Bottom Lines Bulge With New Profit Solver
10 years ago 
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Zoetis Business Consulting has launched a new service - Profit Solver - designed to significantly boost practice profits in just 12 months. The evidence based software tool is being rolled out from the US where it delivered an average of £103,000 extra profit to veterinary practices within a year.
Profit Solver uses the practice's actual data - not benchmarks or accepted norms - to enable the practice to manage costs, set prices and gain return on investments. By using an activity based costing model and utilising a variety of data such as practice costs, which staff perform which part of the procedure, how long the procedure takes and what equipment and materials are used, Profit Solver calculates the correct pricing to both cover costs and deliver a predetermined profit margin.
Profit Solver helps practices to understand how the overall practice profit is being generated. For instance, for price sensitive procedures such as vaccination, the practice can match their prices with the competition, but maintain their profit margin by increasing the price for other clinical services.
Nick Steele, national consulting manager at Zoetis explains: "Veterinary practices have no standard method for pricing their services and they are often unable to determine which services make money and which don't. This hampers the practice's ability to accurately value the business and, as a result, profit levels tend to be low for many practices. Profit Solver can turn this situation around and already has a very successful track record in the US."
Zoetis piloted the UK version of Profit Solver with John Goulding at St Georges Veterinary Group and John describes the new tool as a complete game changer: "By and large the veterinary profession still relies ont he mark-up of medicines where profits are concerned. Even practices that have made a concerted effort to move away from this type of pricing structure are still making their money from the sale of medicines rather than from vets' fees. For years I have wanted to know exactly how to price our services and htis new Profit Solver software does just that.
"Most costs have an element of staff time, an element of fixed assets or equipment and an element of disposable items. Profit Solver takes all of these into account, adds the predetermined profit margin and produces an accurate pricing structure for each procedure undertaken within the practice.
"It's important to take the time at the start to put accurate data in from the practice's latest set of accounts and the Zoetis business consultant will guide practices through this to make the initial set up as easy as possible. For instance, for major pieces of equipment such as X-ray machines, you have to work out how many times a year you are likely to use them.
"By using Profit Solver, we worked out that if we do exactly the same amount of work as last year we can increase out bottom line by at least £200,000 for our 18 vet practice. Since last November, when we installed Profit Solver, we have completely changed our pricing structure moving away from focusing on medicines and the size of the animal to rethink how we charge our clinical care.
"An unexpected benefit is that Profit Solver has made me more confident about the prices we charge to clients as it is all broken down, so we can see exactly how the invoice is made up. I would be at loss without it now."
A number of vet practices have already signed up for Profit Solver and are working with the team of Zoetis business consultants to increase their practice's profits. For more information, contact your Zoetis account manager.
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