417 - How Much Financial Transparency Do Support Staff Need?

0:00Maria Pirita: Ten years ago, I thought people came to conferences for information. I was wrong. You can Google almost any answer in 30 seconds while hiding in a supply closet. What you can't Google is skill. Skill is having hard conversation when you're exhausted, short-staffed, and the person across from you is upset. And that only comes from practicing with people who will tell you the truth when you miss. That's what Uncharted is. On Friday, January 15th in Orlando, the day before VMX opens, we're celebrating 10 years with a one-day conference built around leaders practicing hard things together. You'll get Dr.

0:37Maria Pirita: Peter Weinstein, the Uncharted team, and about a dozen mic drop talks from people in the community, people you know like Dr. Phil Richmond and Dr. Caitlin DeWild. I'm not going to tell you it'll be easy because it won't. But if you want to do the work alongside people who get it, come and join us. details are at unchartedvet.com. Register today. Don't miss your chance.

1:00Ron Sosa: Bienvenidos and welcome to another episode of the Uncharted Veterinary Podcast. I am your host, Maria Pareda, and I am super jazzed to bring you today's episode because we are talking about financial transparency. How much do you really let your team peek behind the curtain when it comes to your clinic's finances? We got an excellent mailbag from an associate DVM actually who would love to see the clinic grow. They want to see the team grow. And they're also kind of placed in this weird spot where they talk about things that we can do or can't do based on the finances, but they really don't know how the finances are doing.

1:34Ron Sosa: And so this associate is wondering, how much do you actually let the team know about the clinic finances? They feel like they need some of these numbers in order to really move the needle to help motivate the team, to let them know whether their initiatives actually worked or not. All of this requires some access to the financials. And so I brought you Ron Sosa for this conversation. And the reason why is because he's actually done quite a few workshops in the Uncharted community around financial transparency. And I feel like he had such a great system with his team that we just had to share it with y 'all.

2:07Ron Sosa: So if you want to know exactly how much we should be sharing, how often and where these numbers can really help, if you're a practice owner or practice manager who's been hesitant to share some of these financials. We'll share exactly why we think it might be a good idea and where we can put in some boundaries. And it's just a really fun episode. So I hope you guys like it. Without further ado, let's get into this episode. And now the Uncharted podcast. You show up for pets every day. It's because care is your calling. And it's ours too. We know it's what drives you to make a difference in the health and well-being of every pet.

2:50Ron Sosa: That's because at Zoetis, hundreds of veterinarians are part of our team too. Working with you to provide science-backed medicines, technology, and practical support to help elevate your standard of care. Learn more at careisyourcalling.com. And we are back. I am so excited. I'm sitting here with Ron Sosa. Ron, how are you?

3:13Maria Pirita: I'm doing great. How are you? I mean, coming back from vacation, it's been a little hard to jumpstart.

3:18Ron Sosa: I know. We miss you. You were just on a cruise, are you not? How was that?

3:23Maria Pirita: Oh, the cruise was amazing. I've never been on a cruise before, and we were in the Bahamas. By the way, you have this dream in your head of what the Bahamas is going to be. It was brutal hot. It was brutal hot and humid, and not very many places have AC.

3:40Ron Sosa: oh i never even thought about that i never thought about the ac part but yeah i want to talk to you today about a mailbag that came through and i feel like you are the perfect person for this because in the uncharted community not that long ago you did a workshop which i think is still available i could be wrong around financial transparency with the team like how to have a meeting and how to have financial transparency and i remember during that one i was so on board with so much of what you said i'm a big fan about this but that's kind of what this mailbag that we got was around. Do you mind if I read it out loud to you?

4:11Maria Pirita: Yeah, please.

4:12Ron Sosa: Okay. This is really cute because it said, hi, uncharted team, which is another reason. I take it very seriously when they're like, hi, Andy. Hi, Maria. Hi, Ron. This is to the uncharted team. And I was like, oh, thanks. It said, hi, uncharted team. I'm an associate DVM in a small animal rural multi-doctor private practice. I was wondering what your folks' opinions on financial transparency with the clinic staff and associates are. For example, should a staff non-ownership DVMs be included or made aware of the overall health of the clinic in terms of how profitable we are, what our KPIs are telling us, and involved in using that information for goal-focused setting.

4:47Ron Sosa: If so, how often, or does more hands in the kitchen just make a bigger mess? I know the other associates and I received individual production updates monthly, but otherwise we have no clue how healthy the practice is financially. We don't know how much staffing, supplies, and the building itself costs on a monthly basis, so we can't help to try and meet those demands. When I approached the owning DVM about other KPIs beyond my own production, they got cagey. How do I help get the whole team to buy into small changes and improve efficiency without showing them data and having a way to track our progress?

