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Portugal workshop ODMV April 2018 Lisbon
The document discusses a program on veterinary business topics including the economic performance of equine practices in Europe, ownership of veterinary practices, strategy, customer retention, and staff happiness. It then provides information on Oculus Insights, a global business education company that offers multi-day and one-day veterinary business programs. The executive leadership team and backgrounds of the speakers are listed. Finally, an overview is given of Joop Loomans and one of his past presentations on the past, present and prospects of the equine veterinary profession.
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Portugal workshop ODMV April 2018 Lisbon
- 2. Today’s Program The EconomicPerformance of Equine Veterinary Practices in Europe Recent Development in Ownership of Veterinary Practices Putting a Strategy in Place for your Practice (and your Neighbors) Getting a Return on your Investment in Veterinary Practice Keeping your Customers, your Staff and Yourself happy
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- 5. Who is Oculus? •Global Business Education Company • Business Consulting & Management Services • Industry-Focused Programming • Relationship/Networking • Strategic Partnerships
- 6. The Oculus LearningOpportunities • 4 Day Immersion programs at different locations in the worldBusiness Summits • One-Day, Topic Driven programs not species specificBusiness Workshops • 3 Year Educational Certificate program not species specific at MBA level Veterinary Business School Business Consulting • Customized solutions and speaking engagements
- 7. Joop Loomans DVM,PhD Utrecht, The Netherlands & China Robert Magnus DVM, MBA Wisconsin, United States Michael Pownall DVM, MBA Toronto, Canada Executive Leadership Team Including: Consortium of business professionals, industry specialists, instructors, and coaches
- 9. Joop Loomans DVM,MS, PhD, PTV FEI, Certified Equine Practitioner Heilan International Equestrian Club, China Loomans International Veterinary Expertise Oculus Insights BV LLC
- 10. THE EQUINE VETERINARIAN PAST,PRESENT AND PROSPECTS OF A PROFESSION J.B.A. Loomans Department of Equine Sciences Faculty of Veterinary Medicine, Utrecht University, The Netherlands November 2008
- 12. Session 1 The EconomicPerformance of (Equine) Veterinary Practices in Europe
- 14. The target groupfor this survey exists of the Veterinary students of all stages of study from all over the globe. We have been collecting answers from 31 of October 2014 till 31 of January 2015. In total, 3111 students from 89 countries participated in the survey. Survey was done online and it was anonymous.
- 16. Loomans et al2008, Brown and Silverman 1999, Bakhuizen et al 2007 Aspects of job motivation in order of importance. 1 = very important, 2 = important, 3 = indifferent, 4 = not important, 5 = not important at all. Total Satisfaction of clients’ needs 1.72 Solving (veterinary) problems 1.87 Applying clinical skills 1.93 Curing sick animals 1.94 Working with horses 1.94 Fulfilment of own expectations 2.19 Working in a team 2.29 Working outdoor 2.47 Working with horse owners 2.66 Income 2.71
- 17. Federation of Veterinariansof Europe www.fve.org 4 FVE Sections UEVP (Practitioners) UEVH (Hygienists – Public Health Officers) EASVO (Veterinary State Officers) EVERI (Education, Research, Industry) Federation of veterinarians of Europe 46 national organisations 38 European countries
- 18. Content report: 5 chapters+ country reports 1. Demography 2. Demand veterinary services 3. Veterinary practices 4. Working as a vet 5. Future of veterinary profession See: www.fve.org
- 19. www.fve.org FVE Survey ofthe Veterinary Profession in Europe 24 FVE Member Organisations participated fully 2 partially (provided results of own surveys) > 13 000 vets replied to the survey (statistical confidence +/-0,85 % at 95% conf. level) 173 Portugal (5.000 vets) Results reflect personal understanding, perspective and knowledge of the individual vets. This can divert from national statistics.
- 23. www.fve.org Key findings demography DEMOGRAPHY •Estimated number of veterinarians in European Union (EU 28) 182 900 in Europe (FVE 38): 243 000 • 44 % aged under 40 years • 53 % female / 47% male • 78 % work full-time • Reported unemployment is 3 % (reality probably higher) • Private practice dominates, employing 60 % of veterinarians • 19 % work in public service • 48 % work with/on issues related to companion animals
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- 26. www.fve.org Employment status –Europe 26 DEMOGRAPHY
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- 28. www.fve.org DEMOGRAPHY Vets/1000 population % < 40yrs % unemploy- ment Regarded by general public (rank 1 – 24) Regarded by customers (rank 1-24) Belgium 0,57 30 0,6 13 12 Italy 0,50 31 5,4 24 23 Spain 0,48 52 8,2 20 20 Portugal 0,48 76 5,3 17 18 Norway 0,44 40 0,9 4 5 Germany 0,33 43 1,8 6 9 France 0,26 39 0,9 7 6 Netherlands 0,23 32 0,6 9 8
- 31. www.fve.org Key findings demandveterinary services 31 DEMAND Long term downward trend pigs, poultry, cattle and sheep Dogs: stable, cats: slight increase Nothing about trends on horses 104 million cattle 150 million pigs 90 million sheep 13 million goats 417 million poultry 157 million companion animals 6 million horses 59 million exotics
- 32. www.fve.org Area of focus- Europe DEMOGRAPHY As percentage of veterinarians
- 33. On a largerscale:
- 35. www.fve.org Key findings workingas a veterinarian 35 WORKING AS A VETERINARIAN Average earnings: €38 500 (adjusted for Purchasing Power Parity PPP) Large difference in average earnings between countries: from 9 506€ to 63 579€ Outside practice, highest salaries in industry and research Male veterinarians earn on average 28% more than female veterinarians 28% of vets do not have a pension plan, and many who have a plan do not think it is adequate for their needs Vets are a mobile profession; 6% worked in another country in last 3 years
- 36. Average earnings (in€, adjusted for ppp) 36
- 37.
