The cheek of some people!

Re: The cheek of some people!

Braden Collins — Sat, 12 Jan 2013 03:32:30 GMT

We've been in business now for 12 months (purchased an established clinic) and have deliberately priced ourselves as just above everyone else in town. There is already a couple of clinics locally that are competing on price, so we have decided to compete on value instead. With a couple of cheaper practices nearby, people who can't afford our prices are catered for. I've heard that 30-40% of people will only care about price, so we have not foucsed on these clients. We focus on the clients who want value for money, so we give as much value as possible to the client with every interaction. We do 20-30 minute consults, charge well for it but we feel the clients get a lot out of us taking our time and explaining things thoroughly. So far this approach seems to be working with us just taking on another vet, turnover has increased by about 22% since we took over and we are gaining around 100 new clients per month, mostly through word of mouth.

We can afford to pay our staff a bit above par by doing this while staffing at levels which prevent our staff from burning out, which has given us a really friendly and happy work environment.

We would charge a pretty similar amount for a bilateral entropion as atated in the artice, as we've chosen our particular business model with respect to prices and it's working well for us. I accept that it doesn't suit every clinic or every client, but that's all part of being in a business where competition exists. The clients will chose what they value and vote with their business either way.

Re: The cheek of some people!

Jaimin — Thu, 10 Jan 2013 07:55:39 GMT

[quote user="Martin Atkinson"]

[quote user="Claire McConnell"]I feel that is very harsh indeed. You do not know anything about the area or practice I work in. For one I don't think we would do hardly any ops at all if our prices weren't as they are.[/quote] I accept that your overheads may be a lot less than mine and you are working in a less affluent area than I do but at some point this still comes down to personal worth and client expectation. If you do something cheaply it is perceived of little value. Like Gerry, I haven't gone to university for 5 years, done countless hours of CPD and developed the skill to be a fast and technically adept surgeon to give that away for peanuts. I stand by the assertion that my time is worth more than that even if it costs me little in actual outlay. Clients are not daft and they will soon take advantage of those vets doing it on the cheap, all it does is erode the already tight profit margins and devalues the worth of our profession for all of us. Some may consider that arrogant and that is their privilege but I would rather retire than work for less than I think I'm worth. That is not to say I don't do charity work, or do special deals for loyal clients who are genuinely hard-up - I most certainly do and frequently, I just won't have truck with those who know the cost of everything and the value of nothing.

[/quote]

Too true.

If charging was based on current outlay then how cheap would solicitor and management consultant fees be?

Re: The cheek of some people!

Claire McConnell — Wed, 09 Jan 2013 19:39:16 GMT

[quote user="Mark Holmes"][quote user="Martin Atkinson"]

[/quote] Surely what counts is what you actually take home not what you charge. I have worked in pricier places which have a charge high policy, they charge a good rate for what they do but spend half the week standing around waiting for work - that's costly. If you can take home more charging less and being busier don't you cut off your own nose being principled about charges? Clearly we want to avoid a race to the bottom but their is more to a being profitable than just charging lots.

[/quote]

I agree with this post, and again depends on the area you work in. At my practice (certainly at one of the branches anyway - inner city, lots of pets, lots of unemployment, lots of benefits etc) we would probably not do any surgery at all, if our pricing wasn't as it was. We would have to pts every sick surgical case which would certainly not be an enjoyable days work, would get little surgical experience (as a 3yr qualified still very impt to my job) and would not make much money.

I also feel that my boss gives an average wage for level of experience, certainly not below par and so can not be struggling that much for profit. We all work very hard and are generally on the fully booked out for surgical cases most days.

I wold also like to add that the practice has been established for 20+ years, it isn't a newer "lets be competitive to steal everyone elses client's type practice"

Re: The cheek of some people!

Claire McConnell — Wed, 09 Jan 2013 19:32:48 GMT

[quote user="Gillian Mostyn"]I just think that deciding a vet is overcharging for something [/quote]

I agree with your post although I don't think Michael, myself or anyone else said that £500 was overcharging, simply that it doesn't always cost that much, dependent on practice and area etc

Re: The cheek of some people!

