Sell, Struggle, or Grow - How Will You Respond to the Opportunity of a Lifetime?

Sell, Struggle, or Grow - How Will You Respond to the Opportunity of a Lifetime?

By Dr. Michele Drake and Harley Orion

 

The pandemic, the shutdowns, and the subsequent pet ownership boom of 2020-21 have created an unprecedented environment for veterinarians. 

But you already knew that. 

"No new clients" photo
Image from a veterinary website. Many practices have adopted strategies like this in an effort to defend their schedules. We empathize with their challenges, but we hope to steer practice owners toward strategies that will lead toward long-term growth instead.

What fewer practice owners realize is that this represents a once-in-a-lifetime opportunity. Some practices are capitalizing on it to create a stronger business – one that will provide greater financial freedom for themselves and their families. Others are missing out – and making short-sighted decisions that will cost them for many years.

We’ve seen it from both sides, and we know the struggle is real. We communicate with thousands of practice owners around the country, and we understand the challenges practices are having with hiring, training, and retaining staff to service all the new demand. 

Some owners struggle along hoping things will “get better somehow.” 

Some owners are simply exhausted, and see the high offers being made for practices, and decide now is the time to sell. 

Yet some practices are rising to the occasion, finding solutions to today’s challenges, and in the process positioning themselves for massive growth and permanently greater practice valuation.

In short, practice owners need to make a decision: Sell, Struggle, or Grow.

We’re launching a short series where we’ll unpack what we hear from leading practices around the country who are responding to today’s challenges in unique ways – providing insights to help you make the best decisions. 

"The struggle for practice owners these past two years has been tremendous. We have a combination of factors with COVID and the labor shortage. I see so many practice owners struggling to meet the increased demands, and in particular struggling to do it in a way that feels good in their businesses.

We've all been asked to increase our service delivery by 10%, 20% or even more. Of course that is tough to do, but it's also an opportunity to grow your business. And when we grow our businesses, it's better for our families. It's better for our staff. It meets the needs of our community – all these new people have gotten pets and they want our help. And if we are truly good DVMs, then we want to take care of these pets. While I can empathize with practice teams who are trying to defend their work-life balance by reducing hours or closing on the weekends, that approach can lead to a mindset of "us against them" with regard to our clients. I don't think that's necessary or helpful. On the other hand, you can avoid staff burnout and keep things in balance by adding staff and working on your operational processes to improve efficiency, as well as investing time and energy in developing a strong practice culture. I'd like to share what I've been doing that has helped me grow my practice by 50% year over year without burning out my staff – and I want to provide some ideas practices can use to look at this situation differently and see the real opportunity." – Dr. Michele Drake

 

It’s Lonely at the Top

We often talk to practice owners who feel like they’re the only one going through these challenges. Of course this isn’t the case – this is a worldwide phenomenon – and we hope that learning from top-performing practices will help your business to thrive – now and in the future.

 

What Happened?

The pandemic drove several separate but related changes, which together comprise a “perfect storm” of new business for the veterinary profession:

  • Reports of the exact number vary WIDELY – but somewhere between 2 and 5 million new families adopted a pet – at least a 4%+ increase in a single year – faster growth than any other year on record
  • Just like first-time parents, many of these first-time pet owners are still figuring out how to care for their pet, and need more attention and have more questions
  • Families stuck at home spent more time bonding with their pets – leading to a stronger relationship with their pets as well as more likelihood of noticing medical issues
  • As people return to work, they’re now encountering new problems with separation anxiety and behavior issues that they’ve never had to handle before
  • Of course there are some areas that have changed more than others – but virtually every town and city has gone through similar changes.

Most practices are busier than ever before. Many practices we talk with are booking non-emergency visits by 4, 6, or even 8 weeks out. This is creating a service crisis for pet owners, who often take out their frustration on front desk staff or express it via Yelp reviews, and/or take their business elsewhere. This compounds the problem, creating burnout, exhaustion and turnover for staff at a time when the staff are needed more than ever.

 

Waiting room dogs
When you're facing a non-stop flood of patients, it can be hard to take a step back and plan for your business; but it's essential to your success – and your wellbeing!

What Is The Opportunity?

With unprecedented growth in pet ownership, and with pet owners more closely bonded to their pets than ever due to being stuck at home during the pandemic, this means a massive increase in demand for veterinary services. So there is a massive opportunity for veterinary practices to grow and prosper. 

