Are You Guilty of These 5 Common Practice Owner Financial Mistakes?
Chances are, you got into veterinary medicine because you love animals and want to make a difference in the lives of pets and their owners. While this desire is certainly noble, it doesn’t always translate well to the business side of things. This is why many practice owners fall into financial traps that can hinder their ability to succeed. If you aren’t particularly financially-savvy (or even if you happen to be), here are a few money-related mistakes to avoid in your own practice.
Working in the business rather than ON the business.
As mentioned, your passion is animal care, which means you’d probably prefer to skip the boring business stuff and just focus on serving your patients. Do you need to be an amazing vet? Absolutely. But if you’re neglecting the nitty gritty parts of your business, then you’ll never truly reach your fullest potential. At the end of the day, the goal is to be an owner first, and a veterinarian second. This may mean having to delegate, so consider enlisting the help of your staff to free up some of your time.
Not compensating your team properly.
There are three steps to successful practice staffing: recruiting, rewarding and retaining. You must emphasize each of these steps, otherwise you will either not be able to attract and hire top talent, or you won’t be able to keep them. Make sure you are paying a fair wage and offering the kind of compensation perks and benefits that are competitive in your area. Once you’ve landed those big fish, be sure that they feel appreciated. This will foster loyalty, which is better for you and your clients.
Not knowing your numbers.
Reviewing profit and loss statements is probably not how you’d prefer to spend an afternoon, but understanding your numbers is critical to the success of your practice. Not only will being involved with your accounting help you maximize profits, but keeping good records and updating them regularly will put you in a much better position should you ever decide to sell your practice. And in the meantime, it’ll make tax season far less stressful.
Not paying yourself.
Your veterinary practice should help you build your net worth, not actually be your net worth. There’s a difference, and it’s a very important one. Make sure your business is set up properly so that as you build the wealth of your practice, you’ll also steadily build your own finances. If you’re unsure of how to set this up, speak with an experienced accountant or tax professional.
Not having an exit plan.
Even if the thought of selling your practice is the farthest thing from your mind right now, having an exit plan is an essential part of running a business. When it comes time to hang up the stethoscope, you want to have enough financial stability that you’ll be able to comfortably enjoy your retirement. As such, the question of how much you’ll need in order to do so should be at the forefront of all of your business decisions, even if that goal is far off in the future.
As a practice owner, you have two main objectives: provide exceptional quality medicine to your patients and make sound financial decisions for your business. You simply cannot achieve sustainable success if you focus only on the former and not on the latter. The good news is, it’s never too late to turn things around. If you recognize yourself in any of the common financial mistakes listed above, it’s time to crack down and right the ship. Your future self will thank you.