5:19Ron Sosa: Some of the staff are feeling burnt out, but we have no numbers to discuss why we can't versus can afford more staff or new equipment, etc. Thanks for all your advice. I listen to the pod weekly and always learn something new. I love that they put that in the last one. I was like, oh, thank you. We love hearing from people. Yeah. And I thought it was such a great question because I was like, man, it's so true. I'm a numbers person, so I love numbers. And we did an episode, not that many episodes back, around a practice manager who was denied some of this, the financial access and ways in which it held the practice manager back.

5:54Ron Sosa: And now this, I felt like was such a good question because now it's talking about, well, what does that mean for the rest of the team? Like the associate DBMs and technicians, how much financial transparency should we have with them? And so I have so many questions for you, Ron.

6:09Maria Pirita: I have so many questions for the mailbag writer because like one thing I love about this, right? It wasn't like I want to see how profitable you are. What I took away from that question is I want to make the practice better. And in order to do that, I would like to have some numbers to steer in that direction. So do I think that this person needs full on financial transparency? Probably not, but they need a peek into the window, which is very much to your point, what I talked about in the financial transparency conversations and how to have financial transparency conversations and team meetings with your team is very much about it's like, or how much do they need to know?

6:46Maria Pirita: Why do they need to know this? I love this question for that reason.

6:49Ron Sosa: Yeah, I think you're so right. And what I loved about it too is that they were flat out saying that they want to help the team, right? They want to get them to understand why we can't afford more people or why we can't do something. And so it comes, it sounds like it's coming from a place of, I want to steward the people, right? Like I want to make sure that we're stewarding our finances. I want to make sure that I'm moving the needle, but I do feel locked out of some of this.

7:17Maria Pirita: And your people will see it when there's a mismatch between what you can and cannot do, right? And what they see the practice doing, right? So this veterinarian has access to her financials, and she's seeing what she's producing. And then she's like, I'm going to take some leaps here, that she's probably saying, well, if I make this, they're probably making x, and this one's probably making y, which means the practice is making x, y, z. And so why can't we afford these things? is what I say, right? We can extrapolate data. It may not be correct, but we're definitely good at extrapolating data that way and kind of forming our own stories and pictures in our head.

7:54Ron Sosa: Yes, you are so right. And I think that people will, unintentionally, it's part of anxiety, right? When you don't know what's coming or we don't know something, your brain will naturally make up stories about what is really happening. And we actually talk a little bit about this. We have a course that's coming out. I'm not even sure if I'm allowed to talk about it, so they might cut this out. Let's talk about it right. But we have a course coming out soon on how to have financial conversations with clients, basically. And it's for the team on training them how to talk about money. But one of the things that we're talking about in the course is basically trying to explain to the team where the money actually goes.

8:28Ron Sosa: Because the team will sometimes see, oh, vaccines are marked up 150%. That means that we're making this much on the vaccines. But we forget that markup is not the same as profit, right? So like even though a vaccine could be marked up 150%, once you take into consideration everything that goes into the vaccine, the refrigeration, the building, everything, then the profit on that could still only be like 5%, right? And so without having these conversations, without training your team on where the money goes, they will make up where they think the money is going. And so as much as we tell people, like, I promise you, I don't think that there is a single, you know, practice owner that is driving their Lamborghini and going on expensive yacht trips every weekend.

9:11Ron Sosa: Like, I don't think that person exists. I could be wrong. Maybe there is. Maybe they have a side hustle. I don't know. But either way, like the most common.

9:19Maria Pirita: Your spouse is doing something.

9:20Ron Sosa: Yeah, it's like, if you see me in my pool, it's because my husband's a pilot. Like, it is not because of that med, right? But I think people will make up stories around, you know, what is happening when we don't have the full answer of what's going on. So I think that it's kind of fair to say, to ask this person, like, are we making assumptions? Are we not making assumptions? But the truth for the reality for the practice owner is they're going to do that if you don't have any financial transparency. see.

9:48Maria Pirita: Yeah. So to paint the picture for the listeners here, like I remember working in a practice, right. And I was still a vet assistant at the time. And I had stopped managing a practice to like, cause I thought I wanted less responsibility. And then it just never happened because naturally I'd just take on more anyway. So I'm working there and the practice owner is, he bought one of the first Teslas out there, right. And was like showing his clients and showing the team and then talking about renovating his cabin that he went to the weekends. and then when the team was like, we need more staff, we need more of this, we need a new machine of that.

10:20Maria Pirita: He's like, no, no, we don't have the money. No, no. But all we could see what he was doing in his personal life was like, you must be making money. You have a cabin, you have a Tesla, you have da-da-da-da. So we do, we create these stories. We have no idea the financial viability of the hospital itself. We just knew that in his personal expenditures were pretty high. We had no idea what his spouse was making. We had no idea of anything that was going on. And And it turns out like this person was living on a trust fund that none of us would have known.

