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Veterinary Development Council Business Models Working Group Summary and Recommendations. Working Group Team. John Fishwick (Chair) BCVA Senior Vice-President and Senior Lecturer, RVC Andrew Curwen Chief Executive of XLVets Prof Colette Henry Norbrook Professor of Business & Enterprise, RVC
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Veterinary Development CouncilBusiness Models Working GroupSummary and Recommendations 23 January 2012
Working Group Team • John Fishwick (Chair) • BCVA Senior Vice-President and Senior Lecturer, RVC • Andrew CurwenChief Executive of XLVets • Prof Colette Henry • Norbrook Professor of Business & Enterprise, RVC • Dr Jonathan Rushton • Senior Lecturer in Animal Health Economics, RVC • Kimberly Fornace • Research Assistant, RVC
Remit • Identify and classify different business models (ie ways of working) for veterinary practices and the provision of veterinary services • To consider the merits and limitations of each of these models • To provide case studies of examples where specific models (or combinations of models) seem to have been particularly successful
Plan • Stick closely to remit • Not to repeat arguments and discussions of the Lowe Report and VDC Core Group • Make any recommendations • Specific, simple and clear • Assign responsibility and who should pay
Plan • Survey of Practices • Shortreport • Database available for interrogation • Bias and Inaccuracies in database • Anecdotal findings will be as important as objective data
Survey • Survey Monkey - online • Launched 8th September open for 6 weeks • Open to all veterinary practices with any involvement in food or farm animal work • Publicised on BVA website, email to BVA members, all BVA species and territorial divisions, Letters to Veterinary Record and Veterinary Times and short article in Veterinary Times
Overview of Survey • Questions 1-12 Practice Profile • Geographical Location, Structure, Staffing, Type of Work • Question 13-18 Working Practices • Who manages, out of hours, challenges in past year, marketing, succession planning • Question 19-20 Ways of Working • Examples of any successful ways of working, chance to give name details etc for follow up.
Survey • No control over who replied but we asked for only one response per practice • All questions were optional • About 15 minutes to respond • No detailed accounts or figures required – best “guestimate”
127 responses 16 excluded 111 responses considered 7 practices did not state location RCVS Database of Practices- 1444
Business Vehicles • The business vehicle is the legal structure(s) that are used in order to trade Partnership Limited Liability Limited Liability Partnership Limited Liability Company
Business Model • A broad term – describes the various ways a business operates • Extremely difficult to categorise the respondents into a small number of broad business models • Practices were categorized into different Types based on some objective clear measures
RCVS 2011 77% (86/111) practices were Mixed Practices 92% (1324/1444) of practices treating food animal were mixed (RCVS 2011)
What percentage (roughly) of the practice’s turnover is generated from:
Which of the above (activities) is most profitable for your practice?) Other included Consultancy Pathology CPD Provision
Who is Responsible for the day to day (business) management of the practice?
Please briefly describe how you currently market your veterinary services. All submitted text summarised with Wordle.com
What has been the single biggest challenge you have had to deal with in your practice in the past 12 months? “Others” include: Maintaining Facilities, Maintaining Customer Satisfaction, Effective Marketing of Business. Some practices said they had problems with younger vets not being interested in farm animal work or unwilling to do out of hours work.
How have you dealt with this challenge? Recruitment • If we find someone decent we offer them a job when we can. We have internships set up with one of the vet schools to help us to meet more young vets, get to know them properly and make sure that they are well grounded • we have adopted a more holistic approach to EMS in that we actively keep in touch with good students (and they are very rare!!) with a view to future employment - we have just (6 months ago) employed our first former seeing practice student after seeing practice with us • We've been very fortunate and have managed to resolve and employ good staff • Whilst not the only challenge, by far, we recognised some time ago that this was an area we needed to have a very long term view of and we have a comprehensive strategy ranging from giving talks at vet schools; having a structured approach .
