Building a High-Value Veterinary Practice: Communication, Diagnostics, Profitability, and Preparing for the Future

The reality of modern veterinary market is that being busy is no

longer a guarantee of being profitable.

In fact, for many owners, high volume is actually

masking a slow motion collapse of their

margins.

Welcome back to the Veterinary Business Podcast. I'm your host, Don Adeesha.

It's great to have you here.

Now, to help us move beyond the busy trap and build a

hospital that is truly a transferable asset,

we're joined by none other than Dr. Tina Neal.

Dr. Neal is the founder of Neal Veterinary Hospital and the

CEO of Angimal Inc. Now, she has

spent 40 years proving that you don't have to choose between

being a great doctor and being a wealthy business owner.

She has successfully mastered both of those at the highest

level. Now, today we are discussing sustainable profitability.

We're going to talk about high-level communication, and of course, how to build

that transferable practice value.

This episode is brought to you by Ekwa Marketing, our platinum sponsor.

Ekwa helps veterinary practices attract high-value clients through

strategic, data-driven digital marketing, ensuring your

online presence matches the quality of care you provide in the clinic.

With that being said, Dr. Neal, welcome to the podcast.

Oh, thank you for having me. It's one of my favorite subjects.

So Dr. Neal, you've spent decades in veterinary

medicine as a clinician, as a hospital founder,

entrepreneur,

and more recently, a biotech leader.

What do you believe separates a veterinary practice that simply stays busy

from one that becomes truly valuable?

Well, I think that

what separates it is

paying attention to

the

culture, the communication, and

being able to educate yourself somewhat into business.

And

I have some odd theories about things

for some people, but I think communication

is the biggest situation, and you have to

understand your market, the veterinary

practices, and what

people are looking for in a veterinary hospital.

And it doesn't mean that you have to be the busiest

practice in the world. You have to

practice quality medicine, but you also have to be able to

communicate to your clients

well so that they become

constant clients, and

you can repeat this. And at the point

you want to

leave practice, that you have something that's

saleable and marketable and valuable to other

people.

Now, you mentioned what people are looking for in

veterinary market. Can you tell us

what people are actually looking for in a veterinary practice when they're

coming in as patients, and what are we getting so wrong?

Well, I think

we actually, in our practice in Prosper, Texas,

we had a survey done of actual

people in the area,

and the doctor's qualifications, as

in degrees and things like that, was way down on the list.

The high thing on the list was

the ability to get the care on the hours

that they needed it,

and it was the communication skills of

the doctor, where they felt heard and

understood, and they felt that they were

caring.

They can't really tell how good a doctor you are

as far as your technical skills, but they can certainly

tell how empathetic you are and

how willing you are to listen to them.

Wow, that's eye-opening right there.

The credentials being a bit lower on the lists-

It was-

... compared.

But still-

It was like 10th out of 10.

It was-

Oh, wow

... yeah, it was way down the list, ninth or 10th.

But I appreciate that they really appreciated the outcome-

Yes

... and how they got to the outcome. That's what I'm understanding, right?

Yes.

Yeah, and how they were taken through, okay, now Fluffy's

in good condition. The communication that was done.

Now, communication is one of your major focus

areas.

Yes.

Where do you see veterinary teams struggle most when communicating with pet

owners, and how does that affect compliance, trust, and of

course, patient outcomes?

It's highly important, and

my

mantra has always been that I

think that the clients want to have me help

them get their pet to live a long and healthy life, as pain-free and

comfortably as possible,

and that's my job. And if I cannot

communicate how cleaning their teeth here

is going to result

in them not having heart murmurs develop, or in

cats, kidney problems develop, or it's less likely to,

then I do the dog a disservice and the cat a

disservice, which is a disservice then to their pet

parents And it's a big disservice

to the veterinary profession in general.

Mm-hmm.

So if you cannot communicate and have

them understand, then you've failed.

You've failed that pet, you've failed their parents, and

you've failed yourself and the veterinary

profession.

Mm-hmm.