10:48Ron Sosa: I didn't even I forget that those exist. I mean, you're not in trust fund territory here. It's like, right.

10:55Maria Pirita: But those are things we don't need to know. First generation American.

10:56Ron Sosa: I can't. Yeah. But you're right. You're so right. Explaining this from the employee side. Let's look at this from the practice owner side. So when an owner gets cagey about sharing financials, what do you think is usually happening underneath that? Is it distrust of the person asking or something closer to like fear? What do you think is the reason behind not sharing?

11:16Maria Pirita: I think there's a lot of fear in transparency of the numbers. So being a previous practice owner, although I never really had this, my business partner was very much like, and I know many owners that are like this, like when we're doing well, I don't want everybody to think that we can just spend more money because there's parts of the year where we don't do well and we have to cover those months in which we have a deficit, right? So it's not any particular time where if we look at a short period of time on our financial statement and our busiest time of year is like December through March. I remember being my busiest time of year in practice in Arizona.

11:52Maria Pirita: It's like you could look at that and we were wildly profitable. And then you would look at our summers and in Arizona, like it's hot. People are traveling and a lot of snowbirds. And so they go back home. And then we weren't as profitable. but if I want off a decently profitable year, I have to wax and wane those numbers. And so if you look at it from a very limited perspective, you can make it seem like we're doing really well. Why can't we do all these things? Then you get people that are really upset with you. It's like, well, and I deserve more money and we should have this and we should have that.

12:24Maria Pirita: And it becomes like, they don't have the true holistic picture of what's going on just by a snapshot of a P &L.

12:30Ron Sosa: Yeah, I think you're so right. And we also forget how many like people are in debt also from buying the practice remodels from your own education. Some of that is going into that, like that's feeding the clinic. And so I think that there's sometimes practice owners who can almost become like a little bit more self-conscious of those things, right? Like I don't want people to see this giant mountain that the debt that the clinic might be behind. And then there's also some people who also I think do fear the whole embezzlement thing. In the previous episode that I was talking about, we did cover some flags for like when we start to see, you know, fraud or embezzlement in practices.

13:06Ron Sosa: So I'm not going to cover that here. But I think that that is sometimes one of the fears is if I give somebody too much excess, will they turn around and do some things to the numbers to make that their own better, right? So I think that there's a lot that could be happening here.

13:20Maria Pirita: Yeah, I love that one point where it's like, well, if my practice is not doing well, right? It's one thing to say, we don't have money for another person, we don't have money for a piece of equipment. It's another thing to show your books and you're like in the red and then your employees are like oh my god do i need to start applying for a new job do i exactly then you have this scarcity of like i don't even know how am i going to be terminated next month like every time i get called in the office is it am i on the chopping block like we also don't want that fear to run around the hospital too so we've got this kind of dynamic of like when i'm doing well i don't want them to think they can take advantage of it when i'm not doing well i don't want them to think that they need to find a new job because it does even out throughout the year, generally speaking.

14:00Ron Sosa: Yeah, that's such a good point. I feel like I've even seen that in practice, like legit where, you know, I had a practice manager who came to me and they were like, the truth is we've been behind on some bills, but now the team is getting worried about their own jobs because they're seeing the alerts come through, right? The like last notice on the things. And I was like, that's got to be a really tough situation being because you're not to the point of closing yet, but the team is like, we got to address that elephant. And so a separate story, but I totally hear what you're saying. What do you think is the difference between an owner protecting the business and an owner protecting their own identity?

14:33Ron Sosa: Like, do you think there's any identity here that maybe they're trying to like, yeah, I mean, I 100 % think there

14:41Maria Pirita: is, right? Like, I know very many practice owners that won't even upgrade their car, right? Because they're afraid of if I get an upgraded car, then it's going to be look like I have more money than than I actually do in the practice, right? And the fact is that many employees are looking at the owner like they don't make money, right? Like they have to draw a salary from the practice. And so generally speaking, you're the practice owner, you have a lot of risk, you should take more money home than your counterparts, right? There's a lot more risk involved, there's a lot more work involved, there's a lot more involved.

15:18Maria Pirita: And so yeah, maybe you can afford things that others in your practice cannot. But that comes with the territory. And so I think we're afraid of sometimes looking that way. But I do think that there's an identity of what are they going to think of me if I make too much money? What are they going to think of me if I don't make enough money? Am I good enough to have a practice? There's a lot that goes in there. That negative inner critic really can play a part into whether you open up your financials. And even if you do, I am sure that voice in your head is still pretty loud and going like, I'm probably not good enough.

15:53Maria Pirita: Or they're going to think I'm stingy. Or like there's always the noise in our heads thinking that the worst case scenario.

