For many, it was a welcome relief to turn the calendar to 2021. The prior year was full of challenges both professionally and personally. While many practices still had a very successful year, it’s a good time to reassess your practice and consider changes you might want to make in the new year.
Here are some key items to consider.
They cover a myriad of topics from improving profitability, retaining/attracting staff, and saving money from a tax planning perspective.
- If you haven’t already, review your current situation and determine three goals or metrics you would like your practice to achieve in 2021. Develop a plan to achieve them and reassess them throughout the year.
- When was the last time you considered if your fee schedule is competitive and reflects the level of service that you are providing? Start with the top 10 services you provide and compare them to your market. If you find they are low, consider how to best get your fees up to market value.
- Many practice owners are struggling to retain and attract key staff. While your compensation package may be very competitive, making some minor changes could make the benefits that you offer even more attractive to current and future staff. Consider polling a few key members of your team to see if there are any benefits that would be meaningful to them.
- Your practice overhead could be holding your profitability down. Benchmark your practice against key industry metrics to see where your expenses might be high. Start with the most expensive items such as staff wages, drugs/inventory/supplies, laboratory, and rent. Are there areas in your practice where you could be more efficient with your spending and improve the bottom line?
- When was the last time you considered if your company-sponsored retirement plan is the right plan for you right now? A more robust 401(k)/profit-sharing plan could provide a larger tax deduction while increasing the amount stashed away for retirement. It could also provide a nice benefit to your staff at a time when retention is a challenge.
- Interest rates have been at historically low levels. It might be a good time to refinance some of your debt. Financial institutions are willing to review your practice acquisition loans, real estate debt, lines of credit, credit card debt, equipment loans, etc. and potentially provide you a refinancing package that could save you a lot of money and lock in a lower interest rate into the future. The process may also free up much needed cash flow.
- Based on your situation, consider whether it would make sense to employ your spouse and/or children in the practice. This can be a great tax planning consideration along with potentially giving them the opportunity to participate in the practice retirement plan and/or allowing them to make individual retirement plan contributions on an annual basis.
- Many practice owners start out as a sole proprietorship. Now that your practice has grown, is it the right time to make the election to become an S-corporation? Changing your entity selection could save you payroll and income taxes along with potentially reducing the risk of an IRS audit.
While 2021 is certain to provide its own unique challenges, reviewing the current state of your practice and making some key changes could make this year your best year ever. With some proactive planning now, you can achieve your goals and take your practice to the next level.
SVA’s Veterinary Consulting Services provide the industry expertise you need to run your practice. Give us a call to see how we can assist you and your practice.
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Myths and Facts About Health Insurance for Your Practice
(January 14, 2021: 1230pm - 1:30pm CST)