The first words of wisdom from Jen Braid, CPA, EA, on this podcast were that “recession-proofing” your equine veterinary business is not possible. “What you can do is soften the impact of a recession,” she stated.
58 percent of economists surveyed by the National Association for Business Economics (NABE) think there will be a recession in 2023, noted an article in Recruitonomics.
“A recession is temporary,” stressed Braid. “My best advice is to lead with optimism. This is temporary and we can get through this.”
Pandemic Lessons
She said veterinarians should think about how they succeeded in the pandemic. They should ask themselves: “What can I change to make money?”
She said the only ways to have more money on the bottom line are to actually make more money,or to spend less money.
She said not to add “surcharges” such as fuel to your costs. “Build those into your services,” she noted.
While many equine veterinarians have a high accounts receivable total, Braid recommended doing things to change that. “Offer incentives for up-front payment to keep cash flowing as things tighten up,” she recommended. Braid also said that practices should evaluate clients who are slow-pay and work with them to get payment at time of service.
If the recession hits (as the pandemic hit), “make sure to evaluate all costs and get rid of unnecessary costs,” Braid stated. “Payroll is necessary! Without staff, you can’t do it! Search for what can be eliminated in the budget.”
Braid reminded equine vets that veterinary medicine performed really well compared to other industries during the pandemic.
Pandemic Investing
Braid said the decision process isn’t different during a pandemic or recession when considering investing in equipment or other big expenditures. “If you don’t need it, don’t do it,” she advised.
She reminded practitioners that interest rates are “awful” and to consider if you can push a purchase off.
“Do you need it or do you want it?” she said to ask yourself.
Cash Reserves and Taxes
One thing equine practitioners can do now in order to help them during a recession is to build up cash reserves.
“Can you pay three months of payroll?” she said to ask yourself. “Can I get six months or a year of cash reserves?”
She reminded that it will take time for you and your clients to recover from a recession.
Braid also said there are options of how to protect your income. That includes deferring income to a retirement fund.
“Each situation is different,” she said. That’s why she recommended that each practitioner talk to a tax advisor and/or business advisor now. “If I do this this year, what does it mean for next year,” she advised asking.
About Jen Braid
Jennifer M. Braid, CPA, EA, is a principal in BFH, CPAs, Inc. (Braid-Forthofer-Heinke).
Jen has been employed at Marsha L. Heinke, CPA, Inc. (the predecessor firm) since January of 2005. During her tenure with the firm, Jen has managed many complex engagements and juggled work assignments with raising a family and advancing her education.
Jen earned her Associates Degree in Applied Business in Accounting from Cuyahoga County Community College, as well as her Bachelor of Business Administration in Accounting from Cleveland State University. In 2012, Jen passed all parts of the extremely challenging Certified Public Accountants examination, and in 2016, she furthered her credentialing in federal tax expertise by passing the Federal Enrolled Agent’s Exam (EA designation).
As an accounting professional, Jen’s responsibilities at BFH, CPAs, Inc. include performing consulting, accounting and tax services for many of our clients. She has primary responsibility for all of our tax clients including estimated tax planning and preparation of individual and business tax returns. Since the firm’s work is limited to serving veterinarians and their practices, Jen has developed a high level of expertise in financial and tax aspects of veterinary businesses. She is a trusted advisor to many practice owners, bookkeepers, and practice managers.
In addition to her work, Jen enjoys being with her family, including her two daughters, son, and family cat, Stitch.
Disclaimer
This content is subject to change without notice and is offered for informational use only. You are urged to consult with your individual business, financial, legal, tax and/or other advisors with respect to any information presented. Synchrony and any of its affiliates, including CareCredit (collectively, “Synchrony”), make no representations or warranties regarding this content and accept no liability for any loss or harm arising from the use of the information provided. All statements and opinions in this article are the sole opinions of the author and roundtable participants. Your receipt of this material constitutes your acceptance of these terms and conditions.