So it's until they tell me they want to take their dog out and

shoot it, I assume that I am supposed to

help them get to that point. And that's not always about doing

a surgery or doing a dental. It's explaining to the

clients how you're going to get from here to there,

and your pet is going to live a long and healthy life as long as

we can keep it pain-free and comfortable.

Mm-hmm.

So

every time, when I was in my

Neal Vet practice and we did GP, specialty,

and ER,

every time I saw a dog that had been our patient for numerous

years come in at seven with a pyometra,

I felt like I knew we had failed.

Mm-hmm.

That is a failure of communication because we

did not explain to the client well enough

why spaying their dog was going to

eliminate this

problem, which is going to cost way more anyway and

possibly result in the pet's death.

So

that's how I've always looked at it, and I do

not want to be

failing at taking care of my pets, my clients'

pets. So-

Mm-hmm

... it's a very passionate thing for me

that-

Right

... they understand, and they-- In fact, I write

pet parent newsletters to get things out to people that

I know they're not getting on a day-to-day basis because the

hospital's busy, and you don't have time to get everything done,

then that's a problem. And that's

another example of why a really busy practice, if

you're just

going and going and going, that you've got to make sure that you

have time to communicate properly with the client, or

nobody's going to win in that situation.

Mm.

Particularly not

the pet.

Right. So

in this sort of heart-centered communication, how does

that coexist with a high-efficiency business model?

How can we balance those two things out?

Well, you need-- I teach a communication class.

It's six weeks long, a

subject each week,

of different areas of practice. And I

teach how you get the owners to see that

you're here and it's going to end up there, and that's the outcome that

they want. And so you

need to practice that.

Mm-hmm.

And worse, more than that, you have to believe it.

If you believe that, for example, cleaning their

teeth is going to help them not develop congestive

heart failure when they're older because they have mitral valve

disease, then it's pretty easy to tell them, and

it's pretty easy for the client to notice that

you fully believe it.

Mm-hmm.

So it doesn't take long hours of talking to them.

And some people, you've got to say it several times,

several visits and whatnot, but it's a

really important thing for you as the

doctor to believe it. And if you believe it, you should be able to

convey that belief.

Mm-hmm.

And it doesn't take as long. Also, your

staff needs to believe in it, too.

Mm-hmm.

Because your staff,

sometimes the clients feel better about talking to the staff

or asking their opinions, and you don't want your opinions to be

at polar opposites of what your staff is.

So they can

bring up these subjects, and so that when you are talking to them about it,

then they've already been--

Somebody has told them about it,

so-

Mm

... it's not a foreign thing to them.

Check. Now, Dr. Neal, ultrasound

can be a powerful diagnostic tool in veterinary

practice.

Mm-hmm.

How can practices use services like ultrasound more strategically

to improve care while also supporting profitability?

I got my first ultrasound in

March of 2000. So I've had an

ultrasound for 26 years. I've had,

in that 26 years, about every three years, I get a new one,

because that's my-- Some people buy new cars, I buy new

ultrasounds. But

because I get a lot of use out of it, and I enjoy it.

And it's so much different now than when I had a brand-new

$3,000 analog

ultrasound machine. And I look back on the images from that, and I think, "Oh

my gosh, it's amazing we found anything."

But what's really important

is

if you are going to practice good medicine, then you

need to use the diagnostics that tell you a

lot. And if you're going to tell me, "I'm going to X-ray for

a foreign body," or, "I'm going to do an ultrasound," and I have to pick between

the two, it'll always be an ultrasound

Because unless on the X-ray you see a bone

or a piece of metal, you can't tell for sure there's a foreign

body. And you can line up all the radiology specialists and they'll

tell you

that they think it is, but they can't tell.

And on an ultrasound, you can almost always see it for sure.

So,

that's real important. Another thing, it's a money

generator.

Mm-hmm.

But it's generating money in

well-placed

areas, because I have a rule that

nobody starts treating a diabetic other than for

emergency care without doing an abdominal ultrasound.

Mm-hmm.

Because about half the time, in

my experience, diabetics are that way because they

have Cushing's disease or they have pancreatitis.

