Has your practice seen significant growth over the past few years? Do you have less time to see patients due to your growing list of business tasks? Are you working full time as a veterinarian and another 20+ hours each week keeping up with payroll, staff needs and other management duties?
If you answered “yes” to one or more of these questions, it might be time to hire a practice manager. Here are three steps to getting the ball rolling.
1. Decide what type of manager you need. First create a job description with duties and responsibilities. Or simply write down everything you want to stop doing.
2. Determine the experience level. Will you have time to train and develop someone with little to no experience, but who has potential? If you do, consider promoting someone from within your organization to an office manager role, maintaining the bulk of financial and employee management duties for yourself. Or, do you need someone who can hit the ground running, taking over the bulk of your management and human resources duties? If so, you will benefit more from hiring an experienced practice manager.
3. Can you afford a manager? The typical benchmark for practice management compensation is in the range of 3.5% to 5% of your practice’s annual gross revenue. This includes paying yourself as the owner for any management duties you retain. Let’s look at two examples:
Example #1: If you have a practice generating $1,000,000 in annual revenue, then your management budget would be $35,000 to $50,000. If you spend 10 hours a week on select management duties and oversight, then you should pay yourself out of this budget in addition to your pay as a veterinarian. If you decide that you will pay yourself an additional $10,000, then you have $25,000 to $40,000 remaining in your budget to pay your manager. This budget would be appropriate for a part-time office manager (on the low end of the range) to a full-time office manager (on the high end of the range).
Example #2: If your practice generates $2,500,000 in annual revenue, then your management budget would be $87,500 to $125,000. In this size of a practice, you may need a practice manager who also delegates and oversees inventory management or other responsibilities to key members of your staff.
Anyone who spends time off the floor performing management duties should be factored into this total budget.
- Owner @ 10 hours/week management duties = $25,000
- Head technician @ 10 hours/week inventory duties @ $15.00/hour = $7,800 annually
- Remaining appropriate budget left for a practice manager = $54,700 to $92,200 annually
Take stock of your current situation and decide if it’s time for a manager. Hire the right kind of manager, stick to a budget, and then watch your practice grow to new levels.