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1、INTRODUCTIONKPIsREGIONAL BREAKDOWNREVENUE MIXPRACTICE SIZEFINANCIALSSTAFFINGLOOKING AHEAD12-34--141516-17Navigating The Evolving Veterinary Landscape If 2020 was the turning point and 2021 the year of adaptation,2022 marks our jour-ney through a veterinary landscape shaped by ongoing chall
2、enges and shifting market dynamics.This year also showcased the human side of the veterinary industry,as practices faced mounting challenges such as staffing shortag-es and continued burnout.Amidst these trials,the industry experienced pivotal changes,placing greater emphasis on the value of its peo
3、ple and their well-being.Weve also noticed that the overall number of client visits has taken a bit of a hit,but each transaction is actually bringing in more revenue than before.So,although fewer transactions might happen,the ones that do take place are packing a more signif-icant punch in terms of
4、 income and services delivered.Just another example of how the veterinary world keeps adapting and evolving!This reader-friendly report aims to capture the essence of this trans-formative year,including the long-term shifts in demand,and a severe labor shortage,among other factors.Our goal is to mak
5、e it easy to see where your practice stands compared to similar ones in your area,pro-viding true benchmarks.But whats most critical is helping you prepare for a future thats changing at lightning speed.In our analytical findings,were taking a deep dive into the 2022 veterinary industry data,explori
6、ng all the big and small trends in areas like revenue,expenses,transaction charges,and how new clients are spending their money(and how were keeping em around).Were also serving up some zoomed-in financial details,giving you a closer look at how the market is changing and what it means for the veter
7、inary world as it keeps on evolving./DATA STORIES22023 VETERINARY INDUSTRY BENCHMARK REPORTKEY PERFORMANCE INDICATORS(KPIs)The Big Picture:Navigating Staff Shortages,Evolving Priorities,and Financial TrendsCOVID served as a catalyst for substantial changes within our indus-try,and the resulting stre
8、ssors it introduced persisteven as the pandemic has diminished in severity.One of the biggest challenges in 2020 and 2021 was hospitals being overwhelmed,overcrowding,and the necessity to restrict new client growth.Additionally,pet owners had various pandemic-related worries that influenced some of
9、them in scheduling appointments.The surge in demand for veterinary services led to longer waiting times,as more pet owners were home and could easily spot chang-es in their pets health.These aspects likely played a role in the ob-served trends regarding new client numbers and patient retention,while
10、 in 2022,the veterinary sector grappled with persistent staff shortages and the need to adapt to emerging priorities and financial shifts.No matter where they were located,these themes kept popping up as practices struggled with service demand and the need to tweak their game plan.Even though averag
11、e revenue continued to remain positive,the growth pace slowed from 2021.Practices put their energy into tackling labor shortages and adapting to the markets ever-changing demands.Its no shocker that bigger hospitals with 5.2%8.0%3.2%KPITRANSACTIONSAVG TRANS (ATC)NEW CLIENTS2022-3.3%10.6%-3.5%2021REV
12、ENUE GROWTH13.4%6.3%20212022-7.1%YOY CHANGEmore resources showed they could bounce back from these chal-lenges,but it was also pretty impressive to see that smaller hospi-tals had come up with their own ways to ride the waves of change./DATA STORIES32023 VETERINARY INDUSTRY BENCHMARK REPORTKEY PERFO
13、RMANCE INDICATORS(KPIs)MONTH OVER MONTH CHANGE(2021-2022)REVENUETRANSACTIONSAVERAGE TRANSACTION CHARGE(ATC)NEW CLIENTS15%10%5%0%-5%-10%-15%GROWTH%OVER PRIOR PERIOD/DATA STORIES42023 VETERINARY INDUSTRY BENCHMARK REPORTREGIONAL BREAKDOWNRegional Breakdown:Exploring Differences Examining regional diff
14、erences,we observed varying revenue growth and ATC trends in 2022.All regions did see some revenue growth compared to 2021,but it wasnt all smooth sailing.The North-east felt the change the most,with a pretty noticeable dip in revenue growth pace.Additional factors may include New Yorks high pet ado
15、ption rates,which were part of a nationwide surge in 2020 and 2021.The subsequent decrease in 2022 could be responsible for the comparative downturn in the region.Our analysts believe this could be correlated with ongoing population declines in states such as New York,as was seen in the 2020 census
16、data.On the flip side,the West enjoyed the strongest growth in both revenue and ATC.When it comes to transactions,every region experienced a bit of a slowdown compared to 2021.The Southwest took the biggest hit in transactions as a percentage compared to the previous year,but the Southeast managed t