16:00Ron Sosa: What else should we, as the associate or the practice owner, keep in mind as we think about asking for this transparency?

16:09Maria Pirita: Yeah, I think both sides of the coin here are going to be if I'm this associate vet, why am I actually wanting this information? What is it helping me get towards? Is this something where it's like, I want to be a future practice owner. So I would like to maybe step my way into that, which could be a great succession plan for this practice, right? Yeah, honestly. Am I somebody who just wants to make the practice better? And I don't like the word no. And so I just want to understand more. And in which case, if we give them more information, they will be highly productive. Or is this something where it's like, well, everybody's telling me no.

16:41Maria Pirita: So I just I feel like they're wrong, right? I'm just trying to prove them wrong. I think we got to get into the headspace of why are we asking for transparency? And don't get me wrong. I am a huge fan of transparent open book management, but I think we need to ask ourselves, why do we want that? So that we can act, I always say this, but we act within the values that we're trying to be, right? The human being that we're trying to be and not just a spiteful, jaded maybe from the business of being told no all the time, right? Because we don't like to be being told no, we want more autonomy in our lives, but like, why are we wanting that?

17:12Maria Pirita: Like what improvements are we trying to get to? Is there some measure of success that we can get that doesn't require open, transparent books? Because we may not get this out of this practice owner.

17:24Ron Sosa: Yeah. I mean, it's a very real, it's a reality that we might not get it. I can't stress this enough because I think you just called out something absolutely beautiful in what's really the fivefold why. We talk about the fivefold why. And because the reason why I bring that out is because they kind of started to share in the mailbag that their reasoning behind it is they want the team to be able to understand why we can or cannot do anything. We want to be able to motivate them on their own production, but we can't do that if we're not sharing these numbers. And so they shared that why. I would love for this person to dig in a little bit deeper and ask, why is that important to you?

17:58Ron Sosa: Why is that important to you? Because there could be a young practice owner in the making here, which we love to see anyway, right? Like, and for a practice owner, that might be something like, maybe I do want to share my financials with you. If I need somebody to sell my practice to maybe in 10, 20 years. Right. So having that conversation, I think is really, really crucial. And you're right. Is it something, cause I have been there before. I don't like being told no. I've told you this before. I told Andy, a lot of times I take a no as a not right now, because I don't like being told no, but it's because I get so passionate about things.

18:31Ron Sosa: And so sometimes I do have to do that level of thinking is like, am I just being stubborn about this? You know what I mean? Can I do my job without this piece? And it sometimes takes me thinking about it for weeks to before I can figure out like, no, this is just me feeling like I I don't have this and I need it. But in reality, there are other places where I could get it. Well, I think that's super important.

18:54Maria Pirita: Most of us reach for the intellectual answer, too. Right. It's like, well, I want to do this to make my team better. We know that's a universal truth. Everyone wants to make the team better for trying to state your case. Sometimes that universal truth, that like intellectual answer is not the actual truth. So we need to be honest about why do we need to know these numbers, right? Yeah. Sometimes it's like, I really want to know just because I selfishly want to know. And that's okay, right? We can be okay. That's the purpose. But then let's not put it on. we want to make the team better because if I am this practice owner and that's what you tell me you want to do and I open this up and you have no intention of actually making the team better, you just wanted to know to know, now you've actually hurt the trust that we put, you know, that has been exchanged.

19:39Maria Pirita: So I think we really need to be honest about the reason for wanting the transparency.

19:45Ron Sosa: I think that is so wise. You have no idea. There's so many times when like, I'm literally praying and I'm like, search the parts of my heart that are not being true to what I want, right? Because there's times when you're so right. This associate could really like be saying, well, I want to make the team better. But deep down, they're actually questioning whether I'm being paid appropriately, whether I'm making enough money compared to how much the practice owner is making. And like, this is what I'm telling myself because I want, but truth be told, I also want to know whether it's a time for me to get a raise or not, right?

20:19Ron Sosa: And so search those parts of your heart because it's true. If that is what you're looking to do, you're now going to take on this task of helping the team grow, helping motivate them, but your heart's not truly in it. You really just wanted to know whether you were getting paid appropriately.

20:33Maria Pirita: When we talk about trust economy, this ask is a very large withdrawal. For people who hold that tight to their chest, that's a big ask, especially if they deliver on it. That's a big withdrawal in trust, and they're going to be looking for deposits back in.

20:47Ron Sosa: Yeah, absolutely. Well, I think this is a perfect spot to get into action steps, because this person asked some very specific questions that I'm excited to get into. Are you ready?

20:54Maria Pirita: Yeah, let's do it.

20:55Ron Sosa: All right, let's take a little break here. All right, let's get back to some action steps here because I feel like they asked a ton of questions. So I wanna ask you first though, if you're an associate who wants more visibility, how do you ask for it in a way that doesn't sound like an accusation? Like we talked about this, they could be wanting to see whether they're making enough money or not. How do you even approach this conversation without making it sound like accusatory.

