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Why Business Education is Important

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Presentation on theme: "Why Business Education is Important"— Presentation transcript:

1 Why Business Education is Important

2 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 Interview 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 correctly BUT… 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 $21,081 For 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 Debt Private Practice Advanced Study Salaries 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 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% 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)

7 Starting Salaries 2007 (per Specialty)
Equine $39,864 !!! YIKES! Large Animal $52,056 Small Animal $61,322 Public/ Corporate $57,113

8 The trickle down effect…
Veterinary Technicians $20,520 $23,630 $27,970 Though 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 medicine 3) 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 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.* 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-users HR RELATED! Practice actively pursues strategies to promote employee longevity (staff retention) Practice measures employee satisfaction Employee reward programs are tied to the client’s satisfaction and loyalty Average Income Use 3 Practices Above $64, % Do Not Use 3 Practices $55, Increase!!

14 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 Gender 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” has High correlation between incomes and the size and socio-economic level of the community The 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. Female The average woman clinic owner makes about 33% less than her male counterpart, regardless of years of experience. Median Annual Incomes of Veterinarians in 1997 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% 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?

17 Business Education

18 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

19 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! 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 conventions Check out offerings on VIN.COM Veterinary business and practice management books Join 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 through increasing business knowledge creating networking opportunities empowering students to achieve their personal and professional goals.

23 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 PLUS: 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 ◊ Finance Customer service ◊ Banking Negotiation ◊ Marketing Leadership ◊ Human Resources Managerial skills The VBMA enables students to pursue their own educational interests through lectures and hands-on experiences Cater this page to the upcoming event topics you have planned!

25 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 These are National VBMA perks that are offered to EVERY member at EVERY chapter

26 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 Highlight your chapter’s perks HERE!

27 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!!! Highlight your upcoming events HERE

28 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!!

29 Become a Member Membership forms are available now
Completed forms can be turned in to any officer It’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 Do It!!

30 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 Insert your chapter’s officers HERE Mention 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: Chapter:

32 Thank you!

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