- 38. Working Hours EquineVets Veterinarians Total Male Female Sign. P<0,95 the Netherlands (Loomans et al. 2008c) Workig week 43.0 47.2 35.4 * After hour duty 9.4 9.5 9.2 Total 52.4 56.1 44.5 * Belgium (Meers et al. 2008 55.7 USA (Volk et al. 2005) 50.0 Australia (Heath 2003) 53.0 Finland (Reijula et al. 2003) 44.3 (excluding after hour duty) Total work force the Netherlands (Parent-Tirion et al. 2007) 31.0 1
- 40. Estimated Time spendingequine vet: Loomans et al 2007 Equine 61% Porcine 1% Ruminants 8% Pets 3% Education 4% Breaks 4% Teaching 1% Research 1% Telephone calls 5% Administration 12% Patient contacts 73%
- 41. Time “hands on” Workingweek of 15 - 80 hours Average 54 hours Available for equine 33 hours (61% of 52) However really registered 15 hours hands on and 6 hours driving. Still a lot of hours “missing”
- 42. Time “hands on” Locomotivesystem 27% Female genital system 24% Alimentary system and metabolic disorder 11% (Pre purchase) examinations 11% Vaccination 6% Anaesthesiology 5% Respiratory system 3% Rest category 4% Male genital system 3% Circulation, blood and hematopoietic tissues 0% Nervous system and sensory system 0% Identification, Registration, certificates 2% Injuries and trauma 2% Euthanasia 1% Urinary system 0% Skin 1% Loomans et al 2007
- 43. Most time consumingin Equine • Driving to patient • Follicle checks • Lameness examination • Full Pre-purchase • Vaccination • Pregnancy diagnosis • Radiology locomotion • Nerve blocks • Dentistry • Colic consultation • Clinical pre-purchase • General anesthesia • Ultrasound locomotion • Arthrocentesis • Uterine flush • Arthroscopy • Sedation • Endoscopy • Respiration consultation • Wounds • Colic surgery
- 44. Comparing Equine andMixed Equine Mixed Sign. 95% Benchmarks: Practices Practices Monthly equine hours "hands on" 71 34 * Equine revenues / Equine hours available € 94 € 129 Equine revenues / Equine hours "hands on" € 196 € 209 Equine revenues / Equine hours charged for € 140 € 150 Equine revenues / Equine patient € 151 € 110 Loomans et al 2007
- 45. Revenue by typeof Service – Europe Share of revenue: treatment 52%, surgery 20%, medicine sales 13%, official tasks 4%, food sales 6% and other 5% In countries with decoupling medicine prescription and distribution, less on medicines DEMAND 45 As percentage of total amount
- 46. Average revenue perpractice The average practice revenue figures are as reported and have not been adjusted to take account of purchasing power Vets and nurses 24 countries BE DE NL 1 person 85.318 € 103.280 € 92.215 € 98.551 € 2 persons 163.097 € 153.250 € 249.424 € 181.455 € 3 – 5 persons 312.313 € 360.455 € 298.516 € 308.075 € 6 -10 persons 794.386 € 986.000 € 506.634 € 496.256 € 11 – 30 persons 1.414.384 € 1.000.000 € 1.128.205 € 1.179.648 € 31 – 50 persons 3.394.478 € 2.573.333 € 4.122.000 € > 50 persons 6.488.876 € 46 PT 22.500 € na 55.167 € 164.000 € na na
- 47. www.fve.org Key findings inrespect to the future 47 THE FUTURE • 68% believe that “Too many newly qualified veterinarians are emerging from Veterinary schools” • Areas where more veterinarians will be needed: animal welfare Companion animals & exotic animals disease control Environment • In order to meet the challenges of the next five years: 83 % think more specialization is needed 80 % think more business training is needed 49 % think more legislation for the profession is needed
- 48. Sample Practice IncomeStatement Benchmark Data Is the average of 30 equine practices in the USA in 2016. Industry Benchmarks PRACTICE 2016 100.00% Practice Income (Revenue) $ 2,500,000 Expenses 26.39% Total Cost of Professional Services $659,750 19.36% Drugs & Supplies 7.03% Hosptitalation, Lab costs, etc 73.91% Gross Profit $1,840,250 5.67% Administrative Expense $ 141,750 10.22% Facility and Equipment Costs $255,500 45.04% Payroll Costs $ 1,127,250 12.63% Operating Income (EBITDA) $ 315,750 2.79% Depreciation Costs $ 69,750 0.45% Other Income/Expenses ($ 12,500) 9.39% Net Income € 233,500
- 49. Session 2 Recent Developmentin Ownership of Veterinary Practices
- 50. Profession The principal activityin your life that you do to earn money.