And if you don't address those two, you'll never regulate that dog

right. So what happens if you don't do that?

Say they're going to spend

$500 on an abdominal ultrasound, and they say, "I don't want to do that."

I explain to them, this is what happens when you don't do that, and

there's an underlying cause, is that that

pet is not going to regulate out. So you're going to be giving

injections, changing things all the time.

The pet's not going to be right. It's going to still be drinking and

urinating. It's going to feel bad.

It's going to get worse. And 6 or 12 weeks down the road,

somebody wakes up and says, "Hmm, maybe I better check and see if

there's something else going on because I haven't been able to regulate this pet."

Well, in

my opinion, you should have done that ultrasound to start with.

And-

Mm-hmm

... if you do the ultrasound and

everything's okay, then

yes, they spent $500 maybe they could have skipped.

But-

Mm-hmm

... if you don't do that, and you can look at different

breeds of animals that you know have a high

propensity for Cushing's.

But there's all kinds of dogs that have pancreatitis.

And if you don't get that figured out,

those dogs are suffering. And to the pet parents,

they are suffering. And they are suffering because they're

upset and dealing with constantly coming in, and they're going to spend

more money because they-

Mm-hmm

... have to keep coming in and getting

glucose curves, or they have to hospitalize them and that sort

of thing. So to me, it's a no-brainer to

do an ultrasound on a diabetic. And

it's just

a wonderful tool.

Hmm. It's a wonderful tool. And like you said,

it can really help

frame things in the correct perspective.

If you weren't getting this $500 ultrasound

here-

Mm-hmm

... just along the line,

your pet's going to get their condition worsened, and then

you're going to have to do even more medical treatments that are going to

cost you a lot more. And-

That's exactly true. And as important as

money is to people, their pet suffering is-

That's right

... hugely important to them. And,

so,

I always say,

puppies and kittens, they grow up,

but they don't grow up to be nasty teenagers like your

two-legged babies are, and you want them to leave home for a while .

And so,

you have to take care of them, and you as the pet parent have to

make the right decision. But you've got to have some good

veterinary support to be able to make those decisions

correctly.

That's right. So it's the veterinarian's job to

really help the pet owners understand the

right decision and

what that looks like. Check.

We're going to take a pause here.

Now, that point about profitability is really important

because strong veterinary hospitals are not built on clinical care

alone. It also depends on how clearly pet owners

understand your value before they ever walk through the door.

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Let's get back to our conversation now.

Dr. Neal, many veterinary owners are excellent doctors,

excellent But they struggle with the business side of

running a hospital. Now, what are the key areas they need to understand if

they want to build a more profitable and sustainable practice?

Well, they really need to know their numbers.

Where

is the money going? And they need to understand that you've

got fixed expenses,

and you've got to get those covered.

As long as you have your door open, you're going to have your

electric bill, your

rent payment or your mortgage payment.

You're going to have

your insurance payments.

You're going to have your ongoing expenses.

And

so

for a long time,

I spent

probably 11 years, the last 11 years of my

original large practice

in VMG, Veterinary Management Groups, and

I think that you can get a lot of information from your

accountant. You can get a lot of information from joining

groups like VMG,

and they help teach you how to look at

your books and see where your money is actually

going.

Mm-hmm.

And

fortunately, my husband had a finance degree and-

Mm

... and we

started our

main practice as a house call practice years ago and

then morphed it into the big hospital.

And he did a lot of that work, where I

focused more on technology and veterinary

medicine. So I had a kind of a secret weapon in my

husband. But

as practice owners, you can learn

how your money is being spent and are

you spending it in the right place.

In other words, can you get better deals on your

drugs that you're using and selling?

Mm.

Are you paying out enough for, and

not too much, for your doctors and your staff?

I always paid doctors and staff

larger amounts than

what

was average-

Mm-hmm

... but I felt like as long as they were

the great staff that I wanted them to be, then they deserved

a good standard of living. And

we would make up funds from what

we paid to the drug distributors

and things like that. And

you have to realize that after you get through those first

expenses and those are all paid for,

then everything that you make after that

is much more profitable. It's probably

80% profit because you've already paid all that

overhead and you've paid your staff, but now

you've already covered the payments

for all the fixed expenses.

