How many vets go bust

Re: How many vets go bust

Anthony Todd — Fri, 14 Jun 2013 14:23:21 GMT

If I was you all I'd take advice from Julie Innes......

Re: How many vets go bust

Bob Russell — Fri, 14 Jun 2013 10:15:13 GMT

[quote user="Gillian Mostyn"]

no...but maybe you lose a little bit of confidence in their ability to advise?

[/quote]

Our bank manager is very pleasant but sadly is completely clueless about even business basics. I am not sure what has been happening in the banking world but previous managers have been able to scan a spreadsheet or set of accounts and come up with plenty of ideas within seconds.

Managers are often a lot less experienced than they were in the past! It also can mean they will not lend when a perfectly sound proposal is placed in front of them.

Re: How many vets go bust

Richard Carter — Fri, 14 Jun 2013 09:52:48 GMT

agree with the comment about bankers - when I started up I was given a 'personal' service - which meant that I was being sold the in-house H&S package at 'only £150/month', advised to take a loan to buy a vehicle at 'only 140/month' an insurance at 'only £x/month' all to someone who hadn't actually made a penny yet and didn't know what sort of spare cash would be available on top of a start up loan at 'only £500/month'. Fortunately I had better advice from friends.

Re: How many vets go bust

Anthony Todd — Fri, 14 Jun 2013 08:23:48 GMT

[quote user="Gillian Mostyn"]

no...but maybe you lose a little bit of confidence in their ability to advise?

[/quote]

I just wanted the wonga, and I did start spending less even if I wasn't overtrading..... don't think bankers have ever given "gold standard" [te he] financial advice.

Re: How many vets go bust

Gillian Mostyn — Thu, 13 Jun 2013 22:56:36 GMT

no...but maybe you lose a little bit of confidence in their ability to advise?

Re: How many vets go bust

Anthony Todd — Thu, 13 Jun 2013 22:50:24 GMT

[quote user="Gerry Henry"]just spending too much isn't overtrading[/quote]

When your bank manager and only source of funds tells you "you are overtrading" and you've come to him to borrow money you don't tell him that Gerry Henry says he doesn't know the meaning of the word.....

This wording is better, sorry.

Re: How many vets go bust

Anthony Todd — Thu, 13 Jun 2013 22:48:10 GMT

Deleted for poor grammar.

Re: How many vets go bust

Rob Loxley — Thu, 13 Jun 2013 13:50:04 GMT

[quote user="Julie Innes"]I do all the ordering. Again, it's a bit of a pain, but I found when other people were doing the ordering the drugs bills shot up!! I know what we need to have on the shelves, and I replace it as I use it, so I don't have lots of stock (money!) sat going out of date on the shelves, helps with cash flow. I also source various items from different places- it is amazing the price difference in some things eg syringes/ needles/ paper towel- it might not seem a lot, but it adds up![/quote]

Is the OP in a buying group - if not an excellent way to cut not just the drug bill but also the external lab bill, the crematorium bill etc.

Also as for consumables - yes the wholesaler list prices can be undercut by the cheapo suppliers, but our wholesaler is very much up dor negotiation on this and we've got them to do us the same syringes/needles at the price of the cheapo supplier - with next day free delivery.

Re: How many vets go bust

Gerry Henry — Thu, 13 Jun 2013 05:04:20 GMT

[quote user="Anthony Todd"]

[quote user="Gerry Henry"]Difficult to overtrade when running a cash business, which, by and large, we are; how did you set it right ?[/quote]

I had to stop spending so much.

Jeepers, if this isn't the obvious answer no wonder some vets get into financial difficulties.....

I went to the bank manage to borrow yet more money when I was spending far too much, something many governments seem to do but the electorates don't seem to grasp either.

I wonder if AN ON doesn't yet grasp this fundamental either....

[/quote]

I don't mean to be a pedant but ... just spending too much isn't overtrading, its just spending too much; overtrading is where you pour working capital into producing more product thereby reducing your liquidity; the sales ledger looks great but you can't pay the wages; I can't really envisage a situation where a service company can overtrade, perhaps your bank manager didn't get it either.

Re: How many vets go bust

Julie Innes — Thu, 13 Jun 2013 00:13:49 GMT

Thanks, guys . I have no business training whatsoever, so common sense is all I have to rely on, I'm afraid!