Financial Challenges • Encouraging credit card payments • Discounts for early payments for farm clients • Raising fees • Evict the non payers • Generating turnover in the farm and equine depts has been easier this year than last but cash flow has been more difficult to maintain. We are going to target cash flow in the farm practice by offering more discount incentives for prompt payment. • Tightening up debt management • 11/111 practices said they are working harder and/or longer hours to solve business problems
Dealing with out of hours cover • As a single practice owner I have had 4 holidays in 12 years. I have tried paying more for out of hours/thought of quitting large animals very seriously as young vets are unwilling and unable to do it • Grit teeth and get on with it • Having to cover gaps myself in the cover for absence/ illness • We have chopped and changed the rota to suit all 4 vets as best possible and maintain 24 hour cover
How have you dealt with this challenge? (Q16)Keeping staff • Focus on management - development of a career path to meet expectations of staff, linked to appraisal system, CPD etc • management CPD, internal meetings • unfortunately ongoing due to staff leaving a branch surgery due to the partner that works there
Is succession planning currently or soon to be an issue for you and, if so, please briefly describe what steps you have taken/ plan to take to deal with it? 50% said succession planning was or would soon be an issue Some practices are really worried Some had already decided to close/retire at that time Introduction of shares to younger vets Recruiting new and/or younger partners to take over Forming limited company or LLP Working to improve the image and profitability of practice to make it more attractive to buyer Allowing working beyond 65 years
Please tell us about any particular business practices or ways of working that you have found especially beneficial to your business. (for example, specific organisational structures or systems, management practices, collaborative or supportive working arrangements with other practices/veterinary businesses etc) • Business restructuring • Team working across species • External collaboration and consolidating buying power • Development of service mentality • Concentrated marketing efforts • Website development • Flexible succession planning • Staff motivation • Keeping a tight eye on overheads
45/111 respondents were willing to give their names and contact details for follow up if necessary
Case Studies • Practices contacted and asked to write 100 words to give “ a short example of something your practice has done, perhaps a way of working or an initiative which has been successful..”
Case Study A • As one of several mixed Practices in a rural market town we took the initiative to form dedicated teams of large and small animal veterinary surgeons. This has led to more specialisation of work, staff having gained diplomas/certificates ... and allowed the large animal team to specialise in herd health and Farmer training... • This has allowed the Practice to expand, improve our work life balance, help to retain staff and most importantly has improved the bonding of our small and large animal clientele to our Practice within an ever competitive environment.
Case Study B • Our practice is a small west country Mixed practice. Our involvement with herd management systems has been from the 1980s. We have built our practice on service. Sometimes that is not enough to retain the modern dairy farmer with pressure from corporate practice. • Our innovation is to use one of our VNs as a specific large animal nurse. • She handles all appointments for routines and testing. Books all the Herdsure and SWHLI tests..... Vaccinates small herds and even reluctant large herds! Lameness, condition, abrasion etc. All done at an hourly rate which encourages her use and saves Vet’s time
Case Study C • First set up subscription based dairy health schemes in 2000... Based on genuinely proactive veterinary herd health structure through a monthly standing charge of one hour of professional time. Emphasis on charging for advice and not drugs. • Quarterly afternoon consultancy reviews with farm team, targeted mastitis reviews, nutrition input based on metabolic profiles • Good recording systems for farm data collection and handling with dedicated practice staff • Service is offered at several tiers • Dairy and Beef
Case Study D • Something that has been very important over the last 4 years has been engaging an external facilitator to help us..to develop our business values and goals. • We have a happy team who understand where we are going • We have a business we can be proud of..will be attractive for the next generation of farm vets • We challenge livestock industry to face more realistic fees- if we just respond to demand..we would be predominantly fixing things that are already broken or selling medicines
Case Study E • Successful business models in the aquatic sector demonstrate a significant level of integration between the practice and the industry. The successful practice is not simply responsive but is proactive within the industry, working with industry bodies, regulators and legislators (in aquaculture we have the BTA, SSGA, Environment Agency, CEFAS, VMD, Marine Scotland etc.). Working with the paraprofessionals such as nutritionists, laboratories etc is obligatory, with the vet assuming the role of trusted/key-adviser to their client - usually the farm management. Sensible professional fees and involvement in health planning are vital.
