It's June, and while many of us are thinking about summer vacation, gardening, and enjoying the outdoors, business owners should think of one more thing – checking the "pulse" of their business. The business needs a wellness check, like wellness exams on our patients. Instead of patient TPRs, do the business 3 Rs – Review, Reassess, and Reallocate for a midyear wellness check on the business's health.

Review

The most important reason for doing a midyear business review is to evaluate how you are doing by comparing year-on-year metrics and the status of strategic goals set for the current year. Some areas to review are:

●       Financial performance

●       Doctor production

●       Cost of goods

Are you improving over last year? Are you on track to achieve the goals set for this year? How is revenue this year compared to the previous year? What about client numbers? Are you growing? Is the team efficient and productive? If left unchecked, changes in any of these could spell disaster in the form of poor financial performance or failure to achieve your goals. Wouldn't it be better to identify a problem sooner rather than later?

One of the biggest problems we encounter is in the lab. For example, your Idexx bill may include much more than lab tests and supplies. Often it includes software support, radiograph review, etc., but the entire statement is recorded under lab expenses. This will make your lab ratios appear much worse than they really are. Another area where mistakes are often made is payroll. The costs seem in line, but payroll is recorded as net wages, not gross wages. Also, check if any income or expense entries are miscategorized – it is easier to look back on the first six months instead of an entire year's worth of data entries.

If your metrics aren't where you want them to be, reset and reformulate action plans to get the numbers back on track. In addition to reviewing your metrics, take some time to reassess other areas of business operations.

Reassess

Reassess where you are compared to where you assumed you would be. Reassess your priorities and identify obstacles preventing you from achieving your desired numbers or goals for the year. But don't just look for obstacles; take some time to look for opportunities as well.

We all know that veterinary medicine and practice management are changing – just as soon as you finish implementing a change, something better comes along! Were you considering virtual exams or getting certified in Fear Free, Cat Friendly, or AAHA? Are clients requesting specific services or appointment hours that they hadn't mentioned in the past? Would purchasing new equipment allow you to offer new services, or would it sit unused? Did a team member return from a conference with new ideas perfect for your patients or business? You must overcome obstacles… one way to overcome an obstacle may be by exploring a new opportunity.

Additionally, cash flow is a crucial area to reassess at this point. Of course, improving cash flow is more than just cutting expenses but midyear gives you ample opportunity to review recurring expenses, identify unexpected costs, and plan for the remaining six months of business operations. Remember, there is only so much cutting before patient care or client service suffers. Reassess fees and increase them where appropriate. Yet, raising prices comes with its own set of caveats. Not comfortable with either of these options? Take a deeper dive into increasing revenue by assessing lapsed pets and getting them in for veterinary care. Reassess your SOPs regarding follow-up care and help make it easier for clients to schedule progress exams.

One form of cost-cutting can involve reassessing inventory management. Work with your inventory team to reassess price shopping, pricing techniques, errors in buy-to-sell data points, quantity on hand, and reorder points. Inventory can become a virtual black hole with similar drugs, special orders that were never used, and expired medications. This step will also require getting all associates on the same page to prevent too many similar drugs when only one or two are needed. If an associate suggests adding a new drug to the inventory, plan to meet to discuss if anything can be removed and replaced with the new drug.

Regarding planning – taxes should also be reassessed. You may have made one or two tax payments by this point. Your tax accountant isn’t as busy during the summer as they are in spring and fall. Ask them to review the business income, reassess tax projections, update your retirement contribution calculation, and estimate how much tax will be owed. Head off any surprises and budget for the final estimated payments.

Another area to reassess is team scheduling - does the team schedule match client demands, and what tasks can be done when there is a slow time (i.e., downtime duties) that can improve patient care while also increasing revenue (see the earlier paragraph about not raising fees or cutting costs, but instead, getting lapsed patients to come in).

Once you have reviewed and reassessed, you are ready for the final R in the 3Rs – reallocate resources.

Reallocate

Six months are remaining to make changes. All it takes is reallocating time, money, staffing levels, or other resources. If performance metrics are not where you wanted them, what are your action steps, and which resources need to be reallocated to achieve your desired numbers? If an opportunity is ripe for the taking, which resources should you allocate to take advantage of that opportunity?

Consider reallocating cash (if cash flow is strong) to purchasing new software or equipment. Putting a deposit down now for something that can be implemented during the slower fall/winter months may be an excellent strategic plan for the year’s second half. Ask the associate who is passionate about a new service that requires new equipment to research costs, installation, and training (and give them the stretch assignment to spearhead the project from start to implementation).

Speaking of associates, in need of adding another one? Instead of only looking at new candidate listings, contact previous ones you reviewed last year and find out if they are interested in a change. Some associates and other team members are passive candidates - they aren’t actively looking but may be willing to entertain a change and come to work for you.

Look for obstacles in the form of training/skills gaps and then find opportunities to send team members to CE or bring in a speaker for a lunch and learn. Reallocate funds to boost the budget for CE and take advantage of an opportunity to provide a new service (e.g., medical treatment, virtual care, remote patient monitoring, etc.). Any effort in this area can help improve revenue and productivity.

The bottom line: be flexible and pivot if you need to, or celebrate and keep up the excellent work if you are on track. Performing the 3 Rs wellness check on progress toward 2023 goals and the year-to-date metrics allows you to make adjustments and avoid suffering from any surprises at the end of the year. Once you complete the 3 Rs for the business, you can kick back and enjoy a little R&R yourself.