The veterinary sector is evolving and modernising to meet new challenges and customer demand. We’ve asked accountants and business advisers Hazlewoods to explain what it takes to succeed in the new landscape.
For many decades, the veterinary sector has proved very resilient to the ups and downs in the UK economy. It’s a real beacon of positivity in many ways. Enthusiasm for the sector is evidenced in many quarters with investors and lenders frequently being keen to support.
The profession has evolved significantly over the past 20 or so years. Trends include:
- Increased diversification but also opportunities for specialisation as well
- The growth of corporate groups
- Rising numbers of new independent start-up practices
- Changes to working hours and days
What really sets a high performing veterinary practice apart from the rest?
- A clear business plan – making sure everyone in the practice is working towards the same goals.
- A shared culture and ethos that is lived and breathed by everyone in the practice team – where the ‘desired behaviour’ in terms of team dynamics and high-quality client care is the ‘normal behaviour’. Having great systems, controls and protocols and ensuring these are robust but simple is incredibly powerful. No reinventing the wheel nor people singing from different song sheets.
- An effective pricing strategy where consistency of charging is key. All too often a pricing strategy is purely historic. Much better to consider the relationship between quality and type of service to the prices charged. Clear and strong communication with clients and the practice team valuing themselves by charging properly really makes a difference.
- Delivering small and continual evolutionary improvements really adds up to making a big difference, as with many businesses.
- Investing in the development and wellbeing of staff. The whole sector continues to be on a journey where health and wellbeing are pivotal. Those practices that really look after their teams and invest in their wellbeing, alongside strong mentoring and providing opportunities for clear progress, typically have happier teams, with stronger retention. This encourages strong financial performance (not the other way around). Forging a path of trying to be the employer of choice in the local area can really pay dividends.
How does the tax landscape fit into all of this?
- As ever, the tax landscape will continue to evolve. Speaking to advisers that listen to the owners’ future plans and understanding what success means to them, enables carefully thought through financial structures to be put in place. Funding often feeds into these discussions and changes in circumstance, such as an ownership change, should be a call to action for the financial structure to be reviewed.
- Those practice owners that are supported by their advisers with a clear remuneration plan and tax estimates being provided for a few years ahead, are much better placed to mitigate tax and ensure they are not faced with any unexpected surprises.
What if you are considering buying or setting up a practice?
- You need enthusiasm. Running a practice takes energy. Thinking carefully about your unique selling points and how you can market and communicate that is so important.
- A clear business plan is essential. There are veterinary consultants who can help with demographic modelling to help you assess the turnover potential of an established or prospective new practice. Armed with this knowledge, you can feed it into integrated financial projections, looking not only at the profit and loss account, but cash flow and balance sheets too. Your adviser should be able to help with this process if needed. Peppering your projections commentary with benchmarking information helps to provide lenders with reassurance about the reliability and feasibility of your plans.
- Take advice. Never be afraid to ask lots of questions so you can be sure that you’ve fully understood all the implications.
I have been with Hazlewoods since 2003 and specialise in supporting veterinary practices. I advise on a whole range of matters including strategy, profit improvement, tax planning, valuations, ownership change and buying and selling practices. I really enjoy meeting people and helping them develop their practice. I enjoy regularly presenting to the profession and also write for the veterinary press. Mark Harwood Partner, Hazlewoods LLP.