Why Business Education is Important

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Q & A

• How many of you have a degree in Business? Or know what I am talking about when I say: – Revenue performance – Pretax profits – Cash Flow – Return on Equity

THAT’S OK!!

•

Less than 10% of veterinary students surveyed could answer 3 or more of these financial terms correctly BUT… Business education is imperative to success in the veterinary profession!!

Source: Brakke Management and Behavior Study. JAVMA vol 217, 2000.

Tuition, fees, expenses by Class Year

$100,000 $90,000 $80,000 $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $ 2004 2005 2006 2007 2008 2009 2010 Non resident Resident

$120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $0

Let’s compare that our starting salaries…

Average Student Debt Private Practice Advanced Study

Debt-to-Salary ratio

Year 1983 1995 2007 Debt $18,897 $45,251 $106,959 Private Practice Salary Debt/Salary $19,872 95.1% $31,925 $58,106 141.7% 184.1%

$70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $0

Starting Salaries 2007 (per Specialty)

Equine Large Animal Small Animal Public/ Corporate

The trickle down effect…

Veterinary Technicians

1998 $20,520 2001 $23,630 2007 $27,970

Source: US Department of Labor, Bureau of Statistics

How do we fix this?

Two options:

1) Decrease our debt load

(Cost of tuition go down? Unlikely….)

2) Increase business profitability

….. so we can be paid more…

Money is NOT a four letter word!!

Why Not?

1) We are worth more than the current average!

2) We need it to support our profession - improve veterinary teaching facilities - fund research that improves veterinary medicine 3) There is a difference between charging what we are worth and gouging people.

Knowing the difference takes education!

Everything is fixable!!

• The Brakke study showed that veterinary incomes are negatively impacted by: 1)Failure to use standard management practices 2)Poor service environment at the clinic 3) Low financial acumen of clinic owners 4) Veterinarian’s tendency to offer and price services to clients based not on the diagnosis and value of treatment rendered on perception of a client’s economic status.*

The Art of Business

Business Practices Utilization vs. Income

Number of Business Practices vs. Mean Income

$66,000 $64,000 $62,000 $60,000 $58,000 $56,000 $54,000 $52,000 $50,000 0-4 5-10 11+

Conclusion:

There is a direct relationship between utilizing more business practices and higher income!

The Art of Business cont.

• What were the top 3 business practices that demonstrated the largest average income differential between users and non-users –

HR RELATED!

1.Practice actively pursues strategies to promote employee longevity (staff retention) 2.Practice measures employee satisfaction 3.

Employee reward programs are tied to the client’s satisfaction and loyalty

Use 3 Practices Above Do Not Use 3 Practices

Average Income

$64,280 $55,300

16% Increase!!

Other Income Influencers

Factor Years in practice Gender (male) Clinic Ownership High Self-Esteem Hours Worked in Week Low Client Waiting Time High Socio-Economic Level Area Low Use of Advertising Weeks Worked/Year Size of Community Uses Standard Business Practices Importance Index 100 92 58 49 45 43 41 38 31 30 20

Male vs. Female

The average woman clinic owner makes about 33% less than her male counterpart, regardless of years of experience.

Median Annual Incomes of Veterinarians in 1997 Male Female

% Difference

Large Animal Exclusive $71,500 $49,000

32%

Mixed Animal Small Animal Exclusive $52,354 $68,500 $40,300 $44,500

23% 35%

Equine $74,500 $41,500

44%

Reference: Felsted, Karen and John Volk,

Veterinary Economics

, October 2000, p. 33-38

So…

How do we start to fix the problem?

Education!

Business Education

What do I Mean by Business Education?

• Numbers – Finance – Accounting – Valuation & Demographics • Concepts – Client Service – Leadership – Personnel Management – Marketing • Life – Personal Finance – Contract negotiation – How money works in the real world

Public Relations

• Learn to skillfully ask for referrals – Your clients are your best form of advertisement • Learn how to keep your clients happy –

It costs 5 times as much to get a new client as it does to keep an old one

– For every client that complains there are 20 more that have a problem but did not say a word!

Food for Thought…

• Do you know how to maintain good relations with your employees?

• Do you know how to communicate effectively?

• Do you know how to design and implement HR programs that prevent employee turnover?

• How is your business acumen?

How am I Going to Educate Myself?

• Attend business education courses at conventions • Check out offerings on VIN.COM

• • Veterinary business and practice management books

Join the VBMA!!

Veterinary Business Management Association • The VBMA is a national student-driven organization dedicated to advancing the profession through –

increasing business knowledge

–

creating networking opportunities

–

empowering students

to achieve their personal and professional goals.

What Is the VBMA?

The fastest growing veterinary student group in the United States • 28 chapters at every veterinary school across the country and multiple international chapters – Over 2,500 student members worldwide!

Founded on the determination, innovation, and entrepreneurial spirit of future veterinary leaders who desire a higher level of business education than what is being offered through veterinary colleges

What Do I Learn from the VBMA?

• Veterinary students develop following skills through membership of the VBMA:  Communication  Customer service  Negotiation ◊ Finance ◊ Banking ◊ Marketing  Leadership  Managerial skills ◊ Human Resources • The VBMA enables students to pursue their own educational interests through lectures and hands-on experiences

What Are the Perks?

• Receive free subscription to

Veterinary Economics

• Scholarships – Win $1,000 cash each year (one from each school) from VPI – Simmons Educational Fund scholarship for $2,000 to one 3 rd year student each year at each school • Discounts on legal/ business texts published by Priority Press • Business Internship Opportunities • Opportunities for leadership on a local and national level

Chapter Perks

• Receive the VBMA monthly mailing with articles of interest and suggested reading • Giveaways for members at each event • Access to speakers and their notes

Semester Events

• • • • • • • •

Sept. 26 th

– Speed Networking

Sept. 28 th

– NCVEI WebTools Training

Early-Mid Oct.

– Dinner with Speakers Dr. Jim Wilson, Mr. Mark Opperman, Mr. Fritz Wood

Oct. 28 th

– Business Management of Large Animal/ Ambulatory Practices – Dr. Rob Lynch of Pfizer

Early Nov.

– Business Dinner Etiquette Event

Nov. 19 th

– New Officer Interviews

Dec. 5 th

– Business Philosophies and Opportunities – National Veterinary Associates’ Dr. Nate Cockle

Early Feb.

– Dr. Ernie Ward!!!

JOIN THE VBMA!!

• Impress future employers • Demand the higher salary • Receive VBMA Perks & Gifts • Prepare for life after vet school • Get a head start at being the best veterinarian that you can be • Invest in your future!

• LEARN TO WORK SMARTER-- NOT HARDER!!

Become a Member

• Membership forms are available now • Completed forms can be turned in to any officer • It’s never too late to join!

Just Do It!!

Chapter Officers

President – H. Groch VP – Tori Long Secretary – Amy Revenis Treasurer – Lauren White Operations Manager – Michelle Larsen Speaker Liaison – Cyndie Johnson Public Relations Chair – Shalyn Crawford

Congratulations to Cyndie – our new National VBMA Marketing Chair

More information

Our website(s): National: www.vbma.biz

Chapter: http://www.vetmed.vt.edu/students/vbma/index.html

Thank you!