Manage Creeping Incrementalism Out of Your Expenses

Dec 30, 2016 by Andrew Clark

Managing a veterinary business is a process of making hundreds or even thousands of decisions per year, each one of which has an impact on the cost of operating the business.  For anyone trying to do a better job of managing a veterinary business, any business for that matter, I recommend the book “The 1% Difference: Small Change-Big Impact” by Kelly Lyons.

There is a strong similarity between the philosophy of “The 1% Difference: Small Change-Big Impact” and the philosophy of www.ismypracticehealthy: brief, high impact content that provides tools to help you make your veterinary business more productive.  Small changes can make a big difference in the profitability of your practice. 

Dr Blach and I often refer to the practice's budget in our blog posts.  For goodness sake, you need to have a budget and use it.  Ok, that’s off my chest.  Every row in your budget represents an opportunity to improve the performance of your veterinary business.  It is very easy to look at a budget with dozens or hundreds of rows of data, become overwhelmed, and decide to work on it next year.  Break that habit!  Successful veterinary business managers study every row on the budget and make decisions on each that will improve the performance of the practice.  Added together, those smallish changes can make a huge difference to the bottom line, or net profit of the business.  Kelly Lyons’ book will teach you how it works. 

My objective today is to inspire you to consider managing ‘small details’ in pursuit of improved business performance. My annual summary from Delta Airlines pinged into my inbox while I was thinking about how to demonstrate the impact of a single decision on business performance. 

About five years ago, I lost 45 pounds.  Since then, I try to stay as fit as possible and control my weight.  This blog compares managing personal weight with managing expenses in your veterinary business.  Year to date, I have completed 80 flights on Delta Airlines.  On every one of those flights a flight attendant came down the aisle and gave me a package of two Biscoff cookies.  Every time, it seemed to be harmless enough decision to add 120 calories to my day.  I was amazed when I did the math!  In 2016, I consumed 9,600 calories of Biscoff cookies on airplanes.  Google tells me that a man of my size and age needs to consume 2,200 OR FEWER calories to maintain a constant weight.  The net result of 80 packages of Biscoff cookies was that I consumed 4.4 total days worth of calories by mindlessly eating cookies on airplanes.  Think about that, I would have to fast completely for 4.4 days to offset the impact of those cookies.  I am a pretty disciplined guy but there is no 4.4-day fast in my future, so I have to make it up some other way!

Lets think about your veterinary business budget.  There are dozens or hundreds of rows in the budget and each one is opportunity to ‘eat Biscoff cookies’!  If you genuinely want to improve the financial performance of your practice, you must make a decision on each row that will improve the bottom line, or net profit of your practice. 

Creeping incrementalism is a great way to look at your expenses.  Expenses never go down on their own.  Unattended, expenses always creep up.  Your job as a veterinary business manager is to manage creeping incrementalism out of your expenses. 

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