourite yoga mat instead because this is conveniently located in the lounge. In other words, I make a plan that gives me an acceptable result whilst making the least effort. Us dogs are very good at this and those devilish cats we hate so much are even better. We are proud to embrace this ‘lazy’ approach to life.

Business owning humans have missed this behavioural trend in their own species probably because they find the ‘lazy’ alternatives embarrassing.  Here is how it effects you human vets:

You have a business and you want to see more animals – but these animals are highly dependent on their human slaves to bring them to your practice. These human slaves have historically foraged and hunted for 7.5 hours a day and often forage and hunt many miles away from their den. When they return to their den at sunset they have to chase and feed little humans, feed their benevolent animal masters (dogs) and/or their malevolent animal masters (cats). They then settle in front of a square box that flashes lights at their faces and feed themselves. With this routine its very difficult for them to bring us to your clinic. In fact often your clinic is open only when they are out foraging or hunting and they would have to travel vast distances from their hunting ground to collect us, bring us to you, bring us back home and then go back hunting – so time consuming that it would mean a days hunting and foraging is lost.

So now the business owner’s cortical brain is thinking ‘my competitors must be getting all my business’. Humans LOVE doing this – blaming other humans for their problems. The truth is your business has instead been losing money to inconvenience! Our human slaves are just taking the easy option, deferring our visits to you and sitting in front of the light box eating dinner – an acceptable result with the least effort even though you and they would deny that humans are stupid enough to behave like this.

7 months ago something VERY strange happened! The human slaves stopped hunting and foraging as much! They started staying in their dens more and were around fussing over us a lot more. All of a sudden bringing us to our favourite human doctor was no big deal, it became easier. It suddenly became more convenient and we are suddenly visiting the vet more often. The last 7 months have been proof of something we have long suspected – inconvenience has been the veterinary clinics largest competitor and modern lifestyle made it difficult for pets to get to the vet. This new stay at home trend may not last forever but it’s great for us while it does. When Mr Inconvenience returns as your greatest competitor, what are you going to do about it? Are you going to ignore the fact that humans behave in this embarrassing and ‘lazy’ manner like other animals or are you going to give some thought about how to make vet visits easier?

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