17、o keep the decline pretty minimal,with the West not far behind.As for new clients,the numbers dropped in all regions.The Southwest felt the impact the most,with a big slow-down compared to 2021 levels,and the Midwest wasnt far behind.These regional differences really highlight how staffing,financial
18、,and transactional challenges can affect veterinary practices have varied effects on practices,depending on their location.12.4%16.3%11.9%14.1%8.8%2021WESTNORTHEASTMIDWESTSOUTHEASTSOUTHWESTREVENUE GROWTH YEAR-OVER-YEAR202210.1%4.4%4.8%7.3%4.3%indicates below average13.4%OVERALL6.3%/DATA STORIES52023
19、 VETERINARY INDUSTRY BENCHMARK REPORTREGIONAL BREAKDOWN2.9%8.2%4.4%5.8%1.7%2021WESTNORTHEASTMIDWESTSOUTHEASTSOUTHWESTTRANSACTIONS YEAR-OVER-YEAR2022-2.2%-3.7%-3.6%-2.0%-5.8%indicates below average5.2%OVERALL-3.3%9.4%7.5%7.3%8.1%7.4%2021WESTNORTHEASTMIDWESTSOUTHEASTSOUTHWESTATC CHANGE YEAR-OVER-YEAR2
20、02212.6%8.5%8.7%10.9%10.9%indicates below average8.0%OVERALL10.6%/DATA STORIES62023 VETERINARY INDUSTRY BENCHMARK REPORTREGIONAL BREAKDOWNATC:Fewer Transactions,More ValueThere has been a shift in focus that has led to a limit in transac-tion capacity as practices concentrate on managing their exist
21、ing workload,ensuring that the quality of care doesnt suffer due to overburdening their teams.Meanwhile,there has been a notable acceleration in the growth rate of Average Transaction Charge(ATC)during 2022.This can be attributed,in part,to rising vendor costs,inflation,and the need to adjust to ext
22、ernal cost increases,partic-ularly in relation to diagnostics such as Lab and Imaging services.By emphasizing staff retention and the quality of care delivery,practices are adapting to the industrys challenges while still man-aging to support ATC growth.The focus on diagnostics and other high-value
23、services helps to offset the limitations in transaction capacity,ensuring a more sustainable and balanced approach to managing a practice in these demanding times.Consequently,with limited capacity from staffing shortages,transactions decreased,but ATC growth was key in offsetting the decline to dri
24、ve revenue growth over the prior year.In 2022,ATC increased in growth pace compared to 2021,partly due to inflation and a rise in revenue from diagnostic services such as laboratory and imaging tests.Despite these hurdles,veterinary practices demonstrated resil-ience and adaptability.2022 was a year
25、 of navigating staff and service challenges as practices sought innovative ways to manage their resources and optimize the quality of care provided to their clients.Revenue growth was still above 2021,but in 2022,that growth pace slowed compared to the previous two years,primarily attribut-ed to a r
26、eduction in transactions and a decrease in new clients.Practices focused on internal capacity and staff retention,with many opting to limit marketing efforts,hesitant to attract new clients without the resources to accommodate them effectively.As we pointed out in our 2021 Veterinary Marketing Bench
27、mark Re-port,these metrics exhibited little to no growth,suggesting that a majority of hospitals reduced their marketing activities.This could be attributed to a range of factors,such as budget constraints,ongoing pandemic-induced disruptions,or pausing marketing as a whole.With staff shortages and
28、burnout affecting veterinary hospitals,efforts focused their efforts toward staff retention and maintaining quality care delivery./DATA STORIES72023 VETERINARY INDUSTRY BENCHMARK REPORTREGIONAL BREAKDOWNAVERAGE TRANSACTION CHARGE(ATC)GROWTH CHARTREGIONS202020212022$232|$254|$289WESTSOUTHWEST$219|$23
29、2|$254NORTHEAST$189|$202|$220SOUTHEAST$170|$182|$201In 2022,ATC increased in growth pace compared to 2021,partly due to inflation and a rise in revenue from diagnostic services such as laboratory and imaging tests.$250$300$200$150$100MIDWEST$153|$165|$181/DATA STORIES82023 VETERINARY INDUSTRY BENCHM
30、ARK REPORTREGIONAL BREAKDOWNNew Client DataIn 2021,many veterinary hospitals coped with staffing challenges by significantly reducing or halting new clients acceptance.While there was an uptick in new clients the previous year,2022 saw a decline in new client growth as well as a drop in overall tran
31、saction volume.This really shows the ongoing struggle for vet practices to juggle their resources and serve their communities.However,its worth pointing out that new clients are actually spending more on each transaction.So,while fewer new clients might be coming in,the value they bring to practices
