The state of your practice is in jeopardy
There is little doubt that we, as a profession, are suffering the multiple effects of not-enough-self-interest. By nature, very few veterinarians are really sharp businesspersons. Male or female, young or old, we make more decisions with the heart than with the head.
My mother-in-law once told her friends that her daughter was engaged to a veterinarian. "They make a lot of money," she said. She was right. But as much money that came in the door seemed to go right out again.
I made the most common mistake around: I started a practice on the outskirts of a town without doing any research into the location's potential. The costs of that error were huge. And it was a self-inflicted wound.Location, location, location
The large retirement community surrounding my practice voted for a new pet policy in the 1980s: "No more pets. After your pet dies, no replacements." Yes, a few residents cheated — with older dogs that looked identical to their deceased pooches. But pet owners dwindled. Many clients came from 30 miles away, but you can't make a living from long-distance travelers. Many were from exclusive Palm Beach, sending secretaries, houseboys or chauffeurs with the pets and expecting to be billed. I soon learned that many of the wealthy stay wealthy by not paying their bills.
I considered relocation. But had I spent a fortune to build the practice only to abandon it? No thanks. Another self-inflicted wound.
So I used my plentiful spare time between clients and no-shows to start writing for this publication. That opportunity led to invitations to speak and consult with practices all over the United States and around the world. So, what have I learned?
The best medicine in the world can't make up for too-few-clients in a bad location. I was fortunate when fate intervened to offer me this productive side career. I eventually sold the property to a neighbor who needed to expand, hooking up to my septic tank but not the practice. He eventually sold my practice building to another veterinarian. That doctor soon moved out to a more populous area. He didn't do his homework either. See? These self-inflicted wounds are contagious.
I wrote this because I have had seven calls this week from desperate practice owners whose practices are failing, as both their gross and net drop — entrepreneur to "entremanure" too soon for too many. They're in trouble. They laid off their associates and trimmed their staff. They're on C.O.D. terms with distributors. Many own their buildings, but their partners at the bank are demanding more than the practice can now afford. In one sad case, a practitioner of 40 or so years has drained both his and his wife's 401(k)s in an ill-advised effort to sustain his now-defunct practice.
Don't make his mistake. If your net is declining, seek professional help. If your area growth turns out to be minus 5 percent over the next five years, it's not the recession that's killing you — it's the population shifts, mostly from northern states to the South and West. If your local mall is emptying out and vacant storefronts are popping up, think hard, very hard.
Experts say that 55 million people will have migrated to warmer climates by 2015. That's enough to support 5,650 veterinarians. Put it another way, more than 5,000 practices are going to find themselves on the endangered species list of businesses. The math is easy: Fifty-five million people translates to 22 million households, of which about 36 percent will access companion-animal services. Is the Department of Homeland Security prepared to hire more than 5,000 veterinarians to protect our shores from bioterrorism — and keep them in jobs?
You can see these losses and gains in state electoral votes. Depending on the state, one electoral vote equals about 200,000 to 500,000 potential pet owners or, in other words, 20 to 50 veterinarians.
The states losing the most are New York and Ohio, losing 100 veterinarians each. Other losers are California, Illinois, Iowa, Louisiana, Massachusetts, Michigan, Minnesota, Missouri, New Jersey and Pennsylvania — each losing 20 to 50 solo practices.
The biggest gainers are Texas, up 80 to 200 veterinarians; and Arizona, up 40 to 100 each. Other gainers are Georgia, Nevada, North Carolina, Oregon, South Carolina and Utah — also up 40 to 100 animal doctors apiece.
Should veterinarians in states with shrinking populations just pack it in? No. There are always pockets of demographic growth, even in states showing net losses. The trick is to locate them. The veterinarians worst affected will be those who want to retire and sell a practice in the declining states. It's rough out there and getting rougher Plan ahead. It's your life. You really don't need any more self-inflicted wounds.
Dr. Snyder, a well-known consultant, publishes Veterinary Productivity, a newsletter for practice productivity. He can be reached at 112 Harmon Cove Towers Secaucus, NJ 07094; (800) 292-7995; [email protected]