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you will likely lose more than a few dollars; you will lose the more important thing – the client. Ultimate- ly, it is not in your control where they fill their med- ication needs. Te best thing you can do is educate them. Yes, we all know that there are nefarious rouges in the veterinary sales market.
refuse to fax or call in prescriptions to outlets which you do not trust or have faith in.
Online stores are also a viable option. You can enlist the help of the multitude of companies that do it for you. We are all aware of the massive choices that exist in heart- worm and flea/ tick control products. I recommend that offices pick no more than 2 of each and sell the rest of the products through an online store. You, therefore, do not have to have deep stocks of multiple products on the shelf tying up money. For example, there are a few flea/ tick products that work well for mange and ear mites. You do not need to stock those products just to use in the rare occasion they would be needed. Let someone else stock them, make the sale, and give you a little profit.
While true that online and brick and mortar sources will continue to cut into our profits for chronic medications (heartworm, flea/ tick, arthritis, thyroid, allergy and chronic eye conditions, etc.), we will still serve the cli- ent with oral/ ophthalmic antibiotics, post-operative pain control and injectables. We simply cannot make up the losses of the chronic medication by increasing sales of the non-shopped drugs. So, how do we begin to combat the pharmacy loses that are going to eventually erode your revenue? Te answer is quite simple. You do the things that owners cannot get anywhere else – service! Remem- ber? Te things you were trained to do but are afraid to charge appropriately for?
For the entire existence of veterinary medicine, owners have truly received a great bargain in most areas of our profession. For whatever reason, we have been afraid to admit it or do not know better – likely a little of both. Shockingly, I have for over a decade been a proponent of losing all of the in-clinic veterinary pharmacy/ food sales except for those drugs that are immediately needed.
I
really want to be paid for my expertise and service. I hate selling things and while most pharmaceuticals are not really considered selling, I nonetheless would be happier writing prescriptions. Tink of the time and effort that could be devoted to other, more profitable work – seeing clients and practicing medicine!
So what is the first step to taking your practice to the level where you will not be burdened by the losses in pharmacy revenue that will be forthcoming? You start by making an honest assessment of your fee sched-
6 KVMA News ule – you know, the things you do that clients pay for. I Te other strategy is to
have rarely worked with an office that had fees that were appropriate for their demographic. In other words, most offices are under producing by almost 22%. Tat is, for a hospital that bills out $500k a year, a NET gain of $110k could be added to income (profit) by not spending a sin- gle penny if the fee schedule was where it should be! Tis is a common issue in every state and almost every prac- tice. But why? Again, the guilt of charging clients and the perception we think they might have. Yes, it costs a lot of money to run a quality practice; a fact that every pet owner fails to consider and, much less, understand. You must have fees reflective of what the true costs are to keep your doors open and generate a profit for the owner. Your fee schedule should be updated every 6 months (services) and changed more frequently as your costs go up (lab fees you pay, equipment costs, drugs, sundry items, etc.). Shopped services (vaccines, spays, dentals, etc.) should be based on the local competitors and your investment. You will not be able to compete with the low-cost offices and don’t try. Let them do all the spays and neuters for little profit. You do the ones where pre-surgical, bloodwork, monitoring, new suture, gas anesthesia and pain medica- tions are used and for which you are paid. You know, the way you were trained to do. I have no problem with those hospitals that desire to be low-cost and provide services for that segment of the pet population. Just remember, they have to work twice as hard to generate profits and, ultimately, will be the first casualties as the rest of the pro- fession moves forward with appropriate service fees.
In conclusion, your fees likely need to be adjusted --- yesterday.
It is probable that you are behind where you
should be. Te average household income of your clients that live 1, 3 and 5 miles from your door is the determi- nate of your fee schedule. Tere are multitudes of studies that show that these clients make up almost 90% of your income (except those practices in rural areas). Knowing those figures allows you to set costs that are tolerable for most of these households. Remember, profit is not a bad word; without it, none of us would have a job. You will never discount yourself to prosperity and you should never be afraid to charge appropriately for what you do. After all, the discounts and under-charging you provide allow your clients to put their kids through college and have a comfortable retirement.
If you need help estab-
lishing a fee schedule for your practice, please feel free to reach out to me.
(1) American Pet Products Association, Pet Industry Market Size and Statistics 2017; retrieved online November 05, 2017: www.
americanpetproducts.org
Copyright 2017, J.A. Keith
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