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Preparing for 2024: 8 Considerations for Vet Practice Owners

Preparing for 2024: 8 Considerations for Vet Practice Owners

As we bring 2023 to a close and look ahead to 2024, let’s take a moment to reflect on some of the challenges facing veterinary practice owners as well as the opportunities for improvement.

In hindsight, 2023 was the year of continued inflation, soaring interest rates, staffing shortages, and continued economic uncertainty. While 2023 was challenging, it was also very profitable for many of you.

First and foremost, take some time to step away from working “in the business” to working “on your business.” What goals would you like to accomplish in 2024? What adjustments do you need to make to your people, processes, and technology to accomplish them?

8 Considerations for Vet Practice Owners for 2024

Based on conversations with owners and in-depth practice evaluations over the past year, here are eight considerations for 2024.

1. Owner Compensation

As a percentage of hands-on production, there are opportunities for owners to increase their base salaries. The pros and cons need to be considered including “reasonable compensation,” available cash/profit, payroll tax expense, and the potential opportunity to contribute more to a company-sponsored retirement plan.

2. Rent

For those renting from a third party, when your lease is up, make sure the amount you pay is fair market value, especially in the current climate of decreasing commercial property values. If you own the real estate, make sure you have a lease with yourself that charges fair market value rent. Consider the amount as a percent of revenue, as a percent of the property value, and based on comparable cost per square foot in your area.

3. Reporting

Continue to strive for accurate and timely data to evaluate your practice. Are your reports formatted in a way that clearly show top-line revenue, overhead, associate compensation, and owner compensation? Is your chart of accounts efficient and reporting what you want to see so that you can benchmark yourself against other similar practices?

4. Fees

Are your fees in line with the value you are providing your patients? Make sure to consider the increases you are paying for staff, inventory, supplies, equipment, lab, etc. Many practices are still undercharging for their services. A fee increase may be necessary going into 2024.

5. Equipment

Consider timely equipment investments/upgrades that will allow you to leverage your staff, expand the procedures you offer, make your processes more efficient, and ultimately generate additional revenue. Take advantage of accelerated depreciation opportunities to reduce your tax liability.

6. Back Office

Look for efficiencies in your back office. Are there opportunities to align your practice management software, bookkeeping software, payroll, credit cards, etc., to make the monthly/annual process more efficient and effective? This can save you valuable time and allow you to make more agile business decisions.

7. Succession Planning

Make sure to have early and consistent discussions with your associate veterinarians about succession planning. It’s never too early to start the conversation once you identify the right candidate. Make sure associate compensation models and your benefits plan mirror the industry standard along with meeting their desired work/life balance.

8. Company Culture

Take a step back and consider your practice culture. These days staff and associates have their pick of where to be employed. Is your practice their first choice? Poll your key staff and ask them if there are ways to make your culture even better. Attracting and retaining staff and associates will continue to be a huge challenge moving forward.

SVA is here to listen, help you evaluate your practice, and put you on the path to accomplishing your goals. Reach out to us today to start the conversation.

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Biz Tip Topic Expert: Andy Slinger, CPA

Andy Slinger, CPA

Andy is a Principal with SVA Certified Public Accountants and focuses on the dental, veterinary and healthcare industries. He works with practices to manage their financial matters and set short and long-term goals.

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