21:22Maria Pirita: Yeah, I think if we're in the right headspace and we truly wanna make the team better, I think it's about like having that conversation with your practice owner. One, we probably need to know who your practice owner is, right? Like what are their levers? That's what I call it. What are their dials for getting buy-in, right? Are they money-oriented? Are they team-oriented? What is their orientation that you can grab their attention with? and then speak to that point of view, right? So if this person is very much like a money person, like, hey, we could drive more dollars back into the practice.

21:58Maria Pirita: If I understood where we were at and I understood my break-even or if I understood like how much more we would need to make in order to get this equipment that I'm wanting to have that would actually bring in more revenue, like speak to the piece of why you want open transparency and then to the story in which is their buy and lever. I think if I'm saying that right.

22:21Ron Sosa: Yeah. I think it's super important to think about the motivators, right? Especially knowing the practice owners.

22:27Maria Pirita: I couldn't think of the word motivator.

22:28Ron Sosa: Yeah, no, you're good. I think the lovers works too. It depends about, I think it depends on the type of person that we're dealing with and really knowing this individual. We talk about discommunication styles all the time, but overall this is where the communication styles matter to me, where if it's somebody who is direct, I'm going to want to come with action and like where this is coming from. If it's somebody who's more detail oriented, I might share like the risks around things. If it's somebody who's more, you know, relationship focused, I might, I might explain why this will build the relationship between us and the technicians or us and the receptionist or us and the clients even.

23:02Ron Sosa: And so I think that that does matter. And I also want to come from a place of agreement too, and being able to say like, Hey, I know we both want a, You know, we both want this one thing. How can we work to get it there? And what do we need to get it to get there? I think for some of this too, what do you think is a reasonable first ask? Maybe not the full P &L, but something smaller that builds trust incrementally. Like what would it be that a practice owner would be comfortable with if we're not asking for full transparency? What do you think that they would need?

23:33Maria Pirita: I can speak for myself here. When we did open both transparency meetings with my team, me and my business partner, He was very adamant of like, I don't want the team to see my entire books, right? Did not want us to do that. And I said, okay, well, let's look at what we can do. You'll appreciate this, Maria. Being a CVPM is like we took the five pieces and that's what we opened up. It's like, well, here's our labor percentage, right? Like this is what we spent on labor in this month. This is what we spent on, you know, overhead. This is what we spent on the administrative parts, right? And so we broke it into the five buckets.

24:08Maria Pirita: and here's our actual profit at the end of the month. And what we would do is I would graph it over the course of three to six months. So they didn't just see one month that we made bank on. And then the following month where we didn't do so great because maybe we had a giant bulk order. And so visually we got to show them those five buckets because honestly, they don't need to know, like labor, we're not gonna wanna show, here's what veterinarians make and here's what technicians, like they don't, we don't wanna give that layer of transparency where now they start to make more stories. Yeah, we can give them like they're fascinated when they're like, hey, we spent a half a million dollars on labor this month or this quarter or whatever that is.

24:47Maria Pirita: They're like, whoa, I had no idea.

24:49Ron Sosa: Yeah.

24:49Maria Pirita: And then when they start to see like, oh, in order to keep the lights on in the building. Right. Here's all my hard cost overhead, which is, you know, my PIM systems and my electric bill and the water. And we spent$250 ,000, whatever that number is. Like they're like, wow. They had no clue that the electricity and the water bill in the building are so high. I think opening up those five buckets for our team was really good for them to go, oh, okay.

25:17Ron Sosa: Can you go through the five buckets real quick again? You said.

25:20Maria Pirita: So there's, I'm going to triple on this. I'll need your help. Okay. Yeah. Administrative costs. There's labor costs. There's profit. it. There is like, I think it was a facilities or overhead and I'm missing one. Why? Cost of good

25:34Ron Sosa: sold.

25:35Maria Pirita: Cost of good sold. Yes. Your inventory and inventory is a great one for them to see and how much you spend. Right. Because oftentimes what they hear is, oh, we're ran out of this again. They're trying to pull back the budget. They don't want to spend money because no, like, Hey, we spent hundreds of thousands of dollars on inventory this month. And they're really surprised at how much that costs.

25:56Ron Sosa: Yeah. Well, I mean, I think I was surprised when I first looked at the books, to be honest. I was like, I didn't even know this is how much we were doing. But the labor one is always really eye-opening because we don't, sometimes we can even talk about it as a percent, you know, we'll say 24 or 45 if you include doctors or whatever. But in general, you got to think about that. If your labor is at like 40 to 50%, that's half of whatever you bring in. Now you're justifying a 50 % increase in everything that you're doing, not even including all of these other things. And I think people don't labor does come to be one of the things that I labor and cost of default come to be the thing that people don't necessarily always see it as how much we're really spending.

