10 steps to a smoother running practice

Recently, a veterinarian in the process of hiring a new practice manager asked me "What are the 10 things a practice manager needs to know to be effective?" What a great question! It took a little thinking to narrow the "must-know" list to just 10 items. But whether you're an owner-veterinarian, a practice manager, or the owner's managing spouse, I think you need to apply these strategies to manage the practice effectively.

1 Hire and develop "10" employees

No, I'm not suggesting every practice needs to hire 10 team members. I'm saying that when you rate employees' performances on a scale from one to 10, the team members earning a 10 are the keepers.

Why is this so critical? Well, most of your management duties are personnel related, so great employees save you headaches. And the brutal truth is a five, six, or seven employee will never be a 10. So you really don't want to hire anyone who's not at least an eight—and you'll always strive to develop "10" employees.

Have a practice manager? If so, your job is to ensure that she's on top of hiring and keeping people with the potential to become stellar team members. Check in with her regularly, and look over performance reviews to follow employees' progress.

2 Develop training programs

The most effective training programs break learning into phases so employees systematically learn the appropriate skills in manageable chunks. To get started, break the employee's complete job description into three or four phases.

Next, a star employee can train the new hire, focusing on each phase for about a week. When the trainee finishes each phase, the training supervisor and then the practice manager (or managing doctor) should evaluate his or her skills, asking the employee to perform some of the newly learned tasks. If there's a problem at this point, retrain the employee before moving on to the next phase.

3 Institute effective inventory control systems

Your inventory costs should run 14 percent to 16 percent of gross revenue. Of course, you also need to balance product shelf life and inventory turns, and reduce inventory when possible by cutting redundant products. To achieve these goals, you'll likely use a mix of computerized and manual inventory systems.

If you have a manager, then you just need to compare your inventory cost with gross revenues and make sure the total cost of inventory falls between 14 percent and 16 percent of gross.

4 Ensure fee capture

A practice manager isn't necessarily an income producer. But if she ensures that your team charges appropriately for all services rendered, the resulting revenue growth may cover her management salary. And, in my experience, if a manager takes the responsibility for charging clients out of the hands of the veterinarian recommending and providing the care, practice income dramatically increases. An effective manager knows how to incorporate systems that will ensure fee capture within the practice.

The key to success: effective internal controls. For example, your team could use in-hospital tracking forms to record all services provided to hospitalized patients and patient visit forms to track all care provided during outpatient visits.

5 Communicate effectively

The success of any business or individual depends on communication—a skill you must continually work to develop. Attending continuing education seminars that focus on communication and networking with other managers and business professionals through Rotary clubs or Toastmasters are great ways to improve your skill at establishing vertical channels of communication.

If you have a manager: Remember, your manager has a tough job. She must keep you, your clients, and your employees happy—which takes amazing people skills. Your job is to encourage your manager to hone these critical communication skills and provide her with continuing education opportunities.

6 Work the numbers

How does your practice compare to industry averages? Comparing your data to accepted benchmarks gives you a clear picture of your practice's health. For example, support staff costs should be 18 percent to 21 percent of gross profits.

Also work to control bank and credit card fees, facility expenses, and accounts payable and receivable.

Have a manager? Your job is to make sure she's keeping expenses in line. For example, high postage fees could mean employees are sending out personal mail at your expense. Low postage expenses could be a sign that your manager isn't getting reminders out.

7 Use appropriate technology

Technology can be both friend and foe. It can make you more efficient but can leave you in the lurch at the worst possible time. You need to stay up-to-date so you know which veterinary, accounting, word processing, and spreadsheet software best meets your practice's needs. The same applies to communication technology, such as voice mail, on-hold systems, and high-speed Internet access. And you could save time with electronic employee scheduling, time clock, and evaluation programs.

Have a manager? Your job is to provide opportunities to keep her up-to-date on technology. When she comes to you with new knowledge, talk about the benefits she thinks the new technology could bring the practice. And after you sign off on your manager's plan to implement a new tool, make sure the job gets done.

8 Handle accounts receivable

In a small animal practice, accounts receivable should be between 1 percent and 3 percent of gross revenue. If your accounts receivable is too low, it may be a sign that you're too strict and are turning away opportunities for income. And if accounts receivable is too high, you may be too lenient, allowing people to charge who may never pay. The bottom line: If your accounts receivable total doesn't match this guideline, you either don't have a clear credit policy or you're not following through.

Your credit policy needs to include specific guidelines that tell front-desk team members when a client can charge all or part of a bill. Your collections policy should outline the steps you'll take if an account remains unpaid.

Have a manager? Check your financial statements, making sure accounts receivable stays at about 2 percent of gross revenue for a small animal practice.

9 Delegate well

Effective practice managers know which tasks they need to do and those that can be delegated to others. You don't need to count inventory or address past due accounts personally; you need to make sure the job's done well. You may decide not to delegate such management duties as conducting team members' performance reviews or ensuring that you charge appropriately for all services rendered within the practice. Determining which areas of responsibility to delegate is up to you. However, there's no question that delegation is a necessary skill.

If you have a manager, then you're already reaping the rewards of delegation. Still, keep an eye out for other duties you could delegate and give your manager the freedom to delegate duties as well.

10 Walk your talk

I knew one practice manager who was technically competent—but refused to get her hands dirty. She never worked side-by-side with her employees or came in after hours or on weekends. She believed doing so would demean her in front of her team. I, on the other hand, worked many shifts when my technician was unable to come in, and I enjoyed working side-by-side with fellow teammates.

Dedicated practice managers and owner-managers must understand the power of being willing to perform the tasks they ask their staff to perform. Just bear in mind that there's a fine line between lending a helping hand and spending your time doing other people's work. Once you determine where that line is, you can earn big brownie points by working with your team members and showing them that you aren't asking them to do anything you wouldn't do yourself. To collect full point value, make sure you also attend all in-service and team meetings and after-hours continuing education.

Have a manager? Your job is to make sure your manager doesn't spend all day behind her desk. She needs to be out among your employees, helping them—and helping your practice.