Run a Great Practice and Maximize Your Options
By Dr. Michele Drake and Harley Orion
When I was 27 years old and just getting started in my first practice, I was incredibly fortunate to have a great mentor. His name was Dr. Terry Roberts; he was a retired DVM who had run a successful practice, and he helped me grow not only as a doctor but also as a business owner.
He helped me learn to run my practice as a business, so it provides an amazing lifestyle and income for me and my family, while also delivering great care and supporting a top-notch staff.
This is not easy. Especially today where there are so many corporations, products, and technologies that offer to “help” the DVM, but in many cases are really just chewing away at your bottom line. Sadly even our largest associations and organizations are often recommending strategies that sound good on paper, but don’t actually deliver good business results in practice. So it’s very important who you listen to – and find great mentors who have a proven track record.
Run It Like You Might Have To Sell It
Of all the things I learned from Dr. Roberts, the most important and fundamental thing he taught me – the principle that has guided me in building my practice for many years now – is this: “Always run your practice like you might have to sell it in three to six months.”
In other words, always keep your practice in tip-top shape. Because life happens. People become ill, their parents need help, something happens with their finances – many things can change suddenly that would cause you to need to sell the practice. So you always want to be sure that you're set up right, so that if something like that did happen, you'd have the opportunity to sell at the best possible price and not as a “fire sale.”
But even more importantly, if you run your practice that way all the time, then you're always maximizing your profitability and your ability to take care of your staff and your family. Ultimately, the things that would make your practice valuable if you had to sell it, are also the things that make a practice a joy to own.
The Joy of Ownership
Without a doubt, having my practice set up well has been transformative – not only for my own life and my family, but for my doctors and staff as well.
It breaks my heart to see all the stories in our vetmed press and in social media groups about burnout, stress and depression among practice owners and their teams – because it doesn’t have to be this way. While I have tremendous empathy for anyone who is suffering in their work and their life, I truly feel that these are symptoms of a dysfunctional practice – and that the practice owner always has the ability to fix them. Running a practice doesn’t have to be exhausting, draining and stressful. If you do it right, it can be the most wonderful business in the world.
It takes discipline and effort to get it right. But now that I’ve built my practice up to a level where I can really step back from it and do everything I want to in my life – while still making a fantastic income – I can tell you it’s more than worth the effort.
What Are the Rewards?
I have an amazing life, and I’m so grateful for the opportunities that having a successful practice has created. I spend time with my boys, I travel to beautiful places, and I have complete financial freedom.
That’s not to say I don’t work hard. When COVID hit and we were short-staffed, I logged more surgery hours than I have in many years. We got through it as a team, and during the latest “pandemic puppy” boom, my practice has expanded about five times more than the national average. So “busy” doesn’t begin to describe it – as I’m sure other DVMs can attest! But at the same time, because the practice is well-run, it’s possible for us to hire the talent we need to keep up with this growth, without anyone being driven to exhaustion and burnout.
And when the environment is positive and functional, the work is more rewarding. When I’m working in my practice, I’m mentoring and leading an amazingly talented team of doctors and staff who provide the best care in our local community. I’m proud to say we’ve been voted the best veterinary practice in San Diego for eight years running.
And it’s rewarding not only for me as an owner but for my staff as well. My staff understand who we are and where we're headed, and they know we don't allow dysfunction in our practice. It’s not that we're perfect; but even when things get a little crazy, or even if someone might talk trash for a minute, it settles down quickly because everyone knows what kind of culture we are creating, and they won’t tolerate bad behavior.
All the effort we put into this result not only in having a staff that stays with us, but also a staff that truly enjoy being there. And I enjoy them as well. We all actually really like each other, and we enjoy working together. Life is short – you should be in a place where you're cared for and where you enjoy your work. As a practice owner, you are the one that has the power to create that kind of environment.
A Few Key Elements of a Well-Run Practice
There are a lot of elements that go into doing this. But a few of the most significant ones are:
Get your pricing right.
Know your local market. Understand what competitors are charging. Understand the costs that go into the price you charge. Many DVMs under-charge for their services, which doesn’t just hurt their profitability – it actually hurts their business as a whole, because they don’t have the budget to provide a good facility, good pay for their team and other things that lead to having a thriving practice.
Know your numbers.
Understand your staffing costs, drugs and supplies costs, and inventory. Watch your numbers constantly so that you can recognize when something is getting out of line, and put it right before it becomes a serious problem. There are always “reasons” why the numbers are out of line – but they don’t have to become excuses.