Martin Atkinson — Wed, 09 Jan 2013 19:14:21 GMT

[quote user="Michael Woodhouse"]I will say that there is only so much 'cream' for practices like Wynne and Martin's.[/quote] I don't know that I skim the cream, OK I live in a relatively affluent area with little unemployment apart from the spongers who don't want to work (and there a lot of those), but I find the wealthiest clients are often the tightest and will seek out the cheap practices as much as those with little money. The other private practices locally charge similar prices to me, its just the corporate loss leaders and cheap start-up practices that are under-cutting My clients come to me because they think I'm worth what I charge, if you are the cheap practice you will be very busy with low value and high maintenance clients, you will have to see 3 times as many to make the same profit and will end up with less time to work up each case properly. As said I'm not in this to rip people off and I will make allowances for the genuinely hard-up salt of the earth types.

Re: The cheek of some people!

Michael Woodhouse — Wed, 09 Jan 2013 17:18:44 GMT

[quote user="J G Wray"]Don't get locked into a pricing model which serves you for the first few years, because it will become a millstone.[/quote]

I take your advice on board.

I will say that there is only so much 'cream' for practices like Wynne and Martin's. Here they either come to me or drive a very long way. It does make me feel a responsibility for not pricing myself out of the market I am in.

Re: The cheek of some people!

J G Wray — Wed, 09 Jan 2013 16:42:21 GMT

[quote user="Michael Woodhouse"]I am working hard to grow the business and it is working, but getting caught up in how much money the hibiscrub dispenser in theatre is 'making me' doesn't get me anywhere. There's cash in the bank, there's money in the savings for tax and VAT. I'm earning twice what I was as an assistant and the business is growing turnover and profit. Despite crappy milk prices and finishing prices.[/quote]

This is fantastic. But, if you do all this and put in place solid, rigorous and truthful financial discipline and process as well you will achieve more now and be better prepared when, not if, something nasty or unexpected, like poor health, a bad back perhaps, forces change on how you work. Your achievements so far are tremendous, but not by any means unprecedented or unique in Our World. Look to others to see what happens when past the first flush. Don't get locked into a pricing model which serves you for the first few years, because it will become a millstone.

JGW

Re: The cheek of some people!

Michael Woodhouse — Wed, 09 Jan 2013 15:55:53 GMT

[quote user="Hannah Wynne Richards"]Micheal DEAD simple calculation Work out total cost of having building there-mortgage/business rates/property insurence/maintainence/heating/lighting Divide by % of floor area occupied by theatre/recovery kennels You will probably find that after taking drug/staff costs out you're losing money on your surgical cases [/quote]

Theatre is about 10% of floor area and kennels 5%. So working out total costs and dividing by small animal GA's over 12 months gives me £16.14 fixed cost per small animal general anaesthetic (excluding staff costs).

That is of course a load of rubbish. The waiting room is quite large and that earns me nothing (bar maybe £100 in sundries per year), although people stand there for things to be dispensed.

The premises is required to generate large animal income, the kit and some facilities cross over.

Yes to an extent drug income does support the fee income. The farmers have the option of high fees and cheap drugs or the staus quo. Funny how they have all decided to stick paying more for drugs. They know we have to get it out of them one way or another. I don't feel dirty making money selling drugs - if prescribing rules change then we will evolve with them.

[quote user="J G Wray"]Do you really not departmentalise your practice and have different management accounts LA/SA?[/quote]

No - one set of accounts. There is too much cross over. We can break down drug and fees by department, but we are only a small 2 vet practice.

[quote user="J G Wray"]How can you work out where your lifeblood, your cash flow comes from or set budgets?[/quote]

I leave budgets to the accountant. You are just making up what you would like to happen. If milk prices drop they call the vet less. There is not a lot I can do to mitigate that. They don't have the money in their pockets to spend. You can only squeeze them so much. Farm practice is far more commodity driven than small animals. The average pet owners spending power doesn't vary up and down so much (1 pence per litre on a herd selling a million litres is £10,000 per year - maybe the equivalent of their total vet spend).

I am working hard to grow the business and it is working, but getting caught up in how much money the hibiscrub dispenser in theatre is 'making me' doesn't get me anywhere. There's cash in the bank, there's money in the savings for tax and VAT. I'm earning twice what I was as an assistant and the business is growing turnover and profit. Despite crappy milk prices and finishing prices.

Re: The cheek of some people!

