Presentation on theme: "Why Business Education is Important"— Presentation transcript:
1 Why Business Education is Important Presented by:PROUDLY SPONSORED BY:
2 Q & AHow many of you have a degree in Business? Or know what I am talking about when I say:Revenue performancePretax profitsCash FlowReturn on EquityInterview audience to ascertain their familiarity with terms
3 THAT’S OK!!Less than 10% of veterinary students surveyed could answer 3 or more of these financial terms correctlyBUT…Business education is imperative to success in the veterinary profession!!And… 28% of male and 38% of women veterinarians in the study got all of the terms incorrect!!!HOWEVER – please do not think that it is ok to continue on this path. It’s important to learn something about business and this presentation will show you why.Let’s take a took at some of the financial breakdowns we are facing.Source: Brakke Management and Behavior Study. JAVMA vol 217, 2000.
4 Tuition, fees, expenses by Class Year In-state tuition for the Class of 2004 was $21,081For the Class or 2010, average in-state tuition is $36,914 (totaling almost $60,000 more for the cost of their four-year degree)This is a 75% increase in the cost of your DVM degree or 12.5% annually over the past six years.More alarmingly, nearly 1/3 of students are attending vet schools as nonresidents. These students will graduate paying at least $80,000 more for the cost of their education than those who graduated in 2004 (an annual increase of 10.66%!)Source: Introductory Comments For 2008 NAVC Economic Summit “Inviting the Elephant into the Room”James F. Wilson, DVM, JD (President, Priority Veterinary Management Consultants)
5 Let’s compare that our starting salaries… Average Student DebtPrivate PracticeAdvanced StudySalaries are increasing as well, but not at the same pace as educational debt. Take NOTE of the trends on the graph of tuition vs. starting salaries. Debt is clearly outpacing salaries.Overall, income for private practice vets has increased 25.1% since BUT, when adjusted for inflation, the average annual income has only increased 0.87%!!Another fallacy lies with internships. The starting salary for internships has been relatively stagnant, so that when adjusted for inflation these incomes have actually decreased at a rate of 0.36% annually since Interestingly enough, in 1980, an estimated 8% of new graduates completed internships. In 2007, 36.8% of new grads entered one.Source: Introductory Comments For 2008 NAVC Economic Summit “Inviting the Elephant into the Room”James F. Wilson, DVM, JD (President, Priority Veterinary Management Consultants)
6 Private Practice Salary Debt-to-Salary ratioYearDebtPrivate Practice SalaryDebt/Salary1983$18,897$19,87295.1%1995$45,251$31,925141.7%2007$106,959$58,106184.1%Based on data published annually in JAVMA, in 1980, educational debt was 91.6% of the mean starting salary (about a 1:1 ratio) whereas in 2007 it is 184.1% (about a 2:1 ratio). That accounts for a doubling of the debt:salary ratio for new graduates during this time period, which will impact your ability to buy a house, save for retirement, provide for your family, buy-into a practice, etc. etc.Source: Introductory Comments For 2008 NAVC Economic Summit “Inviting the Elephant into the Room”James F. Wilson, DVM, JD (President, Priority Veterinary Management Consultants)
8 The trickle down effect… Veterinary Technicians$20,520$23,630$27,970Though improving, licensed vet techs salaries still average about $13.90/ hour and vet assistants earn $9.54. We all know that a good technician is worth their weight in gold!! Is this the income they deserve?Source: US Department of Labor, Bureau of Statistics
9 How do we fix this? Two options: Decrease our debt load (Cost of tuition go down? Unlikely….)Increase business profitability….. so we can be paid more…
10 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 medicine3) There is a difference between charging what we are worth and gouging people.Knowing the difference takes education!Do we have a self-perception problem? Many vets cringe at the thought of discussing money– but why is that?
11 Everything is fixable!!The Brakke study showed that veterinary incomes are negatively impacted by:1) Failure to use standard management practices2) Poor service environment at the clinic3) Low financial acumen of clinic owners4) 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.*In 2000, the AVMA commissioned Brakke Consulting to conduct a study regarding the business behaviors of small animal practitioners, both associates and clinic owners after the results of a landmark study (the KPMG study) showed the income in the veterinary profession was stagnant over the previous 15 years.*WE CANT RADIOGRAPH THE CLIENTS WALLET. In many cases in the study, less aggressive, less expensive treatment options were recommended to the financially limited client. Is this best for the patient?Source: JAVMA Executive Summary, “Impact of Management Practices and Business Behaviors on Small Animal Veterinarians’ Incomes”, 1999
12 The Art of Business Business Practices Utilization vs. Income The Brakke study examined use of 19 standard business practices associated with well-managed companies.Conclusion: Veterinarians do not take advantage of good management practices and, thus, sacrifice potential income.Conclusion: There is a direct relationship between utilizing more business practices and higher income!
13 The Art of Business cont. What were the top 3 business practices that demonstrated the largest average income differential between users and non-usersHR RELATED!Practice actively pursues strategies to promote employee longevity (staff retention)Practice measures employee satisfactionEmployee reward programs are tied to the client’s satisfaction and loyaltyAverage IncomeUse 3 Practices Above $64, %Do Not Use 3 Practices $55, Increase!!
