Top 10 strategies for turbulent times

Stories of layoffs, plant closings, foreclosures, bankruptcies and declining demand dominate the news, and it seems there's no end in sight. What are veterinary practitioners and managers to do in times like these? This column is the first in a series to give you ideas and strategies to help you stay the course.

If you are in your mid-50s or older, you have lived through extreme economic upheavals, from the runaway inflation of the 1970s through the 1990s' dot-com bust. Having survived that, your worries now are mainly about having enough money to retire.

If you are younger, your main worries swirl around how to earn a living in your chosen profession.

In both instances, these are serious worries — the kind that feed fear and keep you up at night.

Fear is debilitating. It creates its own problems. Fear causes people to over-react or robs them of hope and energy when they need to be steady and strong. Fight the fear. Start by putting things in perspective, remembering the words of the Rev. Robert Schuller, who said, "Tough times never last, but tough people do."

You can get through this, and things will get better. Toughen up. Choose to focus on the things you have control over, and decide what you can do to improve your odds of success.

Veterinarians traditionally have fared better than most in recessions, but survival is neither a guarantee nor an entitlement. You will need to ensure that your practice is strong enough to make it through and poised to grow when business picks up again. Listed below are the first of 32 ideas and strategies to help you navigate the storm. Think of them as your toolbox for turbulent times.

1 Know your numbers

If ever there was a time to pay attention to your practice's numbers, it is now. One of your most important tasks is to learn to manage cash flow. A cash-flow forecast will help you look ahead and prepare for lean months. Some practices may find they are asset-rich but lack sufficient liquidity to meet their financial obligations. They will be caught short if they don't cut expenses or increase their cash on hand for payroll and bills. Any good accountant can help you project cash flow. Once you have it, review it monthly so you always know your cash position.

2 Be a leader — don't hide

It is unnerving to navigate these times when you have fears and insecurities. Don't isolate yourself, but keep talking with your team. They're afraid, too, and need you to share information with them and to help them refocus their energy on what they can do to help the practice. Staying future-focused can help. Discuss how much stronger and better the practice will be when the economy comes back. Work with your staff to make the needed changes for a better tomorrow.

3 Be more productive

The idea is not to work more, but to work smarter by matching your practice hours to your clients' hours. For instance, could you be more productive if you stayed open later on Mondays and closed earlier on Wednesdays? Would the practice be busier on Monday nights than on Wednesday afternoons, making each hour you are open more productive and profitable?

4 Try different days

If you are not open on Saturdays, could you open for half-days on Saturdays and close at noon on Fridays? Many practices discover that their revenue from Saturdays equals or exceeds that of a full day during the week. Saturday hours usually are popular with clients, too, because that is when they are home and can bring in their pets, creating a fuller schedule for you.

5 Call with reminders

Like you, clients lead busy lives, and it is not unusual to miss a veterinary appointment. Why not have team members call clients to help them schedule the care their pets need? This may not be popular with team members, but it can help fill the appointment book and preserve jobs.

Why not offer to pay someone extra to stay in the evening or work weekends to contact clients when they are most likely to have time to talk? Even if a staff member works eight hours making calls and brings in only one client, most practices would still be ahead financially, and at least one pet would be better off. More than likely, several would make appointments and appreciate the help.

Remember, employees who make the calls need coaching. The calls are meant to be helpful to clients. Make sure whoever makes them has access to the appointment book so appointments can be finalized the same day.

6 Involve the team on cutting hours

Let staff members know that they are valued, and you want to keep them all. Then explain the challenge of controlling payroll costs which, along with benefits and employers' taxes, can run as high as 50 percent of every dollar earned. When hours must be trimmed, find out if anyone is willing to take a voluntary layoff or work fewer hours. Or, if someone leaves, ask the others if they would prefer a hiring freeze so that those who are left can have more hours. If layoffs are needed anyway, think about letting problem employees go, even if they have been with the practice longer than others. Commitment and productivity, not longevity, are what the practice needs most.

This is the time to put the practice first, or soon no one may have a job.

7 Salaries and benefits

Health benefits in some cases have risen 12 percent to 30 percent in a single year, so much that it may be unsustainable for practice owners to continue footing the bill. Consider raising the deductible or reducing benefits to lower premiums and/or sharing part of the costs with employees. Also consider non-monetary benefits and perks you can afford to offer vs. salary increases. At one practice, the part-time team members wanted uniforms. That is all that it took to let them know they were valued. And how did the owner find out what they wanted? She took them to lunch and asked them. Sometimes, going one-on-one with employees is the smartest thing you can do to discover what they want when you can't give them money. Finally, to keep payroll manageable, consider giving only cost-of-living raises or freezing raises temporarily, with the promise of bonuses if the practice meets its goals.

8 Improve inventory management

Inventory costs can be controlled by increasing turns (reducing the amount of time items sit on the shelves) and by cutting the number of items stocked. Do you really need three different brands of heartworm preventive? Are you ordering too much? Even if you focused just on improving the management of your 20 top-selling inventory items, you should see a significant drop in your inventory expense. Your distributor, your accountant, your software vendor or a consultant usually can help you set up an inventory-management system. This is one of the top two expenses, and most practices would see significant improvement by tightening control in this area.

9 Delay selling the practice

If you feel you can't get a fair price for your practice in today's economy, consider delaying your sale. Right now, lenders are still lending and deals are still being done, but buyers with money have the advantage. If you can, wait out the market to get the best price. Conversely, if you're the one with the money, now could be a great time to buy a practice.

10 Consolidate or merge

A merger of two nearby practices can be a marriage made in heaven.

You can eliminate redundancies and reduce cost. You only need one X-ray unit, one software system, one building.

The new, combined practice will have the patrons of both practices as clients on Day 1 and more doctors to share the workload.

If this seems like an attractive option, get legal, accounting and human-resource assistance to help you make the transition.

Merging two practices might be smart, but it is seldom easy.

Karyn Gavzer, MBA, CVPM, is a veterinary business consultant and nationally known writer and speaker. She has more than 18 years' experience in the veterinary industry. She helped create public-education campaigns to improve pet health care and encourage more frequent veterinary visits. She works with practices, associations and industry. A Certified Veterinary Practice Manager, she is a founding member of VetPartners, formerly known as the Association of Veterinary Practice Management Consultants and Advisors. She can be reached at: karyn@karyngavzer.com