Profit margins

Abstract

The veterinary industry has perpetually produced excellent practitioners who have often ended up in business manage­ment positions through natural succession. These owners are in highly influential leadership positions through necessity, not passion or skill, which ends up with important factors of practice being an afterthought of practicing medicine. Profit margins within the veterinary practice must be thoroughly understood in order for practice administrators to effectively implement pricing structures and help associates and staff members understand where pricing structures come from to communicate effectively with clients. Understanding terminol­ogy and calculations required to audit one’s numbers can help restructure focus and pricing. Understanding profit margins also helps understand the effect of inventory shrinkage most commonly due to obsolescence among other sources. Having the ability to calculate these numbers for one’s practice gives the ability to make systematic changes to improve one’s practice.