A major portion of the value of your practice is based on profitability. So to increase your practice's value, it's important to manage your profits, revenue, and expenses. There are also intangibles to weigh: patient care, standards of care, client service, work-life balance, and so on. In one way or another, all these pieces affect profitability. To up your practice's value in preparation for a sale—or just to keep your practice in tip-top shape—consider these 11 items:
1. Emphasize ethics. Incorporate ethical guidelines into your practice's standards for patient care and client service. When mistakes occur, it's best to acknowledge and learn from them instead of trying to cover them up. Analyzing errors with the help of associates and support staff can often prevent future problems.
Following ethical business and accounting principles are critical to the ultimate value and "sale-ability" of a practice. And ethics also play an important role in maintaining positive relationships with veterinary colleagues and equine professionals in your practice area.
"When you're trying to sell a practice that's built on poor ethics, how do you explain hidden income, intermingled personal and practice expenses, failure to follow accepted patient care standards, or lack of respect from colleagues?" says Dr. Harry Werner, owner of Werner Equine in North Granby, Conn. From a business-value perspective, practicing unethically is a dangerous road to travel.
2. Articulate your standards for the quality of patient care you provide, the services you offer, and the work environment you create—then let them guide your decisions. Put these standards in writing so there's no confusion among your team members about how to best approach care and service. Written standards will also help team members understand—and meet—your performance expectations.
3. Strive for stellar patient care. Stay current on the latest medical techniques and strive to offer the best quality of care possible. This means referring cases when appropriate. Remember, clients can help you deliver exceptional care—if you educate them. Don't allow clients to be solely responsible for certain aspects of their horse's care. Take initiative to schedule that next visit if you know you want to see a horse again, for whatever reason—follow-up blood work, a lameness exam, dentistry.
Think about future necessary care and plant a seed in the client's mind. Do the horses need to be on a deworming or vaccine schedule? Do they need a checkup prior to competitive season to ensure they're in sound shape? "There's a lot of care that would happen a lot more often if the veterinarian was the one leading the charge rather than leaving it up to the client," says Denise Tumblin, CPA, a Veterinary Economics Editorial Advisory Board member and owner of Wutchiett Tumblin and Associates in Columbus, Ohio.