32、 has increased.In our data analysis,we find that volume-based revenue,such as Exams and Professional Services,has taken a hit.You can see this in the smaller slice of the pie that these services now make up in the total revenue for the practice.This adjustment in client spending habits could be due
33、to several factors,such as limited hospital ca-pacity,a growing focus on diagnostics,and how inflation affected service fees.Existing client retention saw a slight dip that is likely correlated to the start of the pandemic in March 2020 but has generally remained stable.New clients are spending more
34、 on average on each transac-tionvolume-based revenue is not growing at the same pace as other-0.8%3.2%-1.1%6.9%2.9%2021WESTNORTHEASTMIDWESTSOUTHEASTSOUTHWESTNEW CLIENTS YEAR-OVER-YEAR2022-2.1%-0.2%-5.6%-2.6%-7.0%indicates below average3.2%OVERALL-3.5%/DATA STORIES92023 VETERINARY INDUSTRY BENCHMARK
35、REPORTREGIONAL BREAKDOWNrevenue areas.We see that in the decreased revenue percentage for exams and professional services revenue.Revenue from Diag-nostics is growing in part due to inflationary-driven fee increases.We believe the increased cost of Lab and Diagnostic procedures has forced practices
36、to raise prices,which has created an increase in revenue percentages from these categories.This somewhat forced shift in spending habits towards higher transaction values presents an interesting opportunity for veterinary practices to adapt their services and strategies accordingly.Another area that
37、 impacted new client rates was the pet adoption boom.During the height of COVID,we witnessed an unprecedented pet adoption boom.As people found themselves confined to their homes,pets became a source of companionship and comfort.This surge in adoption led to a massive increase in demand for veteri-n
38、ary care,driving new client growth in the industry.As the world gradually returned to normal in 2022,this trend took an unexpected turn.Many pet owners,now back to work,faced the harsh reality of being unable to care for their newly-adopted pets.We also saw financial instability playing a significan
39、t role in pet surrenders.As people experienced economic challenges,many people strug-gled to afford the expenses of pet ownership.This led to a skyrock-eting surrender rate,with shelters overflowing with animals in need of homes.The impact of this shift was felt across the veteri-nary sector.New cli
40、ent numbers,which had spiked during the adoption boom,began to drop as the influx of new pet owners dwindled.Similarly,the decline in transactions indicated that fewer pets were receiving regular care due to the high surrender rate and the stabilization of the pet population.In 2022,the primary them
41、e affecting transactions was staffing shortages and capacity limitations,however,our analysts also ob-served pet surrender rates had a notable impact.The remarkable pet adoption boom and its subsequent decline in 2022 served as a double-edged sword for the veterinary industry.While it initially spur
42、red new client growth and increased demand for services,the surge in pet surrenders ultimately led to a contraction in business,highlighting the industrys need for adaptability and resilience in the face of changing circumstances.AVERAGE NEW CLIENT SPEND$668.26$700.83202120224.9%YOY CHANGE/DATA STOR
43、IES102023 VETERINARY INDUSTRY BENCHMARK REPORTREVENUE MIXRevenue Mix:Adapting to ChangeIn 2021,we observed higher revenue as client compliance grew,with clients making the most of their less frequent appointments.Fast forward to 2022,the growth in Lab and Imaging fees has be-come the most significan
44、t factor impacting the revenue mix.The primary driver of this change has been fee increases,especially in the lab/imaging sub-category,which is growing the fastest in prac-tice revenue categories.With lab costs experiencing considerable inflation in 2022,practices have been pushed to raise fees in t
45、hese areas.Meanwhile,weve also seen a slight uptick in boarding and grooming revenue,likely due to increased travel as mandates con-tinued to be stripped away.One major challenge veterinary practices faced was the rise in labor costs,particularly for DVMs,which have outpaced revenue growth.To cope,p
46、ractices have had to adjust for wage increases resulting from market pressures.In essence,labor costs are growing faster than revenue,with DVM costs making the most significant impact.On the bright side,COGS(Cost of Goods Sold)has improved as ATC(Average Transaction Charge)grows,and the revenue mix
47、has con-tinued to shift more toward more diagnostics-related revenues.This demonstrates that veterinary practices are finding ways to adapt and succeed even amid a challenging financial landscape./DATA STORIES112023 VETERINARY INDUSTRY BENCHMARK REPORTREVENUE MIX2020-2022 CONSOLIDATED REVENUE MIX39.