Hannah Wynne Richards — Wed, 09 Jan 2013 15:11:00 GMT

Micheal DEAD simple calculation Work out total cost of having building there-mortgage/business rates/property insurence/maintainence/heating/lighting Divide by % of floor area occupied by theatre/recovery kennels You will probably find that after taking drug/staff costs out you're losing money on your surgical cases

Wynne

Re: The cheek of some people!

Hannah Wynne Richards — Wed, 09 Jan 2013 15:06:35 GMT

My guess is that Micheal's professional fees are very heavily cross subsidised by drug sales-and if veterinary surgeons in future are only allowed to prescribe but not supply anti-microbials (which is perfectly possible) then his professional fees will have to rise dramatically

Wynne

Re: The cheek of some people!

J G Wray — Wed, 09 Jan 2013 14:51:47 GMT

[quote user="Michael Woodhouse"]It is pretty impossible to calculate the fixed costs of having theatre sat there, especially allowing for the fact that our practice is mainly large animal and only ~25% comes from pets.[/quote]

Eh? Do you really not departmentalise your practice and have different management accounts LA/SA? How can you work out where your lifeblood, your cash flow comes from or set budgets?

JGW

Re: The cheek of some people!

Hannah Wynne Richards — Wed, 09 Jan 2013 10:16:35 GMT

Total agreement with Martin I tried the cheap approach when I bought the practice-was so busy I had to hire another veterinary surgeon -tried 3 and although at that time the practice was cheap-all 3 tried to make it even cheaper by actively looking for ways to undercharge further I was rushed and stressed -decided I was better off getting rid of the assistant and some support staff and raising fees sufficiently to shed enough clients to be able to cope alone I'm both wealthier and happier

Wynne

Re: The cheek of some people!

Martin Atkinson — Wed, 09 Jan 2013 09:51:51 GMT

[quote user="Mark Holmes"]Surely what counts is what you actually take home not what you charge. I have worked in pricier places which have a charge high policy, they charge a good rate for what they do but spend half the week standing around waiting for work - that's costly. If you can take home more charging less and being busier don't you cut off your own nose being principled about charges? Clearly we want to avoid a race to the bottom but their is more to a being profitable than just charging lots. Equally I have work in places who are cheap and are strangled by cost control.[/quote]Horses for courses. There are those who thrive on stacking high and selling cheap - I was like that when I first set up my own practice but quickly came to realise that I was far less stressed and I could do a far better job by charging more (what I consider a fair and realistic amount) and being quieter. This philosophy is being somewhat undermined as I enter the twilight years of my career by corporates with their special deals and cheap start-up practices which seem to proliferate. Those who charge lower prices be honest with yourselves: are you doing this to make veterinary treatment more affordable or just to get clients through the door. I became a vet to treat animals to the best of my ability and if I was fortunate make a decent standard of living on the way. I admit I'm quieter than ever but I enjoy my job, have a valuable property and still make a decent profit. As said I will retire before I start under-selling my skills. I'm fortunate to be able to make that decision, I feel sorry for those entering the profession now, after years of dragging ourselves out of being a Cinderella profession some sectors seem hell bent on destroying the modestly decent life and enviable reputation we have fought to gain for ourselves by the obsession of getting bums on seats and selfish pursuit of personal gain at the expense of our colleagues. Maybe I'm old fashioned or just naive but fortunately I won't have to worry about it much longer.

Re: The cheek of some people!

Michael Woodhouse — Wed, 09 Jan 2013 09:48:08 GMT

[quote user="J G Wray"]And the rest, including idle time, so called "true costs" - what of them?[/quote]

It is pretty impossible to calculate the fixed costs of having theatre sat there, especially allowing for the fact that our practice is mainly large animal and only ~25% comes from pets. SPVS produced a booklet a few years ago suggesting basing it on floor area and how much use it gets etc. I tried that but our workload is so variable that I never got a similar number twice.

My overheads will be very much less than most practices because the premises is small and we have low staffing levels.

What I do know [and I said above] - if we made things so much more expensive then we would do less operations so the fixed costs per surgery will rise.

Finished my first year of trading and have made a healthy profit (allowing for a theoretical salary), despite reinvesting about £40,000 back into the practice. I have a new bank of small animal kennels ordered to come later in the month because sometimes we are currently full to capacity.I must be doing something right, somewhere.

