Your Piece Of The Pie

Posted: September 13, 2010, 2:15 p.m.



Tennessee, unusual business model I spent last week in Tennessee visiting practices. I was introduced to a somewhat unusual business model that I thought was interesting. The employees were paid directly from the “pot” of money that the business brought in over the last pay period. Now that sounds pretty ordinary, every business brings in money and then distributes to their employees a portion, but this practice literally added up the revenue and then split it based on percentage each and every pay period.I spent last week in Tennessee visiting practices. I was introduced to a somewhat unusual business model that I thought was interesting. The employees were paid directly from the “pot” of money that the business brought in over the last pay period. Now that sounds pretty ordinary, every business brings in money and then distributes to their employees a portion, but this practice literally added up the revenue and then split it based on percentage each and every pay period.staff-safari Your Piece of the PieI spent last week in Tennessee visiting practices. I was introduced to a somewhat unusual business model that I thought was interesting. The employees were paid directly from the “pot” of money that the business brought in over the last pay period. Now that sounds pretty ordinary, every business brings in money and then distributes to their employees a portion, but this practice literally added up the revenue and then split it based on percentage each and every pay period.

So what makes this unusual? Let’s compare. When a practice sets a budget, they predict the revenue for the next year, and then determine what percent that should spend on payroll, what percent on inventory, what percent on marketing, etc. Your hourly wage or salary is based on that prediction. If the practice brings in less than they predicted, your wage, hours, or even position could be at jeopardy because the “pie” is much smaller than the practice owner expected…therefore, your “slice” must be trimmed or even eliminated in severe circumstances. If the practice brings in more revenue than they predicted, then hopefully that extra part of the pie is spent on bonuses for staff, new equipment, improvements to the facility, and so forth.

The concept that seems so difficult for veterinary professionals to understand, particularly support staff, is that the only way they can increase their own slice of the pie is to help the practice create a bigger pie over time! Everything you do will relate to the financial success of the business. If you misuse supplies, waste medications, forget charges or don’t deliver good client service so families will return to the practice, then you must expect the pie to be smaller. Yet you can also do the opposite: be frugal with supplies, ensure that medications are used according to protocol, capture all the charges and deliver excellent client service and the pie will be bigger…therefore your slice will be larger!

Even though every business functions with this type of theory in place, this business model in Tennessee is unique because it literally calculates the size of the pie and therefore the size of all the slices as each pay period rolls around. What is most interesting is the effect that this produces on the team. They realize that their contributions directly affect this pie’s size. They “weed out” nonproductive team members because for example, if the support team knows they all share a 20% slice of the pie, then they won’t allow anyone to just coast and get their slice without pitching in to grow this pie. I imagine that there is also a sense of personal responsibility as well, because it’s not “my boss” giving me a large or small pay check, but instead it is ME earning that slice!

In essence every one of our practices operates under this type of financial concept, but it may not be as obvious in your facility. Always remember that the only way you can earn more money for yourself is if you help the practice create a bigger pie. Would anyone like a scoop of ice cream with their slice?

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