14 Other Income Influencers FactorImportance IndexYears in practice100Gender (male)92Clinic Ownership58High Self-Esteem49Hours Worked in Week45Low Client Waiting Time43High Socio-Economic Level Area41Low Use of Advertising38Weeks Worked/Year31Size of Community30Uses Standard Business Practices20Gender is the 2nd highest! Women associates are twice as likely to work less than 40 hours per week, vs. 14% men assoc, 6% women owners, 3% men owners. Reinforces the fact that we need to do more research and learn more about the differences in economic motivation, expectation and performance between men and women veterinarians.Customer service, or the perception of such, is important as well, evident by the impact that “Low Client Waiting Time” hasHigh correlation between incomes and the size and socio-economic level of the communityThe larger the community, the higher the average incomes of veterinarians – exception is in the largest cities (greater than 250,000) – highest incomes in 50, ,000 range (33%) - $60,760
15 Male vs. FemaleThe average woman clinic owner makes about 33% less than her male counterpart, regardless of years of experience.Median Annual Incomes of Veterinarians in 1997MaleFemale% DifferenceLarge Animal Exclusive$71,500$49,00032%Mixed Animal$52,354$40,30023%Small Animal Exclusive$68,500$44,50035%Equine$74,500$41,50044%There are now more women practicing veterinary medicine than men, and that percentage will only rise in the coming years. Why do women continue to be paid significantly less?Reference: Felsted, Karen and John Volk, Veterinary Economics, October 2000, p
16 How do we start to fix the problem? Education! So…How do we start to fix the problem?Education!Since the cost of education won’t be decreasing any time in the near future, what can we do to help improve business profitability? What can we bring to our future employer that will allow him/ her to pay us the salary we NEED to pay off our loans?
18 What do I Mean by Business Education? NumbersFinanceAccountingValuation & DemographicsConceptsClient ServiceLeadershipPersonnel ManagementMarketingLifePersonal FinanceContract negotiationHow money works in the real world
19 Public Relations Learn to skillfully ask for referrals Your clients are your best form of advertisementLearn how to keep your clients happyIt costs 5 times as much to get a new client as it does to keep an old oneFor every client that complains there are 20 more that have a problem but did not say a word!Education regarding fundamental business concepts is the first step, such as improving public relations.
20 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?Other concepts to help improve business profitability…
21 How am I Going to Educate Myself? Attend business education courses at conventionsCheck out offerings on VIN.COMVeterinary business and practice management booksJoin the VBMA!!The easiest way is to join your local VBMA chapter, which brings business education to you!
22 Veterinary Business Management Association The VBMA is a national student-driven organization dedicated to advancing the profession throughincreasing business knowledgecreating networking opportunitiesempowering students to achieve their personal and professional goals.
23 What Is the VBMA?The fastest growing veterinary student group in the United States28 chapters at every veterinary school across the country and multiple international chaptersOver 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 collegesPLUS: chapters in Australia, the United Kingdom, the Caribbean to create an expansive network of resources
24 What Do I Learn from the VBMA? Veterinary students develop following skills through membership of the VBMA:Communication ◊ FinanceCustomer service ◊ BankingNegotiation ◊ MarketingLeadership ◊ Human ResourcesManagerial skillsThe VBMA enables students to pursue their own educational interests through lectures and hands-on experiencesCater this page to the upcoming event topics you have planned!
25 What Are the Perks? Receive free subscription to Veterinary Economics ScholarshipsWin $1,000 cash each year (one from each school) from VPISimmons Educational Fund scholarship for $2,000 to one 3rd-year student each year at each schoolDiscounts on legal/ business texts published by Priority PressBusiness Internship OpportunitiesOpportunities for leadership on a local and national levelThese are National VBMA perks that are offered to EVERY member at EVERY chapter
26 Chapter PerksReceive the VBMA monthly mailing with articles of interest and suggested readingGiveaways for members at each eventAccess to speakers and their notesHighlight your chapter’s perks HERE!
27 Semester Events Sept. 26th – Speed Networking Sept. 28th – NCVEI WebTools TrainingEarly-Mid Oct. – Dinner with SpeakersDr. Jim Wilson, Mr. Mark Opperman, Mr. Fritz WoodOct. 28th – Business Management of Large Animal/ Ambulatory Practices – Dr. Rob Lynch of PfizerEarly Nov. – Business Dinner Etiquette EventNov. 19th – New Officer InterviewsDec. 5th – Business Philosophies and Opportunities – National Veterinary Associates’ Dr. Nate CockleEarly Feb. – Dr. Ernie Ward!!!Highlight your upcoming events HERE
28 JOIN THE VBMA!! Impress future employers Demand the higher salary Receive VBMA Perks & GiftsPrepare for life after vet schoolGet a head start at being the best veterinarian that you can beInvest in your future!LEARN TO WORK SMARTER-- NOT HARDER!!
29 Become a Member Membership forms are available now Completed forms can be turned in to any officerIt’s never too late to join!Be sure to include any relevant incentives, such as “Join today and be eligible for memory stick at 1st membership meeting”Just DoIt!!
30 Chapter Officers President – H. Groch VP – Tori Long Secretary – Amy RevenisTreasurer – Lauren WhiteOperations Manager – Michelle LarsenSpeaker Liaison – Cyndie JohnsonPublic Relations Chair – Shalyn CrawfordCongratulations to Cyndie –our new National VBMA Marketing ChairInsert your chapter’s officers HEREMention how students can get involved if they are interested in becoming an officer (it’s never too early to start recruiting next year’s officers!!)
31 More information Our website(s): National: www.vbma.biz Chapter: