We hope you’re been with us as we’ve walked through these eight ways to “stay from behind the 8 ball” in your practice’s financial matters. This week we’re on #7: Reduce Your Expenses.
Payroll is your biggest single expense. To give you some perspective, you may want to join a trade association or professional group that will give you access to data related to your competition or other comparable businesses.
When evaluating, be sure to include your management salary and any owner’s commission. You may also include individuals who are paid with the 1099 form.
Beyond payroll, your Profit and Loss statement will tell you which expenses are small, like utilities, and which might be worth shopping for cost.
One way to reduce your expenses is to review your distributors. Some believe that you should work with one vendor for at least 80% of your stock once you have determined where you get the best service, value and price. Others urge you not get trapped into using only one or two but to shop for price. However, remember to be realistic and not waste time shopping just to save 15 cents.
For more information, you may wish to read our entire article. It is based on the veterinary practice, but the general principles are applicable for all businesses. For more details and more of our eight tips on good financial management, seek out our article in the August TRENDS magazine, published by the American Animal Hospital Association. It’s entitled, “Financial Efficiency. 8 Ways to Keep Your From Being Behind the 8-Ball.”
Signing off for today….
Carolyn and John
Watch for our next post, in which we’ll discuss the eighth aspect of financial management.
Meanwhile, leave us your comments.
“Like” us on Facebook,
And sign up for blog updates on our HOME page.