7 bad moves

You don't always have to be a trailblazer. Your predecessors likely dealt with practice management problems that appear to be unique to your operation.

Of course, some found successful solutions. Others learned from the mistakes they made when they took a wrong fork in the management road.

Here are seven of the most common management mistakes that practitioners make—and advice about how you can avoid each one.

Mistake 1: Do it all yourself

You've heard it many times: If you want something done right, do it yourself. It's a classic philosophy with an undeniable grain of truth. However, when it comes to running a busy veterinary practice, too many owners suffer from a dangerous overdose of do-it-yourself-itis. A failure to understand the importance and necessity of delegating hinders growth in small businesses, say management consultants Andrea Michalek, an independent consultant in Philadelphia, and Wally Adamchik, a consultant with FireStarter Speaking and Consulting in Raleigh, N.C.

"Just because you can complete a task, doesn't mean you should," says Michalek. "Outsource anything that's not a core competency of your business. Without hiring any additional employees, it's now possible to get the outside help you need at prices you can afford."

Adamchik agrees you should look outside for help with some jobs. "Some business owners and professionals go broke saving money," he says. "Rather than outsource their Web design and maintenance, for example, they do it themselves, because they can. Of course, this takes them away from the work they do that makes the biggest difference to the business. They're saving money doing their own Web work, but they're losing money in the long run.

"Of course, looking to outside help often won't be necessary. Given a proper opportunity, your team members will likely surprise you with positive results."

Mistake 2: Misunderstand marketing's role

Often practitioners get so busy dealing with day-to-day operations that they never get around to putting together a business-building marketing program. That's a serious mistake. Marketing is a basic building block. Yet many owners shy away from all but the most obvious ways to promote themselves and their practices.

Does your entire marketing program consist of an expensive phone directory ad? If so, it's time to think about a more comprehensive approach.

Take weekends off

While advertising is an essential part of marketing, it's only that—a part. An effective marketing program embraces all facets of your practice. To be effective, you must nurture and promote your business image, sell yourself as well as your practice, and concentrate on making your services the best choice for your prospective clients. There's no other way. Competitive prices alone won't do it. And a high degree of professional skill alone won't do it either.

Mistake 3: Fail to fire bad apples

Discharging an unproductive or disruptive employee is the sort of unpleasant task most professionals dread. But failing to take action when necessary can be a costly mistake.

"Not firing a problem worker is one of the worst operating mistakes you can make," says James Walsh author of Rightful Termination: Defensive Strategies for Hiring and Firing in the Lawsuit-Happy '90s (Merritt Publishing, 1997). "Failing to take action keeps the problem-worker around to create more trouble, making a bad situation worse. That's not fair to you or to your other employees."

Delegate hiring

A lone problem-team-member in a large company that has dozens or hundreds of employees can present a serious threat to productivity and profits; in a small practice, it can be deadly.

"Failing to terminate a problem-employee can result in added stress on other employees who may need to take on more work, and it can create dissension among those who can't understand why the employee is being kept," says management consultant Linda Hanson with LLH Enterprises in Dallas. "All of this, in turn, can negatively affect the treatment of clients."

In short, once you identify a disruptive or unproductive employee, it's best to face up to the ugly task of terminating the relationship. Postponing it can only lead to a more serious problem later on.

Mistake 4: Hire friends and family

Many practices owe their success, at least in part, to an employee who's either a relative or friend of the owner. When such a relationship works, it can be very successful. But when it doesn't work, it can be disastrous.

"Use extreme care if you're bringing a friend or relative into your business," says Katharine Hansen, author and career consultant at Quintessential Careers in DeLand, Fla. "If the relationship doesn't work out, terminating it can be a serious problem."

Hansen talks about one business owner who hired her sister. "Now she'd like to sell the business to go back to school to teach, but she finds herself responsible for her sister's employment. It's just one example of the kinds of unexpected traps that lie in wait for business owners who hire friends or family members."

Mistake 5: Manage cash unprofitably

Making the sale is only the first part of a profitable business transaction. Your approach to managing the revenue generated by your sales greatly influences the amount that will find its way to your bottom line.

You never want your money to lie idle. So the worst place to deposit your daily receipts is in a low-interest or even a no-interest checking account.

Instead, open a money market account at your bank and link it to your checking account for phone or online transfers. From that point on, deposit your daily receipts into the money market account where they'll immediately start drawing interest.

Make sure you never deposit receipts directly into a checking account. Keep a minimum balance in the checking account, and transfer cash by phone or online only as needed to cover the checks written.

Worst money sin of all: leaving checks or cash lying around in a desk drawer until you can get to the bank. Using every cent of your money to make money is the shortest, smartest road to a healthy bottom line.

Mistake 6: Be slow to get advice

"By their very nature, entrepreneurs and professionals are independent thinkers," says management consultant Carl Robinson, Ph.D., with Advanced Leadership Consulting, based in Seattle. "That's why they're often reluctant to reach out to others for help in areas where their own experience may be lacking."

Get technical

He recommends that you form a peer group made up of owners of local small businesses. "In essence, you're forming a no-cost advisory board. In a successful peer group, everyone helps everyone else through the exchange of experience and ideas," he says. "A good place to locate potential members of a peer group is at local chapters of service organizations such as Rotary, Kiwanis, or Lions."

Mistake 7: Neglect good hiring practices

"One of the most common mistakes small business owners make is hiring poorly," says Robinson. Most professionals in practice have never received any training in the selection and assessment of employees. So they tend to fall victim to what Robinson calls interview bias errors. "If you make a poor hiring decision when you have fewer than 10 employees," he says, "you can be derailed big time."

Robinson offers these suggestions:

• Prepare interview questions in advance. Take notes so you won't forget what the candidates said. "I guarantee that you'll either forget what the first interviewee said or mix his/her responses with subsequent interviewees if you don't take notes," he says. Ask each candidate the same questions so that you can compare answers and more accurately compare the candidates.

• Don't go too far too fast. Don't make a hiring decision based on your first interview alone. Take your time. Compare the candidates.

• Make the candidates feel comfortable. People reveal more if they aren't on guard. If you make the interview feel like an interrogation you'll know how they respond to questioning under pressure, but it's unlikely they'll tell you much that's revealing about themselves because they'll be on the defensive.

• Sell candidates on the job and your practice, but don't talk more than 20 percent of the time. Let the candidates do most of the talking

• Ask open-ended questions. These would be questions that require more elaborate answers—not a yes or no.

There is, of course, much more to skillful hiring. Robinson advises starting with what hiring experts call structured questions—a static set to ask everyone so you can compare candidates responses side by side. He suggests using a standardized worksheet to do this, checking off each applicant's strengths against the job skills required for the position.

Of course, these seven missteps aren't the only management errors that can negatively affect your practice. But steering clear of them can go a long way toward optimizing your bottom line.

William J. Lynott is a freelance writer and management consultant in Abington, Pa., specializing in business and financial topics. Send questions or comments to ve@advanstar.com.