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Time to focus on the positive!

by
01 February 2014, at 12:00am

Simon Innes of CVS believes this is a year of opportunity for all veterinary practices and that both the independent and corporate ones can take advantage of improving economic conditions...

WE read much about the challenges facing the veterinary profession but, as 2014 gets under way, there are real signs that economic conditions are improving – if slowly – and I think this year has the potential to be better so long as practices embrace changes in the competitive landscape and really capitalise on their strengths.

Before we look forward, let’s look back at 2013.

It was another tough year. The opening of new sites increased competition further for practices, while online pharmacies continued to suck drug revenues out of them.

Perhaps the huge growth of buying groups was the most significant development. More than 80% of independent practices are now members – around 1,300 practices in all. Last year was the year buying groups came of age.

I was surprised by the buoyancy of the locum market. Our own locum agency, Pet Medic Recruitment, was very busy during the summer – which we expected. What we didn’t expect was for the strong demand to continue unabated until the end of the year.

With talk of new veterinary schools and fears of a potential “oversupply” of qualified staff, it may be comforting for the profession to know that, given the current short supply of locums at least, any possible oversupply appears to be some time off.

So, looking forward, what’s the outlook for practices – independent or otherwise – and how can they take advantage of improving economic conditions? n If you’re an independent practice and not yet in a buying group, join one! The financial benefit is clear, but do your research first. 

They all offer buying discounts, of course, but check what additional support and services they can offer you to help you differentiate your practice. I expect some consolidation among the groups during 2014 as, with few practices left to target, some pursue growth targets by acquisition. We’re already seeing this consolidation in the internet pharmacy arena. In 2012, MedicAnimal’s turnover was £45 million, a growth achieved primarily through acquisition. 

A player of this size in the market is a challenge to us all n While we’re looking at the veterinary supply chain, at CVS we’re noticing a trend for insurance providers to start directing their clients to particular practices for treatment – a model well established in the automotive sector. While by no means all insurance companies are doing this, assuming the profession would prefer not to have insurance companies controlling where their clients go, it might be worth checking out the policies of any insurance company you recommend.

  • Focus on what your practice is good at: delivering top quality clinical care and service to your patients and their owners. Review the level of clinical work you undertake. If you invested in up-skilling your team, could you do more with your existing staff and refer less?

With so much drug revenue being lost online, clinical expertise is your financial bedrock so make sure you’re extracting the maximum value from it. Your team will thank you for the investment in their own development and will be more highly motivated as a result. n What about your out-of-hours care? If you extended your opening hours slightly or offered Saturday openings, could you recoup some of what you currently lose to an external provider? It’s all about reversing the cycle of “income out” – whether to an online pharmacy, referral practice or OOH supplier – and instead bringing income back “in”. Sometimes making a few small tweaks can add up to something quite significant. n Invest in commercial acumen. 

You’re running a business as well as a clinical practice and, in today’s market, you need to be operating at maximum efficiency and effectiveness. Perhaps you have a capable practice manager who could take a more strategic role or perhaps a member of your clinical team is interested in the business side of things? However you do it, you must have an individual firmly focused on the performance and productivity of the practice.

  • Play your trump card. In an independent practice, this is the owner. Clients love the fact that the owner gives his or her personal attention to their pet. The relationship he or she has with both the clients and the team is business gold, so use it! If you’re the owner, make sure you’re regularly in practice and visibly so – not permanently locked away in the consulting room. Make a point of greeting clients and their pets in the waiting room.

Get out and about in the community and make your presence felt. n Don’t be frightened if a new practice opens up down the road. It will have its own challenges while you have 12 months to capitalise on your loyal client base. Stand tall and go for it during this window of opportunity. Make sure your website and social media are up to scratch; set up a loyalty scheme if you don’t yet have one (what are you waiting for?); look at your drug pricing; get into the local papers and generally do everything you can to boost your profile and position yourselves at the heart of the local community. You’ll be amazed at the results!

For all practices, 2014 is a year of opportunity. Many of the trends we’ve seen – and increasing competition is certainly one of these – are set to continue but, refreshingly, against the backdrop of a slowly improving economy, it’s time for some positive thinking.