26:33Ron Sosa: I love that you did that with your team. We, and I love the graphing part too, because the graphing part is what really makes them be able to see that there are so many ups and downs within the practice. We were very transparent around, we didn't call it revenue. We called it value of service delivered. And that was very intentional because for revenue people, Whenever the people hear revenue, they hear money coming in. They don't necessarily, or they switch it out for profit, I think. You know what I mean? Like, oh, this is how much money we have. And it's just like not, it's not quite what it is.

27:02Ron Sosa: This is the service that we delivered. It's not what it is. We used to share even weekly new client numbers, the average client transaction. We shared with them. There was another one. New clients, average client transaction. Oh, the number of appointments. But anyway, the reason why I'm sharing all of this is because those are numbers that don't necessarily open up your P &L.

27:21Maria Pirita: Yeah.

27:21Ron Sosa: If you wanted to still only ask for certain numbers that will help you move the needle, those are numbers that will help you. And those can be accessed through your PIMS and things like that. Like we had them where they could pull up the reports. And it's not like I still think that the level of transparency that you're talking about is ideal, in my opinion, because I feel like they're not going to make up as many stories. But if we are still looking at moving the needle, those are some of the numbers that I might ask for is I need at the very least to see how many types of services that we're doing, because I need to be able to see, like, are we recommending enough senior, you know, senior wellness blood work, right?

27:57Ron Sosa: Like preventative blood work that is going to help them ahead of time. Or are we not doing that at all? Do we need to focus on heartworm tests versus, you know, are we doing enough dentals? Like even those numbers, I think are things that we can offer as access that don't necessarily give away so much information. Yeah, I think.

28:14Maria Pirita: What I love about open book management is when you start to break down the numbers, right? Let's say you use the five category system. It's like, OK, for every dollar that we charge a client, 40 cents goes to you.

28:28Ron Sosa: Exactly.

28:29Maria Pirita: For every dollar we charge a client, 20 cents goes to my bottom line. Right. Right. Like that's what I have. And that's the money we reinvest back into for equipment, for upgrades, for renovations, for all the things that we want to bring into the practice. Right. That's 20 cents of every dollar that we sell. Hopefully we're making 20 percent. But that's the goal. Right. And when they start to see that we can when they're like, oh, we're charging the clients too much. It's like, OK, would you like to drop your 40 cents down?

29:00Ron Sosa: Yeah.

29:00Maria Pirita: Right. Like, do you want us to spend less than 40 cents on the dollar on your payroll? Or because that's how we survive here. And when you think about giving discounts to your clients now, it's like, well, can we just give them 20 % off? It's like, yeah, but that means we break even or you take a pay cut. Which one is it? And then we can start to have those kind of like a little bit more one-on-one, like harder conversations. Like, yeah, we can absolutely drop pricing. And this is the consequences of doing it.

29:27Ron Sosa: I absolutely love that you call that out because it's a simple thing that even practice owners and practice managers, when it comes to discounting, if you have a profit of 10 % and you're discounting 20 % for seniors, you're losing money on those 20%. And I think a lot of practice managers and employees, team members, they don't necessarily see all that because they don't know where the profit is at. So they're immediately thinking, oh, 10 % to 20 % is not actually that much when it's like$100. It's like, well, if you think about how many times you're doing it and what your profit actually is at, it could be significantly impacting your bottom line.

30:02Ron Sosa: And it's funny because I put a put up a video about that one time. It's like, hey, just as a reminder, if your profit is only at 10 percent, but you're you doing a 20 percent discount, you're actually losing money. And there was people, veterinary professionals who commented, how does that make sense when we mark up vaccines 150 percent? And I was just like, well, let me explain that to you. You know what I mean? Like the truth is people don't know how those numbers work. And so this financial transparency is what helps us teach it to them. I do think that that requires some teaching, though. Did you do any kind of like teaching when it came to to help them see that for every dollar, 40 cents goes to you?

30:36Ron Sosa: Like, how did you talk about this to your team in a way that allowed them to understand all of that?

30:41Maria Pirita: Yeah, it was very much similar to my P &L. So I gave them a, we did like a PowerPoint slide and it was a little table and it said labor, whatever the number was, and then percent of revenue. So I had the income, let's say we made$200 ,000 this month. And it was like, okay, our labor cost us X number of dollars. That was 43 % of our income. Our, you know, COGS was this, this was 23 % of our income, right? And then they can see at the bottom, the bottom line was now this is how much we profited. And it was like$8 ,000 on a$200 ,000 income. Right now they can go, oh, I thought you made a lot more than that.