I've always been very cautious when it comes to the business. I don't even have a business loan- I funded it by remortgaging our house, based on the fact that we had a better deal on our mortgage that the banks were offering on loans, and the banks wanted my house as collateral anyway. I am lucky that my husband works and we can pay back the increase in the mortgage payments without me having to take too much extra out of the business. We saved a lot by finding a great location, but which needed a lot of work (so low rent), and then we did all the work ourselves. As well as saving a firtune on labour, I have a great sense of pride in those walls I painted and floors I laid- lots of friends and family helped too, and most of clients actually seem to love the fact that we did it all ourselves- it means they see us a genuine small, family concern, rather than feeling they are paying the price for posher premises (not that we aren't very posh, of course...). I still have the story of the refurb on our website, as people seem to like it, and often comment on it.

I think stock control is a big part- I'm betting if Anon did a stock take he or she might see where all that cash is sitting- in cupboards, on the shelves. Nurses and other staff can be very overzealous about spending your money! I'm a hard task-master when it comes to stock control, I'm afraid. I don't sell a lot of food/ toys etc, because I set out to open a vet's surgery, not a shop, and I'm not interested in competing with the big pet chains.

By necessity/ for financial reasons some items of equipment are still being paid up, but I didn't get them all at once, and made sure I could afford the repayments. There were a lot of costs I naively hadn't figured into my original business plan- eg I thought paying business rates meant I would get my bins emptied/ water supplied- doh! I've made a fair few mistakes along the way, but hopefully I am still learning!

Re: How many vets go bust

Michael Woodhouse — Wed, 12 Jun 2013 23:53:29 GMT

[quote user="Anthony Todd"]Wow, Julie [and I never personalise posters] what a recipe for a successful business and it's all just common sense!![/quote]

It is though. Take in more money than you are spending and you have a profit.Make more profit by either taking more money in or spending less to deliver the service.

Am I missing something fundamental?

We deliberately don't have an overdraft. Business credit card set up to automatically pay itself off each month. Separate business savings account for a monthly payment to go over for tax and VAT. If I want new equipment than I buy it once I have the money in the bank. Less tax efficient, but not another monthly payment to concern myself about if things went quiet. I do have a business loan over 10 years, but my goal is to get it paid off in 6.

Re: How many vets go bust

Anthony Todd — Wed, 12 Jun 2013 23:39:54 GMT

[quote user="Julie Innes"]God knows, I am no expert, but I have been in practice for 2 years [/quote]

Wow, Julie [and I never personalise posters] what a recipe for a successful business and it's all just common sense!!

Re: How many vets go bust

Anthony Todd — Wed, 12 Jun 2013 23:35:13 GMT

[quote user="Gerry Henry"]Difficult to overtrade when running a cash business, which, by and large, we are; how did you set it right ?[/quote]

I had to stop spending so much.

Jeepers, if this isn't the obvious answer no wonder some vets get into financial difficulties.....

I went to the bank manage to borrow yet more money when I was spending far too much, something many governments seem to do but the electorates don't seem to grasp either.

I wonder if AN ON doesn't yet grasp this fundamental either....

Re: How many vets go bust

Julie Innes — Wed, 12 Jun 2013 22:17:59 GMT

God knows, I am no expert, but I have been in practice for 2 years now and am managing to stay afloat (yay!) and in the black so far, despite my turnover/ client base being far smaller

Prices- I know now that mine are a bit too cheap. I didn't think I was cheaper than other people, but it seems I am. I am trying to increase my prices gradually, but meantime I am focussing on outgoings, as I'm pretty busy, and my clients seem happy enough

Staff: I have minimal staff- just me and 1 RVN. I also have student nurses who come free of charge, but for whom I have to do training/ paperwork etc, but it suits me just now, and means I am building a network of nurses I know I can work with in the future, when I can afford to take on more staff. When I need to, I have a few casual workers who come in and answer phones, just for the hours I need. Again, I may take someone on permenantly in the future as we get busier. I have a lovely locum vet who does a couple of hours/ half days etc as and when I need her to, and it allows me flexability- if we are quiet, I don't need her, so don't have to pay. If we are busy, she more than covers her wages, consulting while I operate (she charges better than me too )

I do pretty much all my own admin, which is a pain, but does let me keep a very close finger on the pulse of my business. I do have a book-keeper, who does wages/ VAT etc. He charges less than an accountant, and he is pretty good at letting me know ways of saving money.

