A Letter from Dr. Parker: Practice Fees in the “Goldilocks” Zone

Routinely I run across DVM private practice owners that have thrown their hands up in frustration over their inability to compete with corporate entities for A-player DVMs.  The good news is that you can compete by offering competitive salaries. But there’s a catch.

 

Here it is:

90% of practices I’ve consulted over the last 20 years simply do not charge fees high enough to be commensurate with the buying power of the communities they service. The result? Sub-optimum revenue, struggles to meet expenses, losing good staff to better paying corporates, and importantly an inability to offer competitive salaries to attract A-player DVMs.

 

The solution? Set your back-end fees (medicine, surgery, dentistry, diagnostics, etc.) to be in what I call the “Goldilocks” zone – where the fees are not too hot (hitting customer price resistance) or not too cold (unable to offer competitive salaries) or “just right” where they are fair to your clients and fair to your practice.

 

In 2008 I developed a workable fee model to hit just that “Goldilocks” zone of comfort by comparing your Average Client Transaction (ACT) of the practice to the Median Disposable Income (MDI) of your community. Using the MDI, as a baseline marker of the purchasing power of your community, I tested a formula that adjusts your back-end fees to this and puts them in that “Goldilocks Zone”.

 

(Note: as every community is different, the MDI’s can range from $20,000 to $200,000 a year of Median Disposal Income. Thus, there cannot be one fee schedule that works for every practice.)

 

The result? Thousands of private practices with correctly set fees and increased left-over revenue (profit) used to create competitive salaries and help DVM Recruiting Services to attract and hire great associate DVMs.

Dr. Joel Parker is a veterinarian, entrepreneur, speaker, author and champion of private practice ownership. He created the “Owner-Independent Practice™” management system, along with Veterinary Endoscopy Solutions (“fiberoptics for unusual places™”), a mobile referral endoscopy service, and Canine Equipment (Gear Fer Dogs™), a high-end line of dog training products and accessories. In 2004, Parker founded Veterinary Practice Solutions, a private consulting firm for veterinary private practice owners. He exited that group in 2024 and founded Parker Business Systems, a small boutique-style consulting firm with a focus on private practice owners.

Do you need help with finding associates to join your practice? We’ve been in the recruiting business for more than 30 years, and since 2020, We have submitted over 600 veterinarians to over 200 privately owned clinics. We understand the special requirements of finding the right doctor for private practices, and my team has consistently put our method to work for our clients, resulting in an 88 percent success rate in presenting quality candidates within the first 90 days of the recruitment process. Allow me the chance to explain how we can find the right match for you and your team.