31:21Maria Pirita: Right. Yeah. And so it gives you a different picture. And then it feels safer for the practice owner to be able to do that. Right. Because then they don't feel like they're creating competition with salaries. They don't feel like they're losing anything. I don't know. So to me, it's a much safer system of just giving here the five buckets. Here's the what we spent on those five buckets. And this is the percentage of revenue or the income that we actually received in there. And then this is my bottom line. And without shame, either direction, right? Like we had a great month and maybe have a bonus structure.

31:55Maria Pirita: And this is why the bonuses are the way they are. Or we had a really terrible month. And this is why we're not getting bonuses. This is why I'm not. And then all of a sudden, if you've got several months, six months in a row, this is where it gets tricky and you're down, down, down, down, down. It might be like, hey, we've had a loan, right? We took out a loan for a renovation and this is why and we're totally fine with this. But we can have those deeper conversations once they've had a kind of a visual look at what's going on, I think.

32:21Ron Sosa: Yeah, so true. How often were you having these conversations with your team?

32:25Maria Pirita: I did them with the staff meetings once a month.

32:27Ron Sosa: Once a month, like a monthly basis? Yeah, that's fantastic. I think when we talked about the numbers that were not necessarily the financial numbers, we did those on a weekly. But I could definitely see monthly for the percentages of everything else. I feel like that, to me, that's a really good number. When we were, as a practice manager, I think I was looking at those numbers on a weekly basis. So monthly would have been very doable.

32:49Maria Pirita: Yeah, as a leadership team, we did a lot of the numbers on a weekly basis. We did a lot of crazy, like, spreadsheets, surprised, with like, here's our scheduled labor. And this is the variance between what we had projected that we were going to do versus what we actually wound up having, right? And so we had a lot of those variance reports every single week that I would look at so that when I was trying to even out our payroll and trying to increase income in order to afford the payroll we currently have without dropping people, we were able to project better.

33:23Ron Sosa: So once the numbers are shared, how do you turn that into action instead of just information. Like I know that we're talking about doing it monthly. And I think they even, they think the mailbag submitter even asked this question specifically, they said, how do I help get the whole team to buy into small changes and improve efficiency without showing them data or having them a way to track our progress? So maybe you can walk through like how to do it when you do have those numbers. And then also when you don't have those numbers.

33:47Maria Pirita: Yeah. I think many practices out there, we tend to have focused initiatives like, Hey, we'd like to sell more heartworm prevention this month. It's easier now at the end of that month to go like, hey, not only did we sell more heartworm, great, right? Sometimes my team is like, oh, yeah, you made more money. It's like, well, here's the impact on the numbers now. It's like we spent more money on inventory and here's the tiny bump in the bottom line revenue. And while you may thought that was going to be a big impact because we sold 50 more heartguards, actually was a tiny little drop in the bucket, right?

34:20Maria Pirita: And they start to realize what we're trying to do is do lots of tiny little drops in the bucket to make a bigger impact. It's not the one thing that they're working on right now.

34:29Ron Sosa: Yeah, yeah, that's super smart. I was a big fan of that, of being able to go through some of these numbers and then creating an actual action item list out of it, right? Like, what does this mean? And I think that that comes down to a lot of really looking at the numbers, but also making a good action plan. So if we are seeing that our cost of goods For example, our percentage, maybe rose a couple of percentages. Like, what does that mean for the whole practice? Where can we, you know, buckle things in a little bit to help with some of that numbers? And so I think some of that is really coming to the team and getting their ideas on some of this stuff because they're a little bit more bought in.

35:05Ron Sosa: But also that way you're controlling some of the ideas because somebody might say like, oh, well, we can get rid of NextGuard entirely. And it's like, how do you think that's going to affect the patients then? right? Like we need to be able to kind of walk them through some of this. But I do think going over the numbers and creating some sort of action item, some kind of hit list is valuable.

35:23Maria Pirita: It just

35:23Ron Sosa: has to be relevant to what we're doing. And we have to be able to explain it to the team in a way that does make sense, right?

35:31Maria Pirita: Yeah. So when you have like an initiative, it's like, hey, we want to sell more heartworm prevention this month or the next couple, next three months, we can say, hey, our inventory costs are really high and we have all of this heartworm prevention sitting on the shelf because we buy in bulk and it's cheaper that way or whatever the situation is. It's like, here's the impact. This is what we want to get it down to. I don't know about, I think me, I'm competitive, but you give me a goal. I want to smash it. Most people want to smash it.

36:01Ron Sosa: We can make that goal about patient care.

36:03Maria Pirita: We can make that goal about the heartworm numbers. as we can make that, like whatever that is for your team, we can create the story for your team. But ultimately, the system is the same.

36:14Ron Sosa: Yeah, absolutely. I love that. Any other final thoughts when it comes to action items here? Like if you're the associate DVM in this situation, what do you need to be doing?