48、3%26.5%20.4%11.5%2.9%-0.6%40.9%25.5%21.3%11.8%3.4%-2.8%1.6%-1.0%0.9%0.3%0.4%-2.1%20212022YOY2022 KEY METRICMIX GROUPYOY2020EXAM|PROF SERV|HOSPPHARM|DIET|ANCILLARY LAB|IMAGING|DIAGNOSTICSSX|ANESTHESIA|DENTISTRYBOARD|GROOMDISCOUNTSRevenue growth in 2022 was driven by two factors:a revenue mix that con
49、tinued to shift toward more diagnos-tics-related and high-value service revenues and a post-pandemic uptick in boarding and grooming services.*Numbers shown are percentages of Total Revenue(100%)-2.9%-0.1%0.3%0.4%0.3%2.1%38.0%25.3%21.6%12.2%3.6%-0.7%21.6%LAB|IMAGING|DIAGNOSTICS/DATA STORIES122023 VE
50、TERINARY INDUSTRY BENCHMARK REPORTPRACTICE SIZEPractice Size:Navigating Industry ChallengesWhen examining the relationship between practice size and growth,practices exceeding$2 million in value demonstrated the strongest performance compared to 2021.They exhibited minimal slowdown in transactions,n
51、ew client acquisition,and the strongest revenue growth percentage over the prior year.In contrast,practices with revenues under$1.2 million faced more significant challenges,par-ticularly when compared to larger and small-to-mid-sized practices.They experienced the largest drop in transaction volume
52、 as a per-centage compared to 2021 levels,the most significant percentage decrease in new clients,and the slowest ATC growth percentage over the previous year.These findings suggest that larger practices were better equipped to navigate the various challenges faced by the veterinary industry in 2022
53、,while smaller practices encountered more significant dif-ficulties in areas such as transactions,new client acquisition,and ATC growth./DATA STORIES132023 VETERINARY INDUSTRY BENCHMARK REPORTFINANCIALSFinancials:Navigating The Balancing ActAs mentioned in our revenue mix,labor costs outpace revenue
54、 growth,with DVM wages being impacted most significantly,while improvements in COGS and ATC growth shift the revenue mix to-wards diagnostics.We believe that,to some degree,this happens due to major lab cost hikes,leading to adjustments in charges.Similarly to the year prior,we saw higher ATC and lo
55、wer COGS,which often corresponds particularly when stemming from non-inventory revenue.Our analysts suggest this is a strong correlation,and vet-erinary practices are adapting and recalibrating their strategies to maintain this crucial equilibrium.As practices face unprecedent-ed challenges,theyre l
56、earning to adapt and refocus their strate-gies.One notable shift has been a shift in spending on marketing.Practices shifted and prioritized recruitment marketing and brand support to set themselves up for future stability.In this ever-chang-ing landscape,veterinary practices are finding ways to ada
57、pt and thrive,despite the challenges presented by labor costs,staffing issues,and financial pressures.The secret to success is staying agile and embracing change.YEAR-OVER-YEAR($CHANGE)COGs20%15%10%5%0EBITDALABOROPEX other22122/DATA STORIES142023 VETERINARY INDUSTRY BENCHMARK REPORTFINANC
58、IALS2020-2022 FINANCIAL DATA38.0%2.6%3.3%0.4%8.0%2.8%0.9%2.1%38.1%2.8%3.2%0.4%7.9%2.8%0.9%2.1%16.1%23.3%12.7%28.3%13.9%16.9%13.8%15.3%0.1%0.2%-0.1%0.0%-0.1%0.0%0.0%0.0%Total Labor ExpenseTotal Employer Payroll TaxesTotal Employee Fringe BenefitsTotal Other Employee ExpensesTotal Facility Related Exp
59、ensesTotal Administrative ExpenseTotal Advertising&Promotion ExpenseTotal Fee Income Collection Expense1.5%0.1%0.1%0.0%-0.1%-0.1%0.0%0.0%39.6%3.0%3.4%0.5%7.8%2.7%0.9%2.1%25.9%25.5%13.5%5.6%-0.5%-1.4%24.1%74.1%74.5%16.4%13.8%0.5%1.4%75.9%58.1%58.2%16.0%14.7%0.2%1.6%59.8%16.0%16.3%18.0%10.3%0.3%-0.2%1
60、6.1%2021YoY($CHANGE)YoY($CHANGE)WEIGHTEDDELTAWEIGHTEDDELTA20222020DATA YEARCOST OF GOODSGROSS PROFITOPERATING EXPENSESEBITDA16.1%16.8%16.3%21.7%9.9%8.5%10.4%11.6%/DATA STORIES152023 VETERINARY INDUSTRY BENCHMARK REPORTSTAFFINGStaffing:Valuing Our PeopleAs mentioned in our 2022 Practice Manager Repor