So

growing is very helpful

to make them more profitable. And I

always said, I didn't really worry about the bottom line a

lot. If I had good

communication skills, I worked up my cases

well, and the only way you can work up your cases well is to be able to

communicate why that's necessary to the

clients. And so you communicate with them,

you practice great medicine, you charge for what you do, and you

collect. In the end, it'll work out.

But there's just things you have to pay

attention to, and

if you communicate that, you will have people doing more things

that are better for the pet. It will make you

more known. You'll get more referrals and things like that.

Mm-hmm.

And that's all very

helpful

to building that practice. But it's

amazing how many

practices have theft

in their practice from their staff, and you have to know these

things can exist, and you have to set up

systems and processes to

keep that from happening.

And

you have to--

My husband used to say, "Well, you need to have a rule for everything." And I'd

say, "Well, it kind of depends. It depends on what's happening."

But he's right. You really need a set of,

for the average and

most of the things you're going to see, you need to have a process

set up and systems and how it should be taken care of

so things don't fall through the cracks.

Check.

A lot of great things

there. I'm just thinking you should have a really great husband should be the

first part of that, and if they're...

Yeah. You find a good husband.

That's true.

It took me two tries, but I found one.

So we've been together will be 40 years this

summer. Mm-hmm.

Oh, that's great. That's

another achievement. Congratulations, Dr. Neal.

Thank you.

Now,

I'm just curious, just

a quick follow-up on that previous question there.

Now, in this era of absolutely

massive labor costs rising-

Mm-hmm

... and what is perhaps the one business metric that

owners should ignore, and one they should

obsess over? So we can get real practical

for our listeners here.

As far as in metrics,

I think one of it is retention. Now,

we have a different type of hospital.

We are ER and specialty, and so you don't really

have retention. You get a lot of referrals from that.

But, we're not trying to take

clients from other hospitals. They refer them to us, and then they go

back for the things that those hospitals do.

But, depending on what type of practice you

have, you need to look at your retention numbers.

And

in a practice like ours, you need to look at your referral numbers

because

those are things that you have to have your customers coming

in, and you need to be able to see if there's

a problem there. And if there's a problem there, you need to figure out what

is causing your retention to be off.

And-

Mm

... if there's not referrals coming, then you need

to find out why is it. Are you not communicating with the

referring doctors enough?

People that live in glass houses shouldn't throw stones, and you don't want to

be throwing people under the bus because

... And I tell clients this when they come in and say, "Well, why didn't that

doctor know this?" I'd say, "I'm seeing it two weeks later,

and I don't know what things looked like

then, but I know that they've changed." And-

Mm

... I don't say this to them, but I also know that

a lot of times that doctor did tell them these things,

but they ignored it or didn't listen or something.

And so

they may have told them the same things I told them, but

the owners don't seem to remember that sometimes.

That's why-

Right

... good documentation and records is important.

Mm.

And what's the one metric that we should ignore?

I think

honestly, I think that you have to

price your

business correctly.

But-

Yeah

... you see this all the time in

the

corporately owned practices,

that their metric is they're looking

at what is their pricing. And so if you

have an accountant or a corporate that's telling you, "You've got to raise

prices,"

at some point, people get tired of it and quit.

So-

Mm-hmm

... I

don't tend to look at that as much. I look

at what the bottom line is, and is

that

appropriate for my type of practice in my

area.

And

then I'm

happy with it,

if it is. If it isn't, then I look to see where is

that profitability going. And

because you have

to have good

profitability to be able to pay your staff

appropriately, and they're the backbone of the practice,

of keeping it together.

That's a great metric, and

PE is driven purely by profit, so they will

raise the prices until

people can't afford it-

Right

... right? They will raise it until that-

That's exactly true.

Yeah. But if you are able to find your peace with

the market that you're in, and you're

not losing out-

Right

...

and you can give affordable care, I think in the long run,

you win. Is that correct, Dr. Neal?

