Take the tough steps needed to work, live with less

The only thing we can depend on is that nothing stays the same. Change is constant. We can resist, but we're just deceiving ourselves. It's like being in the ocean and believing we can fight the current and tides.

It is only human to want our practices to stay the same. They can define our lives, our identity and our financial security. Now, decreasing client compliance with our sincere recommendations rattles our foundation. What happened to "Practicing great medicine with great client service ensures our success and our futures?"

Why did the number of job postings for associates suddenly shrink? Why are so many formerly solo practitioners concerned that they may have erred in taking on their first or an additional associate?

A national survey of pet owners released at the North American Veterinary Conference showed that if financial issues cause pet owners to curtail their monthly expenses, they are far more likely to cut back on luxury items like electronics or even groceries and household goods than on pet care.

The survey showed that almost half of pet owners say they'd cut back on themselves before their pets.

Yet for a majority of practices, visits continue to decline. It was bad before the recession. With lots more practicing veterinarians predicted in 2010 than in 2000, and only 10 percent more pets for them to treat, transaction numbers have slipped for most of the last decade. Northern states are suffering the most from a southerly and westerly migration. In fact, by 2015, about 55 million Americans, according to American Demographics, will have relocated.

Now cometh the recession.

The watchword is "less."

Who doesn't have second thoughts about purchases that were automatic just a few years ago?

We've heard recent proclamations that the recession is over, but in fact the true measure of unemployment just hit 16.7 percent. The current government jobless figure of just under 10 percent doesn't include those unemployed over 12 months — or those who have had to settle for a part-time job at half their prior income.

So, let's talk about less.

Clients spend less, and our bottom line takes a nosedive. We clearly need to provide for ourselves and our staff by lowering expenses. It's an absolute necessity, and it's horrifically difficult.

Most of us have a hard time searching back through our long-term memories for the tactics that worked when we started a practice. Most veterinarians scraped together working capital and then worked their butts off to make it happen. We cleaned our own cages and runs. We ran to answer phones ourselves if the only assistant we had was holding a dog. We made do with less — much less.

Now, after years with appropriate staffing (3.6 staff per veterinarian), we are faced with the reverse trend. Payrolls must be reduced. California did it the easy way; they just cut every worker's salary by 14 percent. That would be a good way to explode any practice. The bottom line is that basic payroll (before benefits) cannot exceed one-fifth of revenue without practice failure. Further, benefits have to be trimmed to no more than 15 percent of anyone's basic salary. Check out www.vethelp.us.

The usual result of an increase in minimum wage (10.7 percent) is that staff, earning more than the new minimum wage, will want a 10.7 percent increase as well. Other than the high-school workers we employ at minimum wage, this economy just will not support that now. Where will the 10.7 percent come from? Remember, less is less.

The era of paying associates a flat salary is rapidly coming to an end. Percentage compensation is the only way we can afford associates. If less is coming in, then less must go out. Our appreciation for associates is high, but their average client charge is declining.

Contracts will have to be rewritten, and those practice owners who lack the backbone to demand new contract negotiations will wind up paying out of their 401(k)s. Do I hear dozens of horror stories of practice owners depleting, not only their own, but their spouses' retirement savings to save a hospital? I certainly do.

Do I run into those desperately seeking an on-site consultation when it's past time to salvage a practice? I certainly do.

Since 1995, in my presentations I have used a projected slide that indicated this crushing recession would occur in 2008. The writing was literally on the wall.

Be assured that 2010 will see an expansion of less.

You must deal with less today if your bottom line is to survive tomorrow.

Dr. Snyder, a well-known consultant, can be reached at 112 Harmon Cove Towers Secaucus, NJ 07094; (800) 292-7995; Vethelp@comcast.net; fax: (866) 908-6986.