How to become a veterinary business owner: build a business plan
All clinicians know the importance of a cohesive treatment plan when managing patient care. Sadly it seems that fewer vets have understood that it's just as important to produce a joined-up business plan when opening and managing a practice. The commercial side of things does not always come easy to vets - hardly surprising when our expertise is in medicine and surgery - but simply being a great vet is not enough to guarantee the practice will be financially viable. Fortunately the basic principles of planning and managing a practice are proven, and by building some key elements into your business plan early on you will give your new practice the best prognosis.
And you do need to start early, communicating your values to potential clients and encouraging pre-registration six months before opening your doors. Because as the old adage goes - failing to plan is planning to fail!
Understand your market and tailor your service accordingly
Whilst all small animal practices fundamentally do the same things as far as clients are concerned, and one equine practice is pretty similar to another; the way in which these core services are delivered varies enormously. Perhaps your aim is to offer basic care at a budget price? Focus on exotics, provide full seven-day opening or schedule long consultations as standard? The most successful businesses have a clear point of difference that is motivating to pet and horse owners and can be clearly felt in every aspect of your service. Walking the talk.
Optimising the success of your practice actually 'just' comes down to doing the basics really well. The costs of setting up and running a practice follow a fairly standard model in terms of how many people you need (one Full Time Equivalent Vet for every 1,000 active clients, three and a half support people for every FTE vet) and the sort of kit required. What ultimately makes the difference, and the bit you can control through effective planning, are the numbers of people coming through the door to pay for your services, especially in the first six months of opening. Why should owners ditch their current practice and move to you? (Because there aren't many parts of the UK that don't already have enough vets for the local cat, dog and horse population).
Advance planning that takes into account the real world around you is key, and good planning requires facts, data and insight to shape it correctly. Producing the most detailed plan focused on what you want to deliver is destined to fail if that plan isn't built on meeting the needs and exceeding the demands of your clients from day one.
A successful business plan for a new practice will address three key objectives:
1. Balanced Score Card audit - a strategic performance management tool used to keep track of business performance and outside influences. The balanced scorecard process creates a dataset of key practice performance figures from four areas: Finance, Team, Customer, Operational Effectiveness
2. Understanding the customer experience. There are four key stages to the customer journey:
- Getting noticed
- Filling the funnel
- Customer experience
- Word of mouth
Understanding how to smooth the path for potential clients to find and experience you across each of these is key.
3. Mapping the revenue journey. Looking in detail at where the practice will make, spend and potentially lose money will identify where gaps can be filled and profitability increased. Simply charging correctly for your time can make one of the biggest positive impacts on the bottom line. It's so important to get your pricing correct for your business - charge appropriately for the unique and valuable service your team provide and avoid the all-too common mistake of 'charging what everyone else does round here'.
It might seem daunting, but delivering operating profit targets six months after opening is entirely achievable when you plan for success with a successful business plan.