61、t,Practice Man-agers across the country identified Staff Retention as their second most pressing challenge.The effects of high staff turnover and re-cruitment obstacles were evident in the growth of transactions and revenue in veterinary hospitals.In 2022,hospitals acknowledged the significance of a
62、 stable and satisfied workforce and made it a top priority to prioritize employee retention and well-being.As hospitals became aware of the importance of cultivating a supportive work environment,they devoted more resources to nurturing their teams happiness and stability.These efforts aimed to crea
63、te a sustainable and successful practice,emphasizing that people are precious in the veterinary industry.As we look back on this remarkable year,its evident that the heart and soul of the industry lie within the dedicated professionals who continue to rise above challenges and work tirelessly to pro
64、vide exceptional care for our beloved pets./DATA STORIES162023 VETERINARY INDUSTRY BENCHMARK REPORTLOOKING AHEADEmbracing Adaptability&Rolling With The PunchesOur iVET360 business analytics team has taken a good,hard look at the big picture and all detailed data from 2022,and its clear that adaptabi
65、lity is the name of the game.Even with all the chaos and uncertainty over the past three years,veterinary practices that have a clear view of how theyre doing just keep on thriving or have found themselves more resilient to the bumps in the road.We saw our clients who benefit from our iVET360 Analyt
66、ics Services experience remarkable success in 2022.Their revenue growth aver-aged an impressive 10.4%,significantly outperforming the nation-al average of 6.3%.This demonstrates our data-driven approachs value and impact in driving business growth.These same clients also enjoyed a positive 1%growth
67、in transac-tions,which is a noteworthy achievement compared to the na-tional average of-3.3%.This proves that our Analytics Services dont just boost revenue but also foster customer engagement even when times get rough.Its clearly more important than ever to lever-age data and insights to stay ahead
68、 in a competitive and constantly evolving market.As weve mentioned in this report,staffing is still the biggest head-ache for the industry.However,there are clear actions you can take to weather this storm.If you havent already,go ahead and take advantage of our totally free Recruiting Tool Kit.Its
69、got a DIY job ad builder to help you whip up more effective posts for open positions.The most critical part of tackling staffing challenges is doing ev-erything you can to keep burnout at bay and hold on to your current employees.Another key to rolling with the punches is ensuring your practices bra
70、nd looks its best for job candidates and new clients(because we know youll want them down the road).Our research shows that practices that keep up with their marketing are in a better posi-tion to attract doctors,support staff,and even potential buyers if youre thinking about hanging up your stethos
71、cope and enjoying retirement.If you havent already,check out more info on creating a careers page for your website.Whats Next?In 2021,we saw revenue rise with better client compliance and less frequent appointments,while 2022s lab and imaging fee growth stole the spotlight,significantly impacting th
72、e revenue mix.Veterinary practices have been dancing with challenges in staff retention and juggling escalating labor costs,particularly for DVM wages,which have outpaced revenue growth.As our report reveals,adaptability is the secret sauce for success,and practices showcasing resilience and flexibi
73、lity have flourished despite the ongoing staffing challenges and soaring labor costs.We encourage taking advantage of resources like our free Recruit-ing Tool Kit and putting strategies in place to minimize employee burnout and keep a content workforce.Its essential for veterinary practices to put employee well-being center stage and stay nimble in the ever-evolving landscape.By doing so,you can gracefully tackle these challenges and create a sustainable,thriving busi-ness for the long haul.CALL 503-765-6360 /INFOiVET360.COM /iVET360.COM