Recommendations • 1) Program of Training, Consultancy and Mentoring for the Profession • 2)In Depth Case Studies • 3) Veterinary Undergraduate Education
1) Program of Training, Consultancy and Mentoring for the Profession • a) Business Leaders from non veterinary sector to be invited to speak at BVA Congress and the congresses of BVA divisions (BCVA, SVS, PVS etc) • The aim would be to inspire practitioners to think about how they are running their businesses and think if they could be doing things differently. • These speakers should not be placed in a separate business stream but should address the main scientific session to ensure they get maximum exposure.
1) Program of Training, Consultancy and Mentoring for the Profession • b) Establish Active Learning Groups where a number of veterinary surgeons from practices come together regularly with an external facilitator to discuss how their businesses should be run most effectively and to share good practice
Active Learning Groups should be established by BVA and its Divisions, (species, specialist and territorial) • Use the model of Recent Graduate Support Schemes established by BVA using local BVA divisions • BVA should publicise and drive the set up of these, supply list of suggested facilitators and speakers and fund them for the first 6 months • Active Learning Groups will then have to sustain themselves. Commercial sponsorship would be acceptable.
1) Program of Training, Consultancy and Mentoring for the Profession • c) CPD Provision. Already excellent CPD provision by SPVS, VPMA. Need to ensure that this type of CPD is present at veterinary congresses and meetings where farm animal vets are present. • Species Divisions of BVA need to include these streams in their CPD meetings as part of the main scientific sessions, making use of the expertise already out there. • Areas to include • Staff recruitment, Retention and succession planning • Financial Management • Marketing • eg Internet Marketing Seminar at BCVA Congress
1) Program of Training, Consultancy and Mentoring for the Profession • d) BVA Publication In Practice to run a series of branded VDC Practice Management Articles aimed at farm animal veterinary surgeons. • In Practice already has an excellent series of Practice Management articles and an Practice Management Editorial Board. They could be invited to produce this series.
2) In-Depth Case Studies • Five In-depth case studies to be fully worked up and published as a resource. • This would require site visits and interviews with key staff. Should be carried out by independent researchers. • To be resourced by BVA and its farm species divisions- one case per organisation.
3) Veterinary Undergraduate Education • Essential that veterinary undergraduates think about business aspects of their profession. • Business aspects are already covered in the undergraduate curriculum of UK veterinary schools • Veterinary schools to ensure coordinated and sufficient provision in all 7 UK veterinary schools • BVA to explore this when they meet the Heads of Schools.
Two Further Long Term Ambitions • 1) Veterinary Leadership Program • 2) Investigating the number of livestock producers and livestock that are served by different types of veterinary practice.
Veterinary Leadership Program • Bring together a group of people from across the profession who have a shared interest in developing leadership the profession. • Develop links with leadership programmes in other professions that will facilitate cross fertilization of ideas • Define competency frameworks which could be taken up into the veterinary curriculum for undergraduates • Provide mentoring and support, including development programmes for existing veterinary leaders • Construct guidance for veterinary groups and organisations in the way that they may wish to appoint and support their leaders
Livestock and Vet Practice Type • Investigate the number of livestock producers served by each type of practice. • Are practices providing the types of services demanded by client? • Are practices able to provide services which client is not aware of but would benefit from? • Implications for disease surveillance, public health etc. • Data on these areas would open discussion on whether we have gaps in the animal health care across the country either in terms of quality or quantity, and hopefully lead to discussions on what to do next.
Acknowledgements • Rachael Gledhill of BVA • RCVS