There are opportunities to increase prices and margins, hire more qualified staff, and improve your facilities to be ready to deliver your services to your community in greater volume than ever before – increasing the value of your business, which is most practice owners’ most valuable asset. 

Pet owners are typically very loyal to their DVM; so if you can acquire that new pet owner as a client, it’s worth more than just that first $99 exam fee – our network of DVMs typically estimate the lifetime value of a single client at $5000 or more. This is what we mean when we call this the opportunity of a lifetime.

 

How Are Practice Owners Responding?

Sadly only a small percentage of practices are properly capitalizing on this opportunity by increasing staffing, enlarging their facilities, and improving their processes, training, and marketing approaches to capture this new business. The majority are trying to keep “business as usual” going, resulting in awful appointment wait times, frustrated clients, and burned-out staff. Many are throwing in the towel entirely and selling their practice.

And by the way, we’re not saying that it’s "wrong" to sell – only that if you’re going to sell, it should be for the right reasons and at the right time, and not just due to stress and burnout.

 

This Isn’t Seasonal – This Is A New World

This isn’t just a temporary surge in demand. This is completely different than anything that’s happened before. There are millions of new families with pets that will have these pets for many years to come. If the demand “slows down” for your practice, it would only be because those families found another DVM.

 

Sell, Struggle, or Grow?

In future articles in this series, we'll unpack in greater detail the pros and cons of selling a practice, and also provide further tips and strategies to help practices overcome "the struggle."

While of course we respect every business owner’s right to determine their own strategy, we feel it’s fairly self-evident that growth is the path that is ultimately best for the owner, the staff, and their community. Even if selling is the ultimate goal, a practice owner should first focus on getting the culture right and the hospital running profitably, rather than selling under duress because they are overwhelmed. And, once you get your practice running well, you might even decide you want to hang on to it for a few more years!

While growth can be hectic and even scary, the bottom line reality is: someone is going to take on these new clients – if you don’t, then your competitor will. And make no mistake: corporate groups definitely see this opportunity and are pouncing on it, acquiring clients and buying up thousands of practices from owners who are burned out and exhausted.

 

What Are the Costs of Missing Out?

Handling this increased demand poorly – basically trying to “hang in there” without making any changes, leads to:

  • Upset clients
  • Lost clients who become “clients for life” for someone else – often big corporates
  • Exhausted staff
  • Turnover
  • Poor financial performance
  • Owner burnout
  • Lower practice valuation
  • And ultimately delivering less value to your community

A friend shared a recent experience she had at her local veterinarian. While waiting to be seen, she could clearly hear the front desk staff bad-mouthing clients that called in for being so “ridiculous” as to want a prompt appointment to treat their pet – and they were doing this in front of several clients in the waiting room! Sadly this is all too common right now. Those clients who were so “unreasonable” at not wanting to wait 6 weeks for an appointment will most likely move on and find another DVM – not to mention those clients sitting in the waiting room that got a front-row seat to see the disrespectful attitude of the practice staff.

 

What Are The Benefits of Getting It Right?

On the other hand, embracing today’s new business opportunities can lead to:

  • Acquiring new, high-quality “clients for life”
  • Improved profitability
  • Improved pay for staff
  • Improved staff retention
  • Higher practice valuation
  • Delivering more value to your community!

But it’s not an easy path. Growth requires confronting challenges with recruitment, culture, retention and client relationships – not to mention local building codes and regulations. 

 

Mindset Is The First Step

Before taking action, it’s crucial to create a growth mindset that will get you ready to be successful. You can’t take the leap into growth while secretly expecting it not to work out – you’ll prove yourself right!

Here a few ways that successful practice owners make this happen:

  1. Decide for yourself that you’re going to grow and meet the demand for care in your community.
  2. Write down your goal as specifically as possible and share it with important people in your life who can help keep you accountable.
  3. Talk over your goal with your leadership team and get them aligned with you.
  4. Bring this goal to your team and get them onboard.
  5. Then, with your full team aligned, you can truly start to tackle the challenges of recruitment, culture building, and marketing to make this goal a reality!

 

This article is part of a series. Read the next part here! »

We’ll continue with more articles and videos to support you with each of these steps, with quotes and experiences from other top practices to inspire you. Please stay tuned. And if you need help with culture building, recruitment and marketing please contact our GeniusVets team!

 

 

Contributing DVM