36:22Maria Pirita: Yeah, I think coming from a place of knowing why you're doing, I know I'm just going to harp on that. But like, why do you need to know coming from a fully vulnerable place and go like, this is what I'm trying to accomplish. This is what success looks Like for me, this is how I feel like I can contribute and help to this practice. This is what I'm trying to get to long term, whether that's a practice owner in the future, whether that's maybe I want to be a medical director one day and I really want to understand this more, whatever your future is, like most, most practice owners want to be a mentor.

36:54Maria Pirita: Most of them that I've met, like they want a mentor. Like, what are you trying to do? Let me help give you the pieces that feel mutually beneficial without being too scary to help you. And so I think just coming at it from this is what I need and why, right, to your point earlier about the why, and not just like, hey, I want open book, right? Like my friend Unicorn Clinic does it that way, so we should do it that way. You're not going to get what you want that way.

37:20Ron Sosa: Yeah, I so agree. I think being able to understand that why is probably really high on my list too. And then lastly, just understanding that I think the hardest part about all of this is that as much as I don't like getting no as an answer, that is a very real possibility. And you have to understand that at the end of the day, this is a practice owner and they usually started their own clinic because they wanted to have their hands in this and they might not budge. And at which case you have to tell you, you have to kind of explain to yourself, how important is this to me? Like, is this enough for me to want to go and start my own clinics that I do have the ability to move the needle?

37:56Ron Sosa: Or am I going to be able to live with this if they say, no, you're not going to get this access?

38:02Maria Pirita: Or it's like, what pieces can do you feel comfortable sharing?

38:05Ron Sosa: Exactly. Right.

38:06Maria Pirita: You may not get the whole book, right? But maybe you can get a page. Like what would be meaningful for you to move forward? And then also think about it from this perspective. You're asking somebody to open up their bank account, basically. How many of us want to share how much we have in our bank account with anyone else other than maybe our spouse? Yeah. That is the similar feeling when you open up your books.

38:30Ron Sosa: You believe that Uncharted is turning 10? That's right. Uncharted Veterinary Conference is celebrating 10 years and you're going to want to be there. It is happening on January 15, 2027 and registration is open right now. Unchartedvet.com. Hope to see you there.

38:44Maria Pirita: of your business to your team is like showing your neighbor how much money is in your bank

38:50Ron Sosa: account it's it's really like it's tough it is tough it is tough so i want people to understand

38:55Maria Pirita: like it is not a i don't want you to know how much i make necessarily it's like this is really

39:01Ron Sosa: deeply personal yeah all right yeah i think you're so right well thank you so much rom thank you so much for handling this one with me i knew you'd be the perfect one to talk to about this because I remember that workshop. You are doing such great work in Uncharted. I am excited for your confidence cohort to start up in September. I'm excited for Uncharted 2027, where we're celebrating 10 years. So if you have not registered for Uncharted Veterinary Conference, it is happening January 2027. It is open for registration. And I know we're planning some big stuff. I can already tell based on how excited our team is.

39:37Ron Sosa: So that should be a good time.

39:38Maria Pirita: And I get to talk about packing your backpack.

39:40Ron Sosa: hey it's gonna be a good one that's gonna be a good one i know that yeah all right well thank you so much ron of course thank you everybody else we'll catch you next time bye bye and that's it that's what we got i hope y 'all enjoyed this episode i know that this is tough this is as ron said it's kind of like imagine somebody being able to open up your bank account information and now they can see where all the money has gone it is tough and at the same time without some transparency, the team is going to make up stories about what's happening behind the curtains. And so there is something to all of this.

40:13Ron Sosa: I hope this episode was at least helpful in navigating your own clinic situations. And if you found this episode helpful or any of our previous episodes, y 'all already know, we love to hear from you. Submit in a mailbag, email us, comment on the social medias, leave us a review wherever you leave your podcasts. You really don't know how much it means to the entire team, everybody that puts the production together. And as always, a special shout out to the team behind the scenes. Dustin Bays, our sound engineer who puts on so much work. And of course, Tyler Herring, who helps put out all of the blogs and marketing materials that we need in order to move forward.

40:47Ron Sosa: So thank y 'all. Thank y 'all for listening. Thank y 'all for being here. Thank y 'all for sticking around all the way to this part because I didn't even expect you to. So thanks and we'll catch you next time. A brand new course is now available from the Uncharted Veterinary Conference team. Don't Get Sued is an on-demand eight-module course that we've created in partnership with HR expert Debbie Hill to help you answer the question, why do veterinary practices get sued in the first place, and what can I do to protect my team? This course is available now for$2.99 and is free for Uncharted members.

41:20Ron Sosa: You can find out more now at unchartedvet.com.