5 Proven Strategies to Increase Revenue and Profitability in Your Veterinary Practice

Your veterinary practice is doing well. You are achieving the balance between work and life, earning well, and, more importantly, making a difference in the lives of pets and their owners. Sounds like a dream? Right? Because it is!

The vet industry is becoming highly competitive day by day. Work-life balance seems unattainable because of all the overwhelming paperwork, recruiting, and diagnostics operations. You might be thinking: Is my clinic doing enough to stay ahead and maximize profitability? 

That’s where strategy comes in. Profitability is not just about cutting costs or increasing prices. It is about making intelligent and informed decisions that optimize your operations, improve efficiency, and enhance the client experience. There are many simple things, like offering remote consultations to adding day boarding, that can have a positive impact on your revenue. 

Today, we will discuss the five strategies that can help you increase your veterinary practice’s revenue.

Understand the Financials

Have you ever considered how some vet practices are booming while others struggle to get even one appointment? It all comes down to managing your bottom line and how much profit your clinic keeps after covering all expenses. 

Did you know? A successful veterinarian practice’s bottom-line profitability is estimated at 14-18% net profit margin from earned revenue. In other words, your clinic should earn between 140,000 and 180,000 in profit annually if it generates one million in revenue.

Here’s how to improve:

• Analyse Your Financial Statements – You should be familiar with three main parts: revenue (top line), overhead (midline), and bottom-line profitability. Revenue is primarily made up of patient services but may include other sources of revenue such as online product sales or income from renting space to professionals.
  
• Revise High-Cost Areas – Overhead refers to the cost of running the practice regardless of how much it is producing. Examples include rent, insurance, salaries, and utility bills.

As we have previously discussed, the bottom line is the owner’s compensation, or what the owners are getting out of the veterinary practice clinic, which can be used toward personal and clinical investment. More sales don’t always mean more profit. What matters is what you keep after the expenses. A veterinary practice that prioritizes its bottom line concentrates on cutting its costs and maximizing its earnings.

If your practice isn’t hitting these numbers, it is time to sit down with your team and discuss a plan to increase revenue. Along with that, take a look at your financial statements from the past few years. Review the revenue trends and identify which services are driving profits and which aren’t impacting much.

Reduce Overhead and Maintain the Quality 

How can you marginalize expenses and expand your profit margin? You better watch your overhead costs, as they might be silently eating your revenue. Here’s how you can do that!

• Medical Supplies & Inventory -Inventory items such as supplies, drugs, prescriptions, and microchips. To a large extent, the cost of these items is in the hands of the seller. However, you can take back (some of) the control by utilizing rebate offers and building strong relationships with the vendors.
  
• Outsource Non-Essential Tasks – Are tasks like bookkeeping, payroll, and office maintenance taking time away from seeing your patients? If so, think of outsourcing them. The more time you have to work on generating output, the bigger your revenue!

• Bargain Lab Rates – Lab fees take up a lot of room in your veterinary clinic’s overhead. Consider shopping for lower rates or internally processing anything you can.
  
• Negotiate Rent – Several rental agreements are based on a year-by-year multiplier that increases over time. Reexamine your agreement to avoid significant future expenses stipulated by the contract.

Track KPIs to Increase the Profitability and Revenue of Your Veterinary Clinic

If you are serious about increasing profit for your practice, you need to track KPIs. Key Performance Indicators KPIs) are quantifiable indicators of progress toward a specific goal.

• Where’s Your Money Coming From—Knowing where your money comes from (and goes to) is crucial to the successful financial management of your veterinary practice. Understand everything regarding write-offs and discounts to track what you are giving away and whether you are giving away too much. 
  
• Production by Provider –  Providers are typically compensated according to their productivity. Frequently, that represents 20-22% of their gross overall output. Tracking this KPI can cut down on costs considerably. Monitor your staff’s data input procedure to confirm accuracy and review regularly for inconsistencies.
  
• Are You Maximizing Revenue?

Your total sales and the average amount customers spend can give you a clear picture of your practice’s financial health. If you have a lot of sales but your total revenue is low, you might be offering too many discounts or missing opportunities to upsell.

For example, consider offering annual grooming packages or wellness plans for pet owners instead of just selling one-time services. This way, customers spend more per visit, and you generate steady long-term income. Small changes like these can help you increase earnings without needing more customers just by making the most of the ones you already have.

• Active Clients vs New Clients

Bringing in new customers is essential, but keeping your existing ones is just as crucial. New clients are those who visit for the first time, while active clients are the ones who keep coming back and spending money at your clinic. Keeping them engaged helps your business grow and saves money because finding new customers costs more than keeping the ones you already have. Focus on keeping them happy so they return again and again.