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- 52. Veterinary Compensation (Salary) Management Compensation (%of Gross) Real Estate Compensation (Rent) Practice Owner Compensation (ROI)
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- 54. Meeting young veterinariansin the Netherlands 2009 • 50 % is expecting not to be working in practice within 5 years! TvD 1-1-2009
- 55. • Problems foryoung veterinary professionals? • International research shows: • Increased risk of psychological distress and burnout amongst veterinarians • Increased risk of developing burnout amongst female and recently graduated veterinarians • Young veterinarians experience “the shock to practice” Reason for Study Mastenbroek: Mastenbroek et al 2014
- 56. Current Market Analysis CurrentPractice Ownership • Retiring Owners • No Exit Strategy • Private Equity solution? • 28% in Europe, 58% in Portugal is not having a pension plan. The practice it the pension!
- 57. Current Market Analysis NextGeneration of Owners? • Work/Life Balance • Large Student Debt in USA • Job Dissatisfaction • Transition Challenges
- 58. Current Market Analysis •Price Sensitivity • High Investments • Competition • Lack of Management Skills • Lack of Data Analysis
- 59. Current Market Analysis •Disconnect with Customers • Expectations • Delivery Models • Fragmented Health Care Sources • Poor Customer Service
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- 68. Buyers – Others Associate(employee) Veterinarians Key Staff Other Practices Buying Groups Family
- 69. Sample Practice IncomeStatement Benchmark Data Is the average of 30 equine practices in the USA in 2016. Industry Benchmarks PRACTICE 2016 100.00% Practice Income (Revenue) $ 2,500,000 Expenses 26.39% Total Cost of Professional Services $659,750 19.36% Drugs & Supplies 7.03% Hospititalation, Lab costs, etc. 73.91% Gross Profit $1,840,250 5.67% Administrative Expense $ 141,750 10.22% Facility and Equipment Costs $255,500 45.04% Payroll Costs $ 1,127,250 12.63% Operating Income (EBITDA) $ 315,750 2.79% Depreciation Costs $ 69,750 0.45% Other Income/Expenses ($ 12,500) 9.39% Net Income € 233,500
- 70. EBITDA & MultipleBenchmarks North America Equine Practice Companion Animal Practice 3 – 6X EBITDA (Normalized) Average = 12% Range = 3% - 21% 3 – 8X EBITDA (Normalized) Average = 15% Range = 3% – 25%
- 71. Multiples for SmallAnimal Veterinary Hospitals 20x 18x 16x 14x 12x 10x 8x 6x 4x 2x 0x 0 1 2 3 4 5 6............200………..2,500 Single Site Clinic 1 DVM 3-5x EBITDA Single Site multi-DVM 4-10x Specialty Hospital 10-15x 20+ site Corporation 10-15x Revenue ($millions) EBITDAMultiple Valuations have trended higher in recent years due to increased competition for acquisitions Sources: Company disclosures and guidance from private equity investors
- 72. Current Consolidations • MainlyUSA, UK, Northern Europe • Mainly Companion Animals • Exit Strategy for Older Practice Owners • Is it a “Game Changer”? • Remains a Traditional Model? • What does it mean for you and our profession?
- 73. Building Practice Value 1.Increase Turnover (Sales Growth) 2. Increase Operating Margin (EBITDA) 3. Lower Risk 4. Decrease Practice Debt 2016 2015 2014 Annual Sales $1,704,935 $1,461,225 $1,348,197 EBITDA X 5 $914,060 $714,720 $294,080 Less Long Term Debt $130,331 $176,007 $99,400 Value of Practice $783,729 $538,713 $194,680 Prior Year Value Rate Change 45.5% 176.7% X
- 74. Building Practice Value 1.Increase Turnover (Sales Growth) 2. Increase Operating Margin (EBITDA) 3. Lower Risk 4. Decrease Practice Debt
- 78. Your road tosuccess TO BEE OR NOT TO BEE
- 79. Rehab Center Online Pharmacy Hospital / Hub Staff Education Center Pet Shop Traditional AMB Insurance Company Franchise Digital AMB Traditional AMB Traditional Hospital Remote Service Technician Remote Service Technician Nutrition Services Trainer Support Program Traditional AMB Traditional AMB Traditional AMB TackShop Digital AMB Farrier shops Digital AMB Digital AMB Farrier shops Digital AMB
- 80. Oculus Alliance Global Allianceof progressive independent veterinary practices managed for sustained success based on our shared vision of veterinary business in the present and in the future.