I do all the ordering. Again, it's a bit of a pain, but I found when other people were doing the ordering the drugs bills shot up!! I know what we need to have on the shelves, and I replace it as I use it, so I don't have lots of stock (money!) sat going out of date on the shelves, helps with cash flow. I also source various items from different places- it is amazing the price difference in some things eg syringes/ needles/ paper towel- it might not seem a lot, but it adds up!

Look at your bank account- I recently looked into changing mine as I get a minimal service, and have problems getting change. The bigger banks were delighted to offer me "support" (which I don't need- I just want coins!!), but the charges were eye-watering. Instead, I've put the word out among the taxi drivers among my clientele that I will happily turn coins into notes for them, any time they want to drop in- reckon this has saved me about £200/ mth! Look at all your service providers- are you getting the best deals?

I am quite strict on credit- very few people get any! I've learned the hard way that the people who "promise" they will be in the next day to pay are rarely seen again. I politely ask them if they don't have someone they can borrow the money from, rather than borrowing it from me. I'm not afraid to make it plain to my clients that we are a small, one-woman business, and I can't afford to lend people money, which is what it amounts to- that £30 unpaid bill is a pair of school shoes for one of my kids!

I'm not seeing huge profits, because I take the minimum amount I need to from the business and am trying to build a decent slush fund, so that those VAT bills (which I mentally put aside, and am looking at actually opening another account to put them aside into!) don't floor me.

I hope you get back on top, as it sounds like you have a healthy client base, and a turnover I am jealous of! Good luck!

Re: How many vets go bust

Gerry Henry — Wed, 12 Jun 2013 21:25:13 GMT

[quote user="Anthony Todd"]

[quote user="Gerry Henry"]Turnover 500k, clients 4500 and yet the business is sinking, there's something really wrong here[/quote]

Similar position to me some time ago. My bank manager called it, euphemistically, "over-trading" and it'll be so bleeding obvious when someone detached looks at the books.

Recognised advisers have percentage ratios of the main expenses to turnover, or should have,so the anomalies will stare you in the face.

Most vets do as well.

You can't just sack an employee 'cos "you're not making money"!

Redundant, with good logical reasons and procedure, sure, but the days of just "letting someone go" are long gone, and if the employee is the reason for your predicament he/she will be very aware of his or her rights, they always are, as I have discovered, even with a thieving employee.....

Let 'em go and you'll get a claim for unfair dismissal; the penalties are extreme and you'll lose.

You'll be walking from the tribunal not driving in your Porsche.....

[/quote]

Difficult to overtrade when running a cash business, which, by and large, we are; how did you set it right ?

Re: How many vets go bust

Martin Atkinson — Wed, 12 Jun 2013 17:41:46 GMT

[quote user="Mark Holmes"]Most practices set fees on be back of an envelope anyway, what do you reckon £35?" that is the usual method of pricing[/quote] Most established practices have a historic pricing structure that may have been once plucked from the air but has evolved and is pretty accurate because they have evidence based on their accounts. It is then very easy to adjust according to inflation and other costs that may need addressing and is of course tailored to meeting local competition. A newly established practice doesn't have this luxury but will have a very good idea what local practices charge and as most will have broadly similar overheads in the same area this can act as a very good starting point. You can of course then decrease fees to gain more clients and reduce your profit margin or increase to gain more profit from less work. What we haven't heard from the OP is what his pricing protocol is, indeed we've heard very little even if all the anon posts are the same person and have largely been left to argue this out amongst ourselves. I feel it is time the OP laid all his/her cards on the table.

Re: How many vets go bust

Mark Holmes — Wed, 12 Jun 2013 17:26:06 GMT

[quote user="An On MRCVS"]What if that staff member is overwriting the costs on the PMS and putting in their own?