You go back an read anything I have said in this thread, I never accused anyone of overcharging. Just pointed out that I thought £500 was a LOT of money for such an operation and we would be significantly cheaper. That's not to say that both practices might not clear the same margin on the op, because I have lower running costs.

Re: The cheek of some people!

J G Wray — Wed, 09 Jan 2013 07:30:36 GMT

[quote user="Michael Woodhouse"]I mentioned the costs directly attributable to that procedure only.[/quote]

And the rest, including idle time, so called "true costs" - what of them?

JGW

Re: The cheek of some people!

Mark Holmes — Wed, 09 Jan 2013 00:23:49 GMT

[quote user="Martin Atkinson"]

Re: The cheek of some people!

Mark Holmes — Wed, 09 Jan 2013 00:23:32 GMT

[quote user="Martin Atkinson"]

Re: The cheek of some people!

Rob Loxley — Tue, 08 Jan 2013 22:39:36 GMT

[quote user="Gillian Mostyn"]Or the paper has exaggerated things[/quote]

surely such a thing would never happen?!

Re: The cheek of some people!

Gillian Mostyn — Tue, 08 Jan 2013 22:31:44 GMT

Don't forget 'the vet said it would go blind within a few weeks if not treated'. Can't be that mild then. Or the paper has exaggerated things -in which case we may not be able to believe the quote either?

I just think that deciding a vet is overcharging for something on the basis of a newspaper article is a bit silly......you haven't even seen the dog (and no, I don't count a photo as an exam!) Also, that there is no such thing as 'an entropion op' - the degree of surgery required can vary tremendously. The last one I did needed an upper eyelid wedge resection too......which I couldn't determine until under anaesthesia and the blepharospasm was gone....

Re: The cheek of some people!

Michael Woodhouse — Tue, 08 Jan 2013 21:33:37 GMT

Did anyone look at the picture in the article linked in the first post? It's clearly not on the same level as your Sharpei!

Re: The cheek of some people!

Gillian Mostyn — Tue, 08 Jan 2013 21:24:56 GMT

Michael - I agree that £200 to fix an entropion in a puppy with little chronic change may be reasonable. But this is an adult dog with goodness knows how many issues going on. I had a sharpei that a colleague booked in for 'entropion op' (to be fair to them, they only had chance to examine it from the other side of the room-typical sharpei) which, under anaesthesia, had dreadful eyes - bottom and top lids affected, severe facial mask issues etc etc. So bad that I wouldn't even attempt it and said it needed referral, which was refused on financial grounds, although this was a breeder's stud dog . We never saw it again so....???

It is not reasonable that this estimate is based on the worst case scenario - no? Maybe they would charge less if it turned out to be the simple op you describe? The one thing you never do with clients like this is underestimate.....

Re: The cheek of some people!

Michael Woodhouse — Tue, 08 Jan 2013 15:26:59 GMT

[quote user="J G Wray"]If you do, then where's the logic in pricing like this - I see no fixed (establishment) costs, for instance?[/quote]

Yes, but they decrease the more surgery you do! So if operations are affordable I do more of them so I can charge the same and make more money.

I mentioned the costs directly attributable to that procedure only.

Re: The cheek of some people!

Martin Atkinson — Tue, 08 Jan 2013 13:05:49 GMT

Re: The cheek of some people!

Kate Richardson — Tue, 08 Jan 2013 12:31:05 GMT

[quote user="Richard Larkin"]

Kate,

Could you clarify what you mean by 'really strong shock tactics', what 'home truths' you have in mind and also what you would envisage the 'much more hard line approach from charities' to be. In a previous post you mention n a different thread you also suggest that charities should be more involved in client education.

I work in a charity hospital, the charity does have an educational policy with people going into schools mainly in an inner city enviroment, a sort of grass roots approach if you like. However a large percentage of our clients which include many second / third or even fourth generation people on benefits, there exists such a culture of reliance on the state that there is a full expectation that veterinary services are included on this, and that owning a pet is essentially a right, (which I do my very best to correct with home truths and sometimes shock tactics!), which in ingrained to a massive extent.

How can one be considered responsible for an animal if that person often holds entirely no responsibility for the management of their own life? home truths and shock tactics are as likely in cases to alienate these people away from vets, as much as educating them.

