Practices see some growth in 2010, but also low profitability
Practice owners continue to see some revenue growth this year, but profitability problems continue to plague many practices, according to new data from the National Commission on Veterinary Economic Issues (NCVEI). Most practice owners have also been willing to raise fees, at least a little, to compensate for the softer market.
Peeking into revenue
More than 50 percent of practices saw revenue grow in second-quarter 2010 compared to 2009. This corresponds to results from a recent small-business survey reported on dvm360.com. Another 33 percent were flat, and 14 percent saw a decline.
Fighting back with fees
Slow revenue growth and regular price hikes from suppliers have led most practice owners to raise fees this year. A full 46 percent raised their prices between 1 percent and 4 percent, 29 percent increased fees by 5 percent to 8 percent, and 4 percent raised fees 9 percent to 12 percent. Nearly one-fifth of veterinarians are holding fees steady this year. One percent lowered fees.
Profitability remains low, according to analysis from NCVEI and VetPartners' profitability estimator online. An 18 percent profit margin is best, according to NCVEI, but only 23 percent of practice owners who used the estimator saw profit margins of 18 percent and above. The largest group, 39 percent, saw profitability at below 8 percent.
The NCVEI website continues to offer the free profitability estimator as well as data collection and sharing of practice financial information.
Click here to try the estimator or to enter your practice's numbers in the national database.