[/quote] Ok - I genuinely believe that every member of staff should have a role in developing an area of the business in addition to their clinical role. We spend all day working for and "on behalf of the client". That's to say that whilst we are employed by, and paid by the practice our a activities are directed towards the client and it is easy to see how staff can experience mixed loyalties - hence undercharging. Activities directed towards promoting, developing and growing the practice provide some balance to this, improve engagement in the practice at a level deeper than it simply being a job and I suspect helps reduce staff turnover. Rather than chewing the nuts off an undercharger, say you have noticed it happening. Ask if he feels that the practice overcharges and propose he comes up with better solution. Give him a month. Most practices set fees on be back of an envelope anyway, he/she may come up with a better more evidence based system which more accurately reflects the costs involved. They need to do it properly though - look at the various pricing strategies available. Consider how they might be applied. Give some thought to covering the high fixed and semi variable costs of veterinary practice, plus covering costs of further investment. - all a much more logical system of fee generation than the typical "what do you reckon £35?" that is the usual method of pricing. On e they are familiar with the outgoings and how they must be recouped they will be less inclined to think about under charging.

Re: How many vets go bust

Hannah Wynne Richards — Wed, 12 Jun 2013 17:23:00 GMT

Mark Sometimes the information has not been given. More often,the undercharging is deliberate. No practice can under any circumstances tolerate this. An Ons latest post (if the same AnON) makes it sound as though he/she has a real problem

Wynne

Re: How many vets go bust

Martin Atkinson — Wed, 12 Jun 2013 16:47:11 GMT

[quote user="Michael Woodhouse"]The practices I have worked in the bosses are far more generous than the assistants![/quote] In my very first job 2 days out of college as a sole charge locum, when the owner returned from his holiday (and this shows how long ago it was!) he said I've never seen so many entries in the book over £1 (yes that is one - no naughts missing) you've taken more in a week than I normally take in two, This was by the simple expedient of following the price book. As I was then moving to the large animal side of the practice for the next couple of weeks I suggested they might like to increase my wages from £50 a week to £75 in that case. Those were the days.

Re: How many vets go bust

Bob Russell — Wed, 12 Jun 2013 16:13:21 GMT

[quote user="An On MRCVS"]What if that staff member is overwriting the costs on the PMS and putting in their own?

[/quote]

If they do not gain from it not theft but disciplinary matter that could lead to dismissal. Check with your PMS to see if the authority to do this can be removed from individual accounts. Remove 'free' consultations from the available list.

Failure to book work done is no different to someone in Tesco's not bothering to scan items because they decide they should.

I doubt there would be grounds for unfair dismissal if this is documented. Nobody here would dream of doing that (except me!) - they know that sales drive profit and profit drives bonuses and pay rises. If I forget to charge the receptionist is banging on my consulting room door to find out why not - and I am the boss!

Thank goodness for great staff!!!

Re: How many vets go bust

An On MRCVS — Wed, 12 Jun 2013 15:50:29 GMT

What if that staff member is overwriting the costs on the PMS and putting in their own?

Re: How many vets go bust

Mark Holmes — Wed, 12 Jun 2013 15:37:02 GMT

[quote user="Hannah Wynne Richards"]

The difference is that the pactice owner has a legal right to give discounts if he/she chooses-it's called charity or generosity. Employees have no legal or moral right tobe generous with someone else's money. That's called theft

Wynne

[/quote] If you have staff undercharging you have not given them the information necessary for them to charge correctly.

Re: How many vets go bust

Hannah Wynne Richards — Wed, 12 Jun 2013 14:57:32 GMT

Wynne

Re: How many vets go bust

Thomas Johnson — Wed, 12 Jun 2013 14:40:44 GMT

[quote user="Michael Woodhouse"]

[quote user="Hannah Wynne Richards"]My sad experience of assistants is that their discretion inevitably favours the client "Mistakes" always result in under charging, whilst, if genuinely due to mathematically incompetance, should favour the practice 50% of the time (still unacceptable)[/quote]

The practices I have worked in the bosses are far more generous than the assistants!

[/quote]

I agree, in one of my previous jobs I often felt unable to charge correctly as the animal had previously seen one of the partners who regularly under charged.

Re: How many vets go bust

Michael Woodhouse — Wed, 12 Jun 2013 13:18:12 GMT

The practices I have worked in the bosses are far more generous than the assistants!