PORTLAND, Ore. – Increasing the value of your business requires more than just top-line growth. Managing costs is as important as increasing client numbers and revenue. iVET360, a practice management services company that works with veterinary hospitals around the country, is sharing their best practices for expanding gross margins and increasing the value of their clients’ veterinary hospitals.
iVET360 recommends all veterinary hospitals take the following actions to track and expand their margins:
Review terms with vendors. How much you pay for goods directly impacts your gross profit margin. Regularly review your terms with your lab and pharmaceutical vendors and all distributors as your economies of scale grow. This way, you’re always getting the best deal possible. Also, consider joining industry groups like Veterinary Management Group or Veterinary Growth Partners, as you’ll benefit from their group purchasing power.
Adjust your fee structure. Your costs for products and services often increase over the course of a year thanks to inflation, demand, industry standards and other factors. To keep up with rising costs, adjust your fee structure by three to five percent at least annually. Look closely at what you charge for exams, lab work and other veterinary services, and make sure your listed price considers cost increases for goods and supplies. Increase the price of your inventory items, like pet foods and medications, as your vendors increase your costs as well. These markups on products should be done regularly. Your iVET360 analytics manager will help you set up a schedule. Throughout this process, take your local pricing structure and competitors’ prices into account. We suggest annual competitor fee reviews to see how your veterinary hospital’s prices compare to your local competition.
Keep a close eye on inventory. Make sure you have an accurate and efficient way to manage your inventory, as lost inventory is lost money. Product loss causes a significant amount of margin erosion for veterinary hospitals, according to iVET360. You can incentivize accurate and efficient inventory management by implementing bonus structures for your inventory manager. For example, you could pay a quarterly bonus of $1,000 for every one percent saved over the previous quarter’s margin. According to Oliver Roller, managing director of analytics at iVET360, this incentive can save you significant amounts of money.
With iVET360’s Base+ Service Level, you’ll have access to an experienced iVET360 analytics manager who will help you identify growth opportunities in each of these areas on a regular basis.
“These are basically low-hanging fruit,” says Roller. “Making changes in these areas isn’t necessarily quick, but in analyzing these areas, you can often find a lot of room for growth.”
iVET360 provides comprehensive marketing, staff development and data analytics solutions for independently owned, primary care veterinary hospitals across the nation. For more information about iVET360’s services or to register for their free monthly webinar, please visit their website at iVET360.com.
Established in 2013 and headquartered in Portland, Oregon, iVET360 is a practice management services company that provides critical support to veterinary hospitals across the nation. Their specialists educate and assist veterinary practices with marketing, staff development and analytics to ensure complete implementation of proven business strategies into the daily activities of the hospital.
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Also published on Medium.