- 81. Oculus Alliance Vison Tobecome the most important Alliance of Equine Veterinary Practices that safeguards the future of the profession and its professionals while keeping the practices relevant players in the equine industry.
- 82. Oculus Alliance Mission Toensure that veterinary professionals have the skills, resources, network and tools to implement what is needed to achieve business, professional and personal fulfillment.
- 83. Session 3 Putting aStrategy in Place for your Practice (and your Neighbors)
- 84. What is The UltimateGoal of a Business ?
- 85. “The purpose of businessis to create and keep a customer” Peter F. Drucker
- 86. 4/16/2018 86 We Needa Plan!
- 87.
- 88. “A PLAYBOOK FORSTRATEGY” The Five Essential Questions at the Heart of Any Winning Strategy 4/16/2018 88 Playing to Win A. G. Lafley, Roger Martin, 2013
- 89. A PLAYBOOK FORSTRATEGY 1. What is your winning aspiration? 2. Where will you play? 3. How will you win? 4. What capabilities must be in place? 5. What management systems are required? 4/16/2018 89
- 90. Strategy is aChoice ! • What you will do? • What you will not do? • It becomes your “lens” 4/16/2018 90
- 91. What is yourwinning aspiration? Translate the “happy future” of a mission or vision statement into defined winning aspirations 4/16/2018 91
- 92. Mission Statement “To givehorse people peace of mind with the health care of their horse by helping them to make informed decisions”
- 93. Vision Statement “Our goalis to be a global equine veterinary business recognized for leadership and innovation in patient, client and employee care”
- 94. What is yourwinning aspiration?
- 95. Where will youplay? • Which markets • Which network • Which customers • Which region • Which product categories 4/16/2018 95
- 96. Where won’t youplay? • Which markets • Which network • Which customers • Which region • Which product categories 4/16/2018 96
- 97. How will youwin? • Very much connected with where you play • How to create unique value for your customers and how to sustainably deliver that to customers • Difficult to copy • Create your “Brand” 4/16/2018 97
- 98. What is aBrand “The expectation a person has when they hear your company name, or see your logo”
- 102.
- 107. What is aBrand “The expectation a person has when they hear your company name, or see your logo”
- 108. Which capabilities mustbe in place? What do you have to be distinctively good at in order to play where you want to play and win how you want to win! It is your competitive advantage. 4/16/2018 108
- 109. What management systemsare required? Systems that build, support and measure a strategy Otherwise, it’s just a “wish list” 4/16/2018 109
- 112. 4/16/2018 112 Every DecisionAffects the Strategy
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- 115. Strategy A description ofhow we can identify what our clients value and how we can deliver it
- 116. Marketing The activity and processesfor creating, communicating, & delivering offerings that have value for customers
- 117.
- 118. Winning Aspiration? •Dominate Markets •LowestCost •High Quality
- 119. Where Will TheyPlay? •Groceries and general merchandise •Value oriented customer
- 120. How Will TheyWin? provide value and quality to our customers by being fair and efficient in all we do
- 121. What Capabilities Mustbe in Place? •Economies of scale •Integrated logistics •Efficient systems •Staff training
- 122. What Management Systems areRequired? •Investment programs •Intensely managed •LEAN System
- 123. Try to answerthese 5 questions for your practice. 1. What is your winning aspiration? 2. Where will you play? 3. How will you win? 4. What capabilities must be in place? 5. What management systems are required? 4/16/2018 123
- 124.
- 125. Winning Aspiration? •Increase dentistrysales by 10% •Increase Facebook Likes •Improve newsletter click through rate •Start Instagram
- 127. Winning Aspiration 1. Showvalue of vet dentistry 2. Increase sales 10%
- 128. Where Will TheyPlay? • English sport horses • Trainer stables • Public stables • Lesson stables
- 129. How Will TheyWin? English sport horse veterinary care through excellent customer service and education
- 130. What are TheirCapabilities •Broad experience •Good practice management software •Current equipment •Online pharmacy
- 131. What are TheirManagement Systems • Client education • Excellent customer service • Staff Training • Social Media focus
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- 139.
- 140.
- 141. Session 4 Getting aReturn on your Investment in Veterinary Practice
- 142. What Investments areNeeded for Your Strategy? 4/16/2018 142
- 143. 4/16/2018 143 How toUse our Money Well
- 144. Financials 101 • Butfirst some basic understanding is necessary.... • You don’t need to become an accountant 16/04/2018 144
- 145. What is FinancialAccounting • The preparation and use of accounting information • Provided in the form of a company’s financial statements • Enables users to make informed decisions 16/04/2018 145
- 146.
