So, you’ve set up a sustainable veterinary practice. You have a solid staff, vendors, a well-equipped space, and clients that are trickling in. Now, what? How do you grow the stream of clients? How do you keep the ones you have coming back?
We’ve already seen that developing the skills of emotional intelligence – see our article: Emotional Intelligence: From Surviving to Thriving – can take your practice to the next level. But what are some concrete profit drivers? As a practice leader, what policies can you enact to push your business to success? What can you do to ensure that your team is as driven as you are?
Insert profit sharing: a monetary reward system that encourages contribution to the success of the practice as a whole.
When your employees know, concretely, that the size of their paychecks are directly linked to their job performances, and to the success of the practice as a whole, their focus will shift. They will be more inclined to view themselves as important pieces of the big picture, as innovators and leaders who will think proactively about the growth of the practice.
Profit sharing is a system that monetarily rewards employees at every level for measurably contributing to the success of the practice. It might seem counterintuitive – how can you drive profit if you’re cutting into that profit by raising wages? – but its effects are demonstrable and concrete.
Profit sharing doesn’t mean you’ll be giving away the fruits of your labor and it doesn’t mean that your profit will be slowed. Rather, it partially reduces the invisible barrier between employee and owner, fostering employee identification with the practice’s success. Your employees will feel – and be – responsible for the growth of the practice.
Your receptionist gets a $100.00 bonus every time a client that she refers books an appointment. She’ll therefore be actively looking for business for you during her down time. No longer will she go home and blissfully forget the day’s work. Instead, she will recommend you to friends, and she’ll carry your card in her wallet. It will matter to her whether your practice is busy. It will no longer be “the boss’ problem.”
Athletes often are paid similarly. Your favorite starting pitcher probably gets a bonus after starting a certain number of games, or achieving a certain level strikeouts or games won. He could phone it in every week, content to collect his already substantial earnings, or he could aim to hit every goal he set in his contract.
As we will see, the benefits of profit sharing go beyond the balance sheet, although profit is undoubtedly the name of the game. The true benefit, though, is in your peace of mind. Your employees will be more vested in their jobs, more attentive to the big picture, more cohesive and less regimented.
This focused attitude will allow you to spread the pressures of being a veterinary practice owner over the shoulders of your whole staff. You’re now all in this together.
What to Consider
It’s not as simple as it is may seem, though, to set up a bonus structure that rewards hard work and big-picture thinking. Fortunately, while there may be no straightforward, cookie-cutter plan that you can adopt at your practice, there are principles that successful programs have in common.
The following are several elements of a successful profit sharing program, according to Kevin Kruse, a celebrated author and successful entrepreneur:
- Graduated: Create multiple levels of rewards, so that your staff doesn’t settle after hitting the target. The receptionist who referred a client should want to continue referring clients, so create a system that rewards initiative over complacency by installing increasingly lucrative bonuses.
- Equitable: The bonuses should be uniformly distributed across all levels of staff. Don’t give your veterinary technician reason to feel slighted by the receptionist’s bonuses. That’s not to say that the plans should be the same among all employees. Rather, they should vary across staff positions, but they should be similar in their difficulty of attainment and should scale evenly with the contributions by the employees.
- Timely: The bonuses should be predictable in frequency. If you hit your goal of ten new clients booked for the month, your staff should expect the relevant bonus in the next paycheck. Use a whiteboard to permanently track progress.
- Simple: The plan should be easy to understand and explain. If it’s too convoluted or requires too many steps to attain, your employees might tend to lose sight of it.
- Meaningful: Make the goal something that will have a demonstrable impact on the practice as a whole, and scale those rewards accordingly. Hitting a quarterly growth target, for example, should trigger a larger reward than, say, a positive online review. Not only that, but each reward should be substantial enough to keep the staff striving to reach it.
- Objective: Rely on measurable results, rather than on subjective opinions. That way, there is no room for divisive griping.
- Reinforced: Keep track of progress in a visible place – perhaps a spreadsheet emailed to staff every week or a whiteboard in the break room – to keep the rewards fresh in the minds of staff (and so there’s no question about the tally).
- Easy: The lowest levels of rewards shouldn’t be impossible to attain; rather, let these levels act as the gateway toward more significant rewards.
Another consideration is in rewarding individual goals and team goals. Every referral should trigger a bonus for the staff member who was responsible. But attaining a net profit goal should trigger a practice-wide reward.
The individual with the most referrals shouldn’t get a larger share of the net profit bonus, although the two are undoubtedly related. Instead, try a net-profit bonus that is only triggered when all employees make some minimum contribution. Lead your staff toward working together, and they will become a stronger unit.
How to Start
Implementing a profit sharing program can seem like a daunting task because changing the regular pay scale might be off-putting to some practice leaders and some staff members.
The key is to develop the plan with the input of your staff.
Transparency is the key to cultivating the sense that each employee has a stake in the success of the practice.
Have a practice-wide meeting. Everyone from the janitorial staff to the intern to the receptionist to the associate veterinarian should be invited to attend. Explain that you are restructuring the pay process to give everyone more control over their salaries. Ask them: “What are some ways you can contribute to the success of the practice — that may or may not be in your job description – that you’d like to be rewarded for?” You might be surprised to find that some on your staff may already have ideas they’ve been thinking about implementing but lacked impetus.
And, although finding a balance can be tricky, hitting the sweet spot where your staff will find themselves vested in your success can be very rewarding. Trial and error, transparency and the input of your staff are all key to the success of any successful profit sharing system, which just may be the key to developing and retaining a cohesive, driven staff. After all, the more your staff identifies with your success, the greater their drive will be to attain it.