WE read much about the
challenges facing the veterinary
profession but, as 2014 gets under
way, there are real signs that
economic conditions are
improving – if slowly – and I think
this year has the potential to be
better so long as practices
embrace changes in the
competitive landscape and really
capitalise on their strengths.
Before we look forward, let’s look
back at 2013.
It was
another
tough year.
The opening
of new sites
increased
competition
further for
practices,
while online pharmacies continued to
suck drug revenues out of them.
Perhaps the huge growth of
buying groups was the most
significant development. More than
80% of independent practices are
now members – around 1,300
practices in all. Last year was the year
buying groups came of age.
I was surprised by the buoyancy
of the locum market. Our own locum
agency, Pet Medic Recruitment, was
very busy during the summer – which
we expected. What we didn’t expect
was for the strong demand to
continue unabated until the end of
the year.
With talk of new veterinary
schools and fears of a potential
“oversupply” of qualified staff, it may
be comforting for the profession to
know that, given the current short
supply of locums at least, any
possible oversupply appears to be
some time off.
So, looking forward, what’s the
outlook for practices – independent
or otherwise – and how can they take
advantage of improving economic
conditions?
n If you’re an independent practice
and not yet in a buying group, join
one! The financial benefit is clear, but
do your research first.
They all offer buying discounts, of course, but
check what additional support and
services they can offer you to help
you differentiate your practice. I
expect some consolidation among the
groups during 2014 as, with few
practices left to target, some pursue
growth targets by acquisition. We’re
already seeing this consolidation in
the internet pharmacy arena. In 2012,
MedicAnimal’s turnover was £45
million, a growth achieved primarily through acquisition.
A player of this
size in the market is a challenge to us
all
n While we’re looking at the
veterinary supply chain, at CVS we’re
noticing a trend for insurance
providers to start directing their
clients to particular practices for
treatment – a model well established
in the automotive sector. While by no
means all insurance companies are
doing this, assuming the profession
would prefer not to have insurance
companies controlling where their
clients go, it might be worth checking
out the policies of any insurance
company you recommend.
- Focus on what your practice is
good at: delivering top quality clinical
care and service to your patients and
their owners. Review the level of
clinical work you undertake. If you
invested in up-skilling your team,
could you do more with your existing
staff and refer less?
With so much drug revenue
being lost online, clinical expertise is
your financial bedrock so make sure
you’re extracting the maximum value
from it. Your team will thank you for
the investment in their own
development and will be more highly
motivated as a result.
n What about your out-of-hours
care? If you extended your opening
hours slightly or offered Saturday
openings, could you recoup some of
what you currently lose to an external
provider? It’s all about reversing the
cycle of “income out” – whether to
an online pharmacy, referral practice
or OOH supplier – and instead
bringing income back “in”.
Sometimes making a few small tweaks
can add up to something quite
significant.
n Invest in commercial acumen.
You’re running a business as well as a
clinical practice and, in today’s
market, you need to be operating at
maximum efficiency and
effectiveness. Perhaps you have a
capable practice manager who could
take a more strategic role or perhaps
a member of your clinical team is
interested in the business side of
things? However you do it, you must
have an individual firmly focused on
the performance and productivity of
the practice.
- Play your trump card. In an
independent practice, this is the
owner. Clients love the fact that the
owner gives his or her personal
attention to their pet. The
relationship he or she has with both
the clients and the team is business
gold, so use it! If you’re the owner,
make sure you’re regularly in practice
and visibly so – not permanently
locked away in the consulting room.
Make a point of greeting clients and
their pets in the waiting room.
Get out and about in the community and
make your presence felt.
n Don’t be frightened if a new
practice opens up down the road. It
will have its own challenges while you
have 12 months to capitalise on your
loyal client base. Stand tall and go for
it during this window of opportunity.
Make sure your website and social
media are up to scratch; set up a
loyalty scheme if you don’t yet have
one (what are you waiting for?); look
at your drug pricing; get into the local
papers and generally do everything
you can to boost your profile and
position yourselves at the heart of the
local community. You’ll be amazed at
the results!
For all practices, 2014 is a year of
opportunity. Many of the trends
we’ve seen – and increasing
competition is certainly one of these
– are set to continue but, refreshingly,
against the backdrop of a slowly
improving economy, it’s time for
some positive thinking.