- 147. Stocks and Flows 16/04/2018147 Opening Balance Sheet Assets Fixed Current Cash Liabilities Shareholders equity Equity shares Retained earnings Closing Balance Sheet Assets Fixed Current Cash Liabilities Shareholders equity Equity shares Retained earnings Statement of Cash Flow Operating activities Investment activities Financing activities Change in Cash Income Statement Revenues Expenses Net Income Beginning of accounting period End of accounting period
- 148. Let’s start withthe Accounting Equation 16/04/2018 148 Assets Liabilities Equity= +
- 149. Balance Sheet: Assets Tangibleand Intangible Economic Value • Is owned by the company • Used to generate future benefits • Assists in providing the products and services of the business • Available to meet debts or commitments • Can be sold or reversed into cash 16/04/2018 149
- 150. List as manyAssets as possible for a ABC Equine Clinic • • • • • • • • • 16/04/2018 150
- 151. Assets: An Overview TangibleFixed Assets Immobilisations corporelles Intangible Fixed Assets Immobilisations incorporelles Financial Fixed Assets Immobilisatoins financières Current Assets Frais payés d’avance Land Goodwill Joint Ventures Trade receivables Property Software developments Deferred tax assets Other receivables and prepayments Plants / Hospitals Content Venture Capital (ST) Loans Equipment (X-Ray, etc) Patents Other investments Tax receivables (i.e. VAT) Computers Intellectual Property Derivatives / Financial instruments Inventory Furniture & Fittings Rights (LT) Loans Marketable securities CASH and EQUIVALENTS 16/04/2018 151
- 152. Balance Sheet: Liabilities ALiability is an obligation to make a future payment •Can be short term or long term •Can be interest bearing 16/04/2018 152
- 153. List as manyLiabilities as possible for ABC Equine Clinic • • • • • • • • • 16/04/2018 153
- 154. Liabilities/Passif: An Overview Non-CurrentLiabilities Dettes financières Current liabilities Dettes financières Off- Balance Sheet liabilities Charges à payer LT Loans with Banks Trade Payables Guarantees Other long term debts Other Account Payables Future rental and Lease payments Deferred Tax Liabilities Loans / Borrowings (< 1 year) Buy back constructions Provisions Accrued expenses LT Pension Obligations Deferred income Derivative/ Financial instruments Deferred tax liabilities Taxes (Income taxes, VAT, etc) Provisions 16/04/2018 154
- 155. Is it OKto have Debt? • In Personal Life it has often a negative side: • Can we pay the bills? • Do we owe enough when we retire? • In Business Finance: • An important part of the capital structure • External financing needed under several curcumstances: • New buisness • Heavy investments • M&A • Balance out uneven cash flow streams during the year 16/04/2018 155
- 156. Is it OKto have Debt? In Business Finance: • External Financing is in general cheaper than Equity: • Cost of lending < Return on investment • Cash rich companies can miss business opportunities: • Active in M&A • Share Buy Back • Cash Dividends • Some companies, especially Private Equity: • Highly leveraged (over 90% Liabilities) => During crisis is this KILLING 16/04/2018 156
- 157. Is it OKto have Debts? The trick is to find the right balance between Debt and Equity • Every business is different • Over the Life Cycle financing changes • Don’t sell your soul to the bank. 16/04/2018 157
- 158. Balance Sheet: The differencebetween a company’s assets and liabilities represents the shareholders’ financial stake in a company. or • Contribution by owners + • Retained earnings (net profit) 16/04/2018 158
- 159. Equity: The Claimon the Assets • Share Capital / Common stocks • Share Premium • Contribution by Owners -/- Drawings by owners • Retained earnings (profit on the income statement) 16/04/2018 159
- 160.
- 161. Income statement A financialstatement that reports a company's financial performance over a specific accounting period. Financial performance is assessed by giving a summary of how the business incurs its revenues and expenses. This results in showing the net profit or loss incurred over a specific accounting period. 16/04/2018 161
- 162. Income Statement • Lookspretty straightforward BUT: • Some fundamental choices to be made 16/04/2018 162 Revenue Costs Profit- =
- 163. The Net IncomeStatement: Revenue Revenue is the income that a business has from its normal business activities, usually from the sale of goods and services to customers. Revenue is also referred to as sales or turnover. 16/04/2018 163
- 164. Exercise 3: List therevenue sources for Veterinary Clinic ABC • • • • • • • • • 16/04/2018 164
- 165. Costs:Terminology • Cost ofGoods Sold: • Costs directly related to the production or delivery of services • Variable Costs: • Costs that can easily and accurately be traced to the item producing the revenue • Fixed Costs: • Costs that are related to producing the revenue but that cannot be easily and accurately traced to the item producing the revenue • Operating costs: • Costs that are necessary to run the business but not directly related to the revenue,services or production 16/04/2018 165
- 166. Exercise 4: List theCosts for Clinic ABC • • • • • • • • • 16/04/2018 166
- 167. Costs: An Overview Costof Goods Sold Coût des marchandises vendues Admin / Operational Costs Coût d'exploitation Pharmaceuticals Salaries Medical supplies Social charges and tax Lab fees T&E X-ray expenses Education Animal Food Rent Materials lease costs Repairs & Maintenance Waste Utilities Surgery equipment Office suppplies Kennel equipment Advertising Miscellaneous Depreciation 16/04/2018 167
- 168. Sample Practice IncomeStatement Benchmark Data Is the average of 30 equine practices in the USA in 2016. Industry Benchmarks PRACTICE 2016 100.00% Practice Income (Revenue) $ 2,500,000 Expenses 26.39% Total Cost of Professional Services $659,750 19.36% Drugs & Supplies 7.03% Hosptitalation, Lab costs, etc 73.91% Gross Profit $1,840,250 5.67% Administrative Expense $ 141,750 10.22% Facility and Equipment Costs $255,500 45.04% Payroll Costs $ 1,127,250 12.63% Operating Income (EBITDA) $ 315,750 2.79% Depreciation Costs $ 69,750 0.45% Other Income/Expenses ($ 12,500) 9.39% Net Income € 233,500
- 169. Stocks and Flows 16/04/2018169 Opening Balance Sheet Assets Fixed Current Cash Liabilities Shareholders equity Equity shares Retained earnings Closing Balance Sheet Assets Fixed Current Cash Liabilities Shareholders equity Equity shares Retained earnings Statement of Cash Flow Operating activities Investment activities Financing activities Change in Cash Income Statement Revenues Expenses Net Income Beginning of accounting period End of accounting period
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- 171.
