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2010 Practice Performance
The following update is from the
National Commission on Veterinary Economic Issues (NCVEI). The
statistics are from the data collected on the NCVEI's website,
www.ncvei.org.
2010 Looks a Little Better
NCVEI asked practices: How Did Your
Practice’s Revenue for 2010 Compare to 2009?
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Qtr 1 |
Qtr 2 |
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• 2010 increased > 5%
• 2010 increased 1 - 5%
• 2010 was essentially flat
• 2010 declined 1 - 5%
• 2010 declined > 5% |
26.6 %
28.2 %
12.2 %
20.8 %
12.2% |
26.83%
26.02%
12.2%
21.14%
13.82% |
Over 50% of practices are seeing revenue growth this year with
another 12% showing no growth but no decline. (Remember that
flat is the new up……) That still leaves about 33-35% of
practices struggling with revenue declines.
This month we’re asking about numbers of visits to your
practice—go to www.ncvei.org and let us know how your practice
is doing.
How Profitable are You?
Results from the NCVEI/VetPartners Profitability Estimator
indicate the average practice has a profit margin of 9.76% with
the median being slightly higher at 10.23%. To put this into
perspective, a practice needs to have a profit margin of 18% or
higher to sell at the gold standard of 100% of gross revenue.
(Don’t forget that profitability isn’t the only factor impacting
value but it is a very significant component.) Here is the
breakdown showing the % of practices at each level of
profitability:
• >18% (Superior profit margin) 12.27%
• 16-18% (Above average profit margin) 10.91%
• 13-15.99% (Average profit margin) 12.73%
• 8-12.99% (Below average profit margin) 25.45%
• < 8% (Poor profit margin) 38.64%
If you’re not sure how your practice is doing, take this
opportunity to enter your data in the Profitability Estimator
and find out. If you don’t like the results, check out the rest
of the NCVEI benchmarking tools to help understand why you’re
not as profitable as you’d want. Is it because your doctors
aren’t as productive as others? Because you don’t have as many
new clients? Or something else?
2010 Fee Increases
Deciding how much to raise fees during a tough economic time is
a challenge; here is what your colleagues are doing this year:
• Not raising fees 18.1%
• Lowered fees 1.4 %
• Raised fees on average from 1-4% 45.8 %
• Raised fees on average from 5-8% 29.2%
• Raised fees on average from 9-12% 4.2%
• Raised fees on average greater than 12% 1.4%
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