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

$-

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

$90,000

$100,000

2004 2005 2006 2007 2008 2009 2010

Non-residentResident

Let’s compare that our starting salaries…

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

1983198419851986198719881989199019911992199319941995199619971998199920002001200220032004200520062007

Average StudentAverage Student DebtDebtPrivate PracticePrivate Practice

Advanced StudyAdvanced Study

Debt-to-Salary ratio

Year Debt

Private Practice Salary Debt/Salary

1983 $18,897 $19,872 95.1%

1995 $45,251 $31,925 141.7%

2007 $106,959 $58,106 184.1%

Starting Salaries 2007(per Specialty)

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

$50,000$52,000$54,000$56,000$58,000$60,000$62,000$64,000$66,000

0-4 5-10 11+

Number of Business Practices vs. Mean Income

Business Practices Utilization vs. Income

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

The Art of Businesscont.

• 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 satisfaction3.Employee reward programs are tied to the client’s

satisfaction and loyalty

Average IncomeUse 3 Practices Above $64,280 16%Do Not Use 3 Practices $55,300 Increase!!

Other Income Influencers

Factor Importance Index

Years in practice 100

Gender (male) 92

Clinic Ownership 58

High Self-Esteem 49

Hours Worked in Week 45

Low Client Waiting Time 43

High Socio-Economic Level Area 41

Low Use of Advertising 38

Weeks Worked/Year 31

Size of Community 30

Uses Standard Business Practices 20

Male vs. Female

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

Male Female % Difference

Large Animal Exclusive $71,500 $49,000 32%

Mixed Animal $52,354 $40,300 23%

Small Animal Exclusive $68,500 $44,500 35%

Equine $74,500 $41,500 44%

Median Annual Incomes of Veterinarians in 1997

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!!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 ◊ FinanceCustomer service ◊ BankingNegotiation ◊ MarketingLeadership ◊ Human ResourcesManagerial skills

• 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 3rd-

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. 26th – Speed Networking• Sept. 28th – NCVEI WebTools Training • Early-Mid Oct. – Dinner with Speakers

Dr. Jim Wilson, Mr. Mark Opperman, Mr. Fritz Wood• Oct. 28th – Business Management of Large Animal/

Ambulatory Practices – Dr. Rob Lynch of Pfizer• Early Nov. – Business Dinner Etiquette Event• Nov. 19th – New Officer Interviews• Dec. 5th – 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!