Yeah. That's how I feel like I win.

Okay.

And

honestly, you have to watch yourself to

not give too many things away. But-

Oh, yeah

... over the years, I've found you've helped people out

when they couldn't afford it truly, and

then they come back when they can afford it and

do everything that you would like them to do

because it's the best practice.

I

tell my staff and my doctors, "If we're not here to

make a decision, and you have to make a decision, you make it

based on the

golden rule, is put yourself in that client's position

and how would you want to be treated?

And then you do it that way." And nobody's ever going to yell at you about

that, because-

Right

... that's the best way, in my opinion, to make decisions in life,

period. But in veterinary medicine, it applies,

too

Okay. That's a great rule.

Now, Dr. Neal, for owners who may eventually want to sell their practice,

what should they start thinking about years before a sale to make that

business stronger, more transferable, and

more attractive to buyers?

You need to know who's probably

going to buy your practice. Are you looking at a

doctor in your practice that's going to take over someday?

Things like that. If you're looking at selling corporately,

that's a whole different ball game,

but

you need to start getting your practice ready for sale

multiple years beforehand, and a lot of it is cleaning

up your books.

Mm-hmm.

There's a lot of practices over the years that

ran personal expenses through their hospital,

which is illegal, and the IRS doesn't like that at

all.

But a lot of people over the years have

done that, and you have to clean up your books.

So, and the other thing is if, for

example, I've seen a lot of older veterinarians, they've

paid for their building.

Their profitability

is not base. It's higher than it should be

because they're not paying themselves rent for that building.

And, so you really have to clear up things like

that. Like are there family members on

working that actually are not working, or

that sort of thing. So you need to clean all that out,

if you're a practice owner that does that type of

thing. And, because if you

sell,

those books are going to be inspected, and they're going to look at

it like, "If I buy this practice, well, I'm

going to have to pay for that building, or I'm going to pay rent for that

building." And if,

for example, if $500,000 was the net, the

profitability, and I am actually

going to have to pay,

$7,000 a month in

rent to that owner, or if I purchase

it, I'm going to have to pay it to the bank, then that lowers it

by

90,000 bucks, 84,000 bucks. So you really don't

have a $500,000

profitability. It's getting closer to four.

So,

those are things that

are important,

and

you have to look at these things

and be able to tell them that this is

all clear because they're going to go through it.

Mm-hmm.

And there's other ways to make your hospital more profitable

by adding services.

You can,

as an example, when my husband and I would buy

practices, we would look at their books and decide

what we could do that would improve it.

A lot of times it was that they were not

doing

very

detailed... They'd only do spays and neuters and mild

dentistries, the low grade dentistries.

But had they added and learned skills that they could

do splenectomies or they could do a foreign body and

keep that in their hospital, then they could

do better. And so when we looked at hospitals, we'd look at them and say, "Can I

put a doctor in in this hospital that can do

this?" And that would increase the profitability of

the hospital.

Mm-hmm.

So whether you're selling or you're just trying to

do better, you can get your profitability up by adding things.

And that's not just something you can do in six months.

You've got to start early.

Mm-hmm. That's amazing. Thank you so much for that

insight from a buyer's perspective as well on what you're really

looking for when you're looking to buy and what you're thinking through,

"Okay, how am I going to improve this

when I take over?" Now, I'm just curious, you mentioned cleaning up the

books. How are we going to get started with that? What's a great place to start?

With your accountant

and yourself, and you need to look at what

did you pay for,

say,

an extension on your house and put it off to something

else. That's kind of extreme, but you just

clean out all those little things, and you really should have a credit

card that's for business expense and a credit card for personal expense,

and you shouldn't mix those

and that sort of thing. And then, and also,

over the years, I've had several different accountants,

and it's a good thing to

invest in a decent accountant, an accountant that

understands the veterinary profession, too.

Mm-hmm.

And they can help you with that. And like I said,

joining groups that are business management

oriented,

or attending classes for those, can be really

helpful

Okay. That's great.

Now to wrap things out over here, I got an interesting question.