- 172. Break-even Point • Occurswhen total revenues equal total costs • can be unit sales volume, or • can be dollar sales volume • Operating below break-even • company operates at a loss • Operating above break-even • company operates at a profit 4/16/2018 172
- 173. Break-even Analysis • Providesanswers to questions such as: • At what point in the year will your clinic reach a break-even point (and then make money after that!)? • How many procedures do I have to do in order to start making money on my investment? • What should the price of the procedure be in order to make money on an investment after x procedures? 4/16/2018 173
- 174. Variable Costs are coststhat change in total with volume but remain fixed on a per-unit basis. Thus, variable costs go up as the level of activity (volume) rises. 4/16/2018 174
- 175. What are VariableCosts Examples? 4/16/2018 175
- 176. Cost behavior inrelation to changes in activity levels Variable cost behavior 4/16/2018 176
- 177. Variable cost 4/16/2018 177 Thevariable unit costs Direct materials costs per unit € 5,00 Direct labor costs per unit 3,00 Variable overhead per unit 2,00 Total variable cost per unit € 10,00 ======
- 178. Fixed costs are coststhat do not change in total with volume but vary on a per-unit basis. However, the cost per unit does vary with output because the cost is spread over a greater or lesser number of units. 4/16/2018 178
- 179. What are FixedCosts Examples? 4/16/2018 179
- 180. Cost behavior inrelation to changes in activity levels Fixed cost behavior 4/16/2018 180
- 181. Break-even analysis Fixed cost •lease • administrative salaries • office supplies 4/16/2018 181
- 182.
- 183. Break-even point • therewhere sales meets the total costs • p x q = V x q + F p = price q = quantity of units V = variable costs per unit F = fixed costs 4/16/2018 183
- 184.
- 185. Break-even point • judgeif it makes sense given the price or • what price is needed to break-even 4/16/2018 185
- 186. Break-even formula 4/16/2018 186 Example Fixedcosts vaccination € 10.000 Variable costs vaccination € 24 Vaccination price € 80 Number of services: 80 x q = 24 x q + 10.000 Break-even number of services (q) = 178,6
- 187. And now someexercising! 4/16/2018 187
- 188. • Veterinary ClinicABC wants to introduce a new product-line by insourcing the x-ray activities currently outsourced to Company DEF. • Currently Clinic ABC pays € 32 per plate to Company DEF. And Clinic ABC charges the customer € 48. • The number of X-rays per year is 4,500. • Veterinary Clinic ABC wants to invest in this business line, as it thinks it can grow its profit by doing it themselves.
- 189. The following costswill incur when the clinic ABC invest in this product line: • Investment in X-ray machine: € 36,000 – (to be depreciated in 3 years) • Maintenance / Yearly training costs for vets and staff: € 5,000 • Additional overhead costs (more rental space, etc.): € 10,000 • Time spend by X-ray: Vet (analysis and advice): 10 minutes Assistant (taking the x-ray): 20 minutes • Hourly rates: Vet: €60 h. Assistant: € 30 h. • Other variable costs per X-ray: € 5
- 190. We want toknow: How many x-rays are needed to equal the profit generated via outsourcing?
- 191. Fixed Costs peryear: • X-ray machine: € 12,000 • Training/Maintenance: € 5,000 • Additional overheads: € 10,000 • Total fixed costs: € 27,000 Variable costs per plate: • Vet: € 10 • Assistant: € 10 • Other: € 5 • Total variable costs per plate: € 25 (48-32) * 4,500 = (48-25) * q – 27,000 q = 4.305
- 192. At what ratecan the clinic set the price for the customer to generate the same profit? Price decrease: • 4.500 * 16 = (p – 25) * 4.500 – 27.000 • P = 47
- 196. Session 5 Keeping yourCustomers, your Staff and Yourself happy
- 197. Another way oflooking at it:
- 198. Employee Engagement “Customers willnever love your company, until the employees love it first” Simon Sinek http://sloanreview.mit.edu/article/measuring-the-benefits-of-employee-engagement/
- 199. Customer Satisfaction….....Employee Satisfaction ManagingExpectations Question: 1. What were your expectations when you started to study Veterinary Medicine? 2. Have your expectations been met?