[/quote]

Hi Richard, sorry for the delay in replying to your post; I have been giving this a lot of thought and didn't want to rush a reply.

Time after time we hear the same recurring theme from vets from all different areas/client bases- people without the financial capability to take care of their pets needs and a lack of awareness or denial of their responsibilities as the animal's owner. Now this may be for very different reasons in each case, but in a lot it seems that it is due to poor planning/lack of knowledge and in particular inappropriate choices of pets or multiple pets to name but a few. It is also a cultural thing- people want something, they want it now, and can often get what they want immediately with no thought as to the long term consequences, whether it be buying a bigger television on credit or a dog which they can afford to buy now (how they can manage this on benefits I am not sure, but that's part of the concundrum). It also seems to me that we moan and moan, but nothing ever changes or appears to be done to try to address the problem, at least not that I am aware of.

I would like to make it clear that I do not think that absolutely no-one should have a pet unless they can potentially afford it; I appreciate that people fall on hard times, situations change, and there are huge social benefits from having a pet for example in the elderly, or chronically or mentally ill. So financial assistance in these cases is appropriate. What I really struggle with is people like a client last week who brought her new puppy in that she got from a breeder (so I assume money exchanged hands) whose first question on entering the consult room was 'Do I have to pay for the puppy's vaccine today as I don't get my benefits payment until next week'. Fantastic that she was aware that vaccination is important, but why are people prepared and able to pay a 'breeder' but feel that a professional doesn't require the same respect? Or the people who have been unable to pay for their last 40kg dog's treatment and have gone straight out and obtained another large dog to replace it almost immediately or take on another pet having already admitted they struggle to pay for the ones they have. In other words people who make inappropriate choices.

I am over simplifying here, but a lot of these problems are preventable. So why aren't we working at preventing them? Or are we and if so how and where is this going on, beacuse I don't see it. Can we prevent them? Is there a solution? I don't have all the answers, but I just feel that we need to try to come up with some possible solutions and take action instead of continuing to moan. The reason I often target the charities is that in my opinion, they hold a position where they could influence change- they have a public voice and respect and if they were to work together (maybe they already are and I just don't know about it), then they could have an even bigger voice. I have said this before and I will say it again- the RSPCA does not appear to me (and I may be wrong, but this is how it appears to me) to undertake wide spread preventative work- they prosecute- does this really work as a preventative measure? Are the punishments harsh enough to act as a deterrent? I am not sure. I also don't think that in most cases that animal suffering is caused by malicious cruelty- yes it needs to be dealt with harshly, but in most cases, suffering is caused by ignorance, neglect and lack of finance. Which goes back to education and learning by experience. We see advertisements asking for donations, so why can't we see adverts or short broadcasts promoting an a change in attitude to make people aware of their responsibilities as a pet owner and encourage them to make better choices, and face them with the harsh reality that bad choices may lead to the loss of their pet. We need to look at breeding controls- currently there doesn't appear to be any, so its a quick buck to be made in the eyes of many, again abdicating their responsibility when things go wrong. More stories of worse case scenarios should be out there. Across the board maybe we need to be tougher on ignorance as the more we continue to allow this culture of expectation of costs being met then things will never change. I am afraid people will only learn the hard way in a lot of cases and people will always behave in a way they are allowed to behave. This applies to pet owners across the board- the main message I would like to see out there is that owning a pet as you quite rightly say is a choice, a privilige, and not a right and with that choice comes responsibility.

A different angle- is it due to our profession not promoting ourselves properly, or commanding respect? Are we too apathetic or too self centred? Should we stand up with a bigger voice as a profession and become more involved with prevention and national education? Should the spokes people for our profession be more vociferous in educating people on their responsibilities?

Lots of questions, but what are the possible solutions, and I fully expect some of what I have said to be criticised, but I am fed up with hearing 'there's no point trying' when I haven't actually seen much evidence of anybody trying to change things.

The PDSA PAW report makes good reading; I would be really interested in knowing where it will go from there and what action is planned as a result.

Re: The cheek of some people!

J G Wray — Tue, 08 Jan 2013 11:36:26 GMT

[quote user="Michael Woodhouse"]Yes I do. Own the practice outright with my wife who is also a VS[/quote]

If you do, then where's the logic in pricing like this - I see no fixed (establishment) costs, for instance?

JGW