For example, when we hire a lot of new staff, the payroll and profitability numbers will get upset for a little while until those staff are fully productive. Training time can wear on the staff. It costs money to train people, and while the growth does eventually catch up and turn into profitability, it doesn’t happen immediately. It’s important to watch your numbers closely and see for example, if your training program is working well and new staff are becoming productive quickly. Or on the other hand, if you’re struggling to get them productive, you may need to look at either altering your training program or your hiring approach so that you’re getting the right kind of people that can be successful.
Sometimes a new team member isn’t working out or is creating dysfunction and that shows up in lower numbers, and they need to be retrained or let go.
I’ve also found that when I’ve faced personal challenges, such as when my parents passed away, and I had to take my eye off the practice a little, this can show up in the numbers getting a little worse for a bit.
But if you always have a commitment to consistently just get back to those numbers, you’ll set yourself up for success and you’ll be able to find situations that are hurting your profitability and set them straight. The numbers are something you can rely on. They’ll tell you how you’re doing better than anything else.
Commit to quality – and follow through.
I’m totally committed to ensuring the success of every member of my team, and the best possible outcome for every patient that comes through our doors.
Things will always go wrong in a practice, but it’s the way you respond that determines what level you’re playing at as a practice owner. It requires looking for how you can be responsible and take control of situations, rather than looking for someone to blame when things happen.
It starts with simple things. Someone dropped an instrument in the practice and broke it. Why? Were they not trained properly on how to handle it? Is the space not organized well? Were they exhausted because they’re working too many hours? Whenever things go wrong, I’m honestly curious to understand why, and I’m not afraid to confront situations – in a kind way – and ask questions until I find out the cause, so I can fix it and improve how our hospital runs.
Similarly, if we have an upset client, I’ll really dig in and find out what happened. Did we make a mistake? Were the client’s expectations unrealistic? Could we have managed them better? Was there an employee that wasn’t trained enough?
Having a great practice means constantly being willing to look at situations where something went wrong, or where we didn’t meet our standards for quality or live up to our values, and take action to correct it.
Build and empower your team.
One thing I think many DVMs don’t fully understand is that a leader is actually more valuable if they create a business that can run successfully without them. Of course it always feels good to be “needed.” But if your practice is so dependent on you that it will fall apart if you take a vacation or reduce your hours, then you have a problem.
Any acquirer who is looking to buy your practice will know that once you “cash out” you’ll most likely be on your way out the door as soon as possible. So if it’s obvious that the practice is totally dependent on you, this will greatly reduce your valuation. On the other hand, if it’s clear that there’s a strong, organized and disciplined leadership team in place, your practice is much more valuable.
And of course like all the other principles outlined here, even if you don’t sell, having an empowered and effective team is a massive advantage. It’s the key to being able to “step back” and still make a great income from your practice for years to come.
I have a great practice manager who has been with me since day one. She's grown tremendously with the practice. And so have my amazing doctors! Hiring well and keeping strong people in place allows me to step out when I need to. Of course there are times when I need to be in the practice more – during COVID I was there every day. But then there are other times when things are running really smoothly and I can go off and do the things I want to do in my life, so that I don't get burnt out. I’ve been doing this for almost 30 years – and because I have the ability to step back from time to time, I’ve really maintained my love of the profession.
It Takes Work – But It’s Worth It
There’s a ton of work that goes into developing and communicating our values, our mission, and strategy; into planning and managing our numbers; and into building and mentoring a leadership team.
Discipline is a key element. Sometimes you have the right plan but it’s just not being fully executed. Or it’s working but you need to stick with it and be consistent. Many practice owners get frustrated too quickly and give up on their plans and goals, leading to burnout because they don’t see enough results for all their hard work.
Being a disciplined business owner allows me to continually look at the trends that are going on, and how cultures are changing, and what's going on in our industry. I can decide what I want to do because I can step outside of my practice while still owning it, because I’ve taken all the steps I outlined above.
A Strong Practice Gives You Options
Today, my biggest area of focus is building a leadership team that can do even more without me. This will allow me to continue to step out of the practice more, while having it continue to run successfully for years to come.
Will I sell my practice someday? Maybe. But in the meantime, by always running a productive, effective, and thriving business, I’ve maximized my options. I believe that any practice owner can do the same, and I hope that some of the tactics I’ve outlined here will help you make it happen!
If you’re looking for ways to get more control over your practice, please connect with our GeniusVets team – we have amazing resources for recruitment, human resources and practice communications to help you.