- 202. Why equine track? •Has always been riding horses. • Cure sick animals. • “Direct result of action”. • State of the art equipped clinics. • Dynamic profession. • Owners are dedicated to their horses. • Owners spend a lot of money on their horses. Loomans et al 2008
- 204.
- 206. Autonomy • The desireto direct our own lives • Time • Technique • Team • Task
- 207. Mastery • The desireto continually improve at something that matters
- 208. Purpose • The desireto do things in service of something larger than ourselves.
- 209. Purpose • Making surethat the mission and goals of the organization are properly communicated to employees. • Employees need to appreciate how their work and role fits into what the organization is about.
- 210. ABC Practice Mission Purpose= “why are we here?” “to give horse people peace of mind with the health care of their horse by helping them make informed decisions”
- 211. ABC Practice CoreValues • Take Ownership – “Own It” • Evolve – “Push It” • Deliver Excellence • Collaborate
- 213. • Problems foryoung veterinary professionals? • International research shows: • Increased risk of psychological distress and burnout amongst veterinarians • Increased risk of developing burnout amongst female and recently graduated veterinarians • Young veterinarians experience “the shock to practice” Reason for Study
- 214. 1. What isthe current state of psychological well-being of young vets? 2. What work- and person related characteristics affects psychological well-being and performance of young vets? a. positive and negative aspects of work. 3. What is the individual’s role regarding work and mental well-being? Research questions
- 215. "...a positive, fulfilling,work-related state of mind that is characterized by vigor, dedication, and absorption“ Schaufeli & Bakker (2010) Work engagement
- 216. Burnout Burnout is thefinal stage of long-term exhaustion of the body. Burnout occurs when people, despite complaints of stress and tension, persevere in their work, being unaware of the severity of their symptoms
- 217. Characteristics of burnout •Feeling physically and emotionally exhausted • Cynicism characterizing a distant and callous attitude toward one's job; the individual is de- motivated and withdraws from his/her work. • Lack of professional efficacy including feelings of inadequacy and incompetence associated with loss of self-confidence
- 218. 1. Every organizationhas its own unique work environment 2. Work environments can be characterized by job demands and job resources 3. Two simultaneous processes: a health impairment process and a motivational process Bakker, A.B., & Demerouti. (20007). The Job Demands-Resources model: State of the art. Journal of Managerial Psychology, 22, 309-328. The Job Demands – Resources Model
- 219. 4. Job resourcescan buffer the impact of job demands on strain 5. Job resources become salient and have more motivating potential when job demands are high Bakker, A.B., & Demerouti. (20007). The Job Demands-Resources model: State of the art. Journal of Managerial Psychoogy, 22, 309-328. The Job Demands – Resources Model
- 220. 6. Well-being (lowburnout, high engagement) predicts organizational performance 7. Engaged employees optimize their own work environment Bakker, A.B. (2011). An evidence-based model of work engagement. Current directions in Psychological Science, 20, 265-269. The Job Demands – Resources Model
- 221. + ++ + + - -Job demandsExhaustion In-role performance Personal resources Job resources Work engagement Extra-role performance Health impairment process Motivational process The Job Demands – Resources Model1 1Demerouti , Nachreiner, Bakker & Schaufeli, 2001; Bakker & Demerouti. 2007;
- 222. Definition of Jobdemands “ …aspects of work that require sustained physical or mental effort on the part of the employee and are thus associated with psycho-physiological costs”.
- 223. Job demands (orpotential stressors) Work-home interference Physical demands Emotional demands Workload Job insecurity Conflicts Etc.
- 224. Definition of Jobresources “work aspects that are … (a) functional to achieve occupational goals (b) necessary to deal with high job demands (c) important in their own right as stimulants of personal growth”
- 225. Job resources Control overtasks Support of colleagues Feedback on performance Rewards Possibilities for professional development Etc. Ability to use and develop skills
- 226. The individual • Personalresources are defined as developable systems of positive beliefs about one’s self and the world, that are generally linked to resilience. • This definition encompasses a feeling of being appreciated and in control as well as skills and attitudes that facilitate these feelings.
