The following article to help you determine if you are treating your practice as a job, or a business, was provided by James E. Guenther, DVM, MBA, MHA, CVPM, CVA, CEPA, CM&A, owner of Strategic Veterinary Consulting.
I just came across a blog from businessexitandsuccession.com that fits very nicely with you, an equine practitioner. Let me say from the very beginning you are an outstanding clinician working on a very delicate animal with very intense owners. I commend you for handling those situations with the grace and dedication of a highly respected professional. As a former equine practitioner I can say with all honesty I did feel very proud of what I accomplished with both patients and owners. My downfall was probably the business side of the equation, and I improved that side, just like you can.
The title of the blog mentioned above was: “The Better Your Business is Run–The Better Your Retirement Planning Options.”
Are you really prepared to transition from business ownership to doing something you always wanted to do? Will the sale of your business be your retirement or will it be the icing on the cake? The answer lies in the simple truth: Do you have a business or a job?
The better your business is running, the more options you have for exiting successfully. It is has been shown via practice sales that businesses that are profitable, have systems in place, are efficient and are effective are more attractive to buyers. “Why?” you ask. The answer is simple: Cash flow and less business risk to buyers.
How does your business stack up against the above statement?
I totally realize the day-to-day grind of practice sometimes leaves us little quality time to address the aches and pains of the business. Successful owners have made time or have hired the quality people (staff or advisors) that will bring them the information and expertise to make better business decisions. Those successful owners are not always working in the practice, but take time to work on the practice to continually improve the business.
Here is a checklist for you to consider performing on a regular basis. Rate yourself on whether you do these tasks, and if you do them, how well. The idea is for you to treat your business as a business, not merely a job. There is value at stake for one of your largest assets in your retirement portfolio–your practice.
- Do you, on a monthly basis, review your Income Statement and Balance Sheet to obtain a better idea of how the business is doing?
- Have you set up Key Performance Indicators (KPI) to evaluate how the business is doing?
- If you do review these documents, do you make decisions or changes based on these documents?
- Do you discuss these statements with your CPA or your business coach?
- Have you set up systems or processes that improve the efficiency of the business?
- Do you measure and/or monitor success of these processes?
- Do you take corrective action if a measurement is not where it needs to be?
- Do you know who your market is?
- Are your reaching your market with social media, CE and other educational means?
- Do you honor the top 10% of your clients on an annual basis?
- Do you listen to the needs of your clients and create services that meet these needs?
- What is the Culture of your Business?
- Is the Culture practiced by all employees, even the owner?
- Do you have an Inventory System in place?
- Are you able to account for all products on a weekly basis with your Inventory System
- How effective is your Accounts Receivable system?
- Is the Accounts Receivable system being worked and monitored on a regular basis?
- Are you able to collect more at the time of service with Credit Card devices?
If you can honestly answer that you are doing 80% of the above, you should pat yourself on the back because I bet you and your business are doing very well. If on the other hand you are doing less than 80%, you have some work to do to make a profitable business.
The more successful you can make your equine practice, the more options you have available when it is time to sell. Most, if not all, brokers and transactional attorneys will say if you have a successful business and have taken annual distributions (return on investments) out of the practice and have invested wisely, you have a multitude of options. The reason is simple: You have your retirement monies accounted for and the sale of the practice is not mandatory for retirement. You are in the driver’s seat when it is time to transition onto the next phase of your life because you have generated your wealth outside of veterinary medicine.
The key to success is to start now! The sooner you plan for the future, the sooner you can transition into doing something new and exciting. Transitioning out of your business is scary if you don’t know where to start. Become the CEO of your business and plan for your future success today!