A well-constructed financial foundation is crucial for your practice to thrive. In this quick guide, we bring together essential financial insights and top tips – from choosing an accountant to cash flow management and profitability enhancement – to help you navigate the initial stages of establishing your practice successfully.
Choosing an accountant
Selecting an accountant who you can trust is pivotal for your practice’s financial health. An accountant will not only manage your finances and tax affairs, but their expertise can also help you to steer clear of common financial pitfalls.
Top tip – look for recommendations from other similar-sized businesses or friends and interview at least three accountants before making your final choice.
Learning about accounts
Understanding accountancy is fundamental for managing a successful veterinary practice. It ensures that you can manage taxes and optimise cash flow. It also allows you to make informed decisions, assess the financial viability of new undertakings, and identify areas for cost-saving and efficiency, ultimately, helping you to grow your practice and improve profitability.
Top tip – many local business enterprise agencies have courses available for start-ups that are completely free. Topics include bookkeeping, marketing, business planning and more. There are even courses on how to access funding through loans or grants.
Cashflow management
Effective cash flow management is the backbone of a thriving veterinary practice, particularly for startups facing high initial expenditures. It involves the careful planning and monitoring of incoming and outgoing funds to ensure that your practice always has sufficient liquidity to meet its obligations. Delays in cash flow can impact your ability to pay suppliers, staff, and other essential expenses, which can in turn affect the quality of services you provide.
Top tip – reports on online accountancy systems and your accountant can help you to manage cash flow.
Boosting profitability
As a rule of thumb vet practices will make a profit margin of around 20% – in other words only a fifth of what comes in is profit. To boost profitability, adopt strategies such as increasing the client base, enhancing income from existing clients and reducing client attrition as well as optimising operational efficiency.
Top tip – there is a higher cost involved in acquiring new clients, so generating more income from existing clients and reducing client attrition can often be a more successful strategy.
Read more….
For more comprehensive information and to ensure you cover all aspects necessary for a successful launch, we invite you to read our Modern Veterinarian’s Guide to Opening a New Practice. An invaluable tool crafted by industry experts, it provides you with essential insights, best practices, and practical tips to ensure your success.