Now you've gone from practicing in the analog age to

launching biotech and AI companies, right?

Yes.

What's perhaps one piece of old school

vet wisdom you think we are in danger of losing in the digital age?

Oh, I think the personal

communication.

Because it's not really the digital is

taking it over, it's that people are raised in such

digital manners that my

grandkids are on their iPhones and their iPads all the time, and they're

playing Roblox and doing FaceTime and everything,

but they really don't have as good of social

skills and explaining to clients and

that sort of thing. So I think understanding

other people is something that

the digital age is

creating problems in. And,

I find that a lot of

newer, younger doctors don't really like dealing with people

and a lot of people become

veterinarians because they don't really like people and they

like animals. Well,

that's like becoming a pediatrician and hating the parents.

They're not going to come back

and bring their kids to somebody that dislikes them and can't

communicate with them. So,

I think that's one thing. I use a lot of digital.

I'll

dictate into ChatGPT

everything I'm thinking about a case, all the facts,

and then I'll say, "Make it in bulleted points."

And I have it set up how I like it to go, and then I

text that or email it to the client and along with

the, say, the ultrasound I did. And

then I go back and call them and talk to them about it.

But they've already read the report, which they don't really understand, and then

they have my summary and synopsis of what's going on, what

I see, what I found, what I think is going

on, and how I want to handle it. And then they have that,

and then we have a conversation about it.

So it's

kind of

super helpful in a way, but it's also

damaging in that people aren't used to

really talking to other people. And since I think

communication is the biggest part of veterinary medicine, then

that becomes problematic for them.

And it's stressful for people that don't really like to

talk or don't

understand how to communicate with pet owners.

Right. What a wonderful takeaway there because,

yeah,

veterinarians are really brilliant people

overall.

Mm-hmm.

Truly, they are some of the most hardworking, most

empathetic

towards animals.

Right.

Towards another being.

But when it comes to human interactions,

yeah, social skills is something-

Not as good.

Yeah.

What a great point there, and a reminder, too, because that's the problem.

We

forget that that's a skill,

and it's a skill that is necessary not

just in survival, but also to thrive in life.

Yeah. That's true. It's important wherever you go.

So it's something that

people should

try to work on. And

a lot of people,

it just doesn't come natural to them.

And if you're one of those people, then you've got to

develop and think about how can I best

communicate so I can get the best for the pet I'm trying to

help. Because reality is, almost everybody that's a

veterinarian went to school to be a veterinarian because they love animals, not

because they thought they were going to get wealthy.

And so they might hope they get wealthy,

but the first thing that drove them to looking at veterinary

medicine is the pets and the animals, and whether it's

farm or whatever, they wanted to

help take care of that. And if you cannot communicate,

you cannot accomplish the goal of helping those pets.

And so,

that's as much or more important as learning to

do any veterinary procedure because you're

never going to get to go do those procedures if you don't know how to

communicate to the client that by doing this procedure,

your dog or cat is going to live a longer, healthier, pain-free

life.

So.

Sure.

There we go. It's the importance of people-to-people communication.

Now, Dr. Neel, where can the people find you and get in touch with

your work?

They can go to

my webpage at tinaneal.com.

You can also read my articles on

LinkedIn

as Dr. Tina Neel, and on

Substack, I write a Surviving Cancer

newsletter and articles

as Dr. Tina Neel.

Okay. Amazing. Thank you very much, Dr.

Tina Neel,

for joining us here this evening.

I really appreciate you having me on and letting me

talk. I like to talk.

Amazing.

And I like to help.

And we'd also like to give a shout-out and a thank you

to Ekwa Marketing, our platinum sponsor, for supporting the Veterinary Business

Podcast. And for practice owners listening in who want more clarity

around what is actually driving growth in their practice,

remember that Ekwa is giving you a complimentary marketing

strategy meeting. You can go ahead and book yours at

www.veterinarybusinessinstitute.com/msm

I'll repeat that one last time. Veterinary Business Institute, that's

one word,.com/msm. I'm

Don Adeesha, and thank you for listening. We'll see you on the next one.

Take care