- 227. Personal resources • Self-efficacy •Optimism • Proactive behaviour • Reflective behaviour • Self-esteem
- 228. Demands and Resources The Individual Work-homeinterference Physical demands Emotional demands Workload Job insecurity Conflicts Etc. Control over tasks Support of colleagues Feedback on performance Rewards Possibilities for professional development Etc. Ability to use and develop skills
- 229. + ++ + + - Job demandsExhaustion In-role performance Personal resources Job resources Work engagement Extra-role performance Health impairment process Motivational process + + The Job Demands-Resources model1 1Demerouti , Nachreiner, Bakker & Schaufeli, 2001; Bakker & Demerouti. 2007, Mastenbroek et al., 2012
- 230. Method • Tailor-made questionnaire •1750 veterinary professionals having graduated between 1999-2009 have been invited to respond • Response rate = 49% • Question were on • Well-being • Work-related factors • Person-related factors • Demographic and occupational details
- 231. Results • 1 in7 veterinarians meet criteria for being burned out • 1 in 7 veterinarians meet criteria for being highly engaged • Men rated themselves as less exhausted and more engaged than women • Scores on exhaustion drop over the years
- 232. Results •Important job demands: •Workload • Work-home interference • Role-conflicts •Important job resources: • Autonomy- decision latitude • Skill-discretion • Variety of work • Possibilities for professional development • Support of supervisor
- 233. Results • Important Personalresources: • Self-efficacy • Proactive behaviour • Optimism • Self-esteem • Reflective behaviour
- 234. The art ofstaying engaged • Make an inventory of the job demands and job resources in your work. • Take time for a dialogue and recognize and acknowledge the differences in individual needs. • Increase or decrease job demands but always provide sufficient and appreciated job resources. • Think in terms of opportunities instead of threats. • Take time for reflection and increase your own personal resources. • Choose consciously, and take responsibility for your own well- being.
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- 236. Job Crafting “.. Changesindividuals make in their working- circumstances, their tasks and/or relationships at work with the aim to improve the person to job fit”.
- 237. Job crafting isabout: • Increasing job resources • Decreasing job demands • Or increasing job demands = searching for new challenges
- 238. From a companyperspective; • Businesses with more engaged employees have 51% higher productivity • (Harter, J.K., Schmidt, F.L., & HayesT.L., Psychology, 2002 Vol. 87, No. 2) • Highly engaged employees have less absence days when compared to employees that are less engaged • (Gallup Germany, 2011) • Organizations with engaged employees showed a 19% increase in operating income over a 12-month period, compared to a 33% decrease in companies with disengaged employees • (Towers Perrin, 2008)
- 239. Jim Collins Goodto Great • It’s who you pay, not how you pay them. • The purpose of a compensation is not to get the right behavior of the wrong people, but to get the right people on the bus in the first place and keep them.
- 241. “The Gallup 12” 1.I know what is expected of me at work 2. I have the materials and equipment I need to do my work right 3. At work, I have the opportunity to do what I do best every day 4. In the last seven days, I have received recognition or praise for doing good work 5. My supervisor, or someone at work, seems to care about me as a person 6. There is someone at work who encourages my development 7. At work, my opinions seem to count 8. The mission or purpose of my company makes me feel my job is important 9. My associates or fellow employees are committed to doing quality work 10. I have a best friend at work 11. In the last six months, someone at work has talked to me about my progress 12. This last year, I have had opportunities at work to learn and grow
- 242. The Survey • 34Questions online via SurveyMonkey • Anonymous other than job role and clinic • 5 point rating scale • Area for comments after each question [email protected]
- 243. Career Development • Iam satisfied with my opportunities for growth within the practice. • I am satisfied with the internal (in-house) job-related training the practice offers. • I am satisfied with the amount of time and money the practice invests in my CE (training courses offered by outside sources - courses, workshops, etc.)
- 244. Work Engagement • Iam inspired to meet my goals at work. • I am proud to tell people where I work. • I have a sense of ownership in the practice. • When the company succeeds, I feel like the success is my own. • I am content to spend the rest of my career at the practice. • Employees adapt quickly to difficult situations at the practice.
- 245. Compensation and Benefits •I feel that I am compensated appropriately overall (including wage/salary and bonus). • I am compensated fairly relative to similar/the same positions in similar businesses in my area. • I am confident that the method used to determine my wage or salary increases on a yearly basis is fair. • I am satisfied with my total benefits package (wage, bonus, medical and dental plans, vacation days, paid personal/sick days). • I am satisfied by the workplace flexibility offered by the practice. • My role at the practice allows me to have an appropriate work-life balance.
- 246. Relationship Management • Communicationbetween management and employees is excellent at the practice. • I am involved in the decisions that affect my work at the practice. • Management at the practice recognizes strong job performance. • My coworkers and I have an excellent working relationship. • Senior management and employees trust and respect each other at the practice.
- 247. Work Environment • Thework at this veterinary practice positively impacts clients’ lives. • I am happy with the overall culture of the practice. • I understand how our Core Values relate to expectations around my behaviour at work, and my work itself. • I feel like the management and staff of the practice adhere to the Core Values. • I understand how my work impacts the business goals of the practice.
- 248. Scoring Employee Engagement 20- 39% = Poor 40 - 59% = Good but needs attention 60 - 79% = Overall good 80 - 100% = High Employee Engagement
- 249. Oculus 2017/2018 18practices
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