Expanding Your Veterinary Practice

Beyond the financial aspects are expansion opportunities. Here’s how growth-minded veterinarians use them to increase revenue and profitability.

• Offer Remote Consultations

Animals may not be the best telehealth patients, but with their owner’s help, remote consultations can still be helpful. You can provide advice on behavior issues, do follow-up check-ins, and guide pet owners on nutrition. This makes it easier for clients to get expert advice without always needing an in-person visit.

• Pet Boarding and Daycare – If you have extra space in your pet clinic, start taking reservations! Many pet owners travel frequently. What better way to set their minds at ease than knowing their pets are regularly groomed, correctly socialized, mentally stimulated, and well-trained?
  
• Make Your Services Mobile – Take the show on the road by offering a mobile veterinary practice to reach clients facing transportation challenges. Consider offering vaccinations, bloodwork, routine check-ups, minor surgeries, treatment for sick animals, euthanasia services, and parasite management.
  
• Staff Development in Your Pet Clinic – A knowledgeable and satisfied staff creates informed and happy clients, significantly boosting your clinic’s profitability and revenue. Providing ongoing education helps your team sharpen their skills, expand their knowledge, and improve job satisfaction.
  
• Expand the Hours of Veterinary Practice – While we’re on the subject of expansion, why not think about expanding your hours? Ask staff members if they are willing to work additional hours to accommodate a more extensive clientele.
  
• First Impression Matters – Aesthetics go a long way toward improving customer experience. Consider creating a comfortable lobby with soothing music, fresh water, and pet magazines.
  

In one of our webinars, a few practice owners shared that they had added extra facilities to their clinics, like a pet grooming center or day boarding, but were struggling to upsell them to existing clients. When we reviewed their clinic’s digital marketing, we were surprised to see they had little to no online engagement. Their Google Business Profile wasn’t updated, there were no recent reviews, and their social media presence was inactive.

We gave them simple suggestions. It is great to add new services, but you also need to ensure that you are consistently attracting new clients. Something as basic as keeping your Google My Business profile updated can make a huge difference. Pet owners in your area are searching for services online. If your clinic isn’t showing up to them, it doesn’t exist.

Fast forward to today, and just last week, they shared that regularly collecting reviews has helped them bring in more walk-ins, and as a result, they are seeing a boost in revenue.  The goal of this example? You need to ensure that, along with adding new services, you have a clear plan of action to drive new clients into your clinic. 

Embrace the Digital Age

Digital technology comes in handy both in and out of the examination room. Keep human and animal customer satisfaction at its highest level by employing online booking services, installing veterinary practice management software, and investing in enhanced diagnostic tools.

• Online Booking = More Appointments – Online booking reaps many rewards, such as increased customer convenience (customers can book appointments 24/7),  reduced phone wait times, and availability updates. Use Vetsoria for improved staff efficiency, fewer scheduling errors, and the capacity to send automated reminders to reduce no-shows.
  
• Veterinary Practice Management Software – From online cueing to virtual waiting rooms to online intake forms to accessing reports and analytics on demand, vets can disburden themselves from time-consuming administrative tasks and evaluate crucial performance metrics. Many practice management tools like ezyVet help you streamline all operations effortlessly!
  
• Enhanced Diagnostic Tools –  Imaging technologies and MRIs can provide insight in more ways than one. Not only do such technologies take more accurate pictures than previous tools, but they also enable veterinarians to make accurate and faster diagnoses.

Conclusion

Running a veterinary practice is about taking care of day-to-day operations and ensuring that practice owners stay profitable and maintain a consistent flow of new clients in their clinics. With the key strategies we discussed today, now is the time to start implementing them, and we are sure that you will see great results. Here’s a checklist for you:

• Keep your eye on your bottom line.
• Examine your overhead for cutback opportunities. 
• Analyze your KPIs to track progress and identify opportunities for improvement. 
• Think about expanding your veterinary services to generate more income.
• Invest in the latest digital technologies for optimal efficiency and customer satisfaction. 

Making your practice more profitable is crucial not only while running it but also if you ever plan to retire or sell your clinic. The financial health of your practice will play a significant role. Buyers will carefully examine your revenue, expenses, and overall growth before making an offer.

They do not just check where your clinic stands today. They want to see if your practice has grown steadily over the years and if you have managed your expenses wisely. Buyers may lose interest or offer you less money than you expect if your profits are inconsistent or your costs are too high. A well-managed, profitable clinic will always be more attractive to potential buyers.

Want to ensure your clinic is as profitable and valuable as possible? Whether you are looking to grow or preparing for a sale. Transitions Elite has helped multiple veterinary practice owners maximize their success.