Recently, a veterinarian in the process of hiring a new practice manager asked me "What are the 10 things a practice manager needs to know to be effective?" What a great question! It took a little thinking to narrow the "must-know" list to just 10 items. But whether you're an owner-veterinarian, a practice manager, or the owner's managing spouse, I think you need to apply these strategies to manage the practice effectively.

1 Hire and develop "10" employeesNo, I'm not suggesting every practice needs to hire 10 team members. I'm saying that when you rate employees' performances on a scale from one to 10, the team members earning a 10 are the keepers.

Why is this so critical? Well, most of your management duties are personnel related, so great employees save you headaches. And the brutal truth is a five, six, or seven employee will never be a 10. So you really don't want to hire anyone who's not at least an eight—and you'll always strive to develop "10" employees.

2 Develop training programs The most effective training programs break learning into phases so employees systematically learn the appropriate skills in manageable chunks. To get started, break the employee's complete job description into three or four phases.

Next, a star employee can train the new hire, focusing on each phase for about a week. When the trainee finishes each phase, the training supervisor and then the practice manager (or managing doctor) should evaluate his or her skills, asking the employee to perform some of the newly learned tasks. If there's a problem at this point, retrain the employee before moving on to the next phase.

3 Institute effective inventory control systemsYour inventory costs should run 14 percent to 16 percent of gross revenue. Of course, you also need to balance product shelf life and inventory turns, and reduce inventory when possible by cutting redundant products. To achieve these goals, you'll likely use a mix of computerized and manual inventory systems.

If you have a manager, then you just need to compare your inventory cost with gross revenues and make sure the total cost of inventory falls between 14 percent and 16 percent of gross.

4 Ensure fee captureA practice manager isn't necessarily an income producer. But if she ensures that your team charges appropriately for all services rendered, the resulting revenue growth may cover her management salary. And, in my experience, if a manager takes the responsibility for charging clients out of the hands of the veterinarian recommending and providing the care, practice income dramatically increases. An effective manager knows how to incorporate systems that will ensure fee capture within the practice.

The key to success: effective internal controls. For example, your team could use in-hospital tracking forms to record all services provided to hospitalized patients and patient visit forms to track all care provided during outpatient visits.

5 Communicate effectivelyThe success of any business or individual depends on communication—a skill you must continually work to develop. Attending continuing education seminars that focus on communication and networking with other managers and business professionals through Rotary clubs or Toastmasters are great ways to improve your skill at establishing vertical channels of communication.

If you have a manager: Remember, your manager has a tough job. She must keep you, your clients, and your employees happy—which takes amazing people skills. Your job is to encourage your manager to hone these critical communication skills and provide her with continuing education opportunities.

6 Work the numbersHow does your practice compare to industry averages? Comparing your data to accepted benchmarks gives you a clear picture of your practice's health. For example, support staff costs should be 18 percent to 21 percent of gross profits.