Welcome to paws, claws and wet noses. The vet podcast, celebrating all creatures great and small. And the fantabulous professionals who look after them. All. This is episode 53 and I'm at your show host, Julie south today is part one of two parts where I caught up with Paolo Lencioni who's a companion animal.
Turned computer programmer tuned, practicing accountant, stay tuned this week and next week to hear Paolo . Talk about what surprises his specialist, veterinary clinic accounting firm witnessed and Australia and New Zealand clinics pre and post pandemic lockdowns. The difference between first and third world.
The clinics, what showed up before and after lockdown and the optimal consult time from a productivity and a profitability standpoint,
an old vet told my father when he was a student in Glasgow. He said, if you want to be a success in veterinary practice, Just to keep the bubbles open and just arrested.
God, nutrition is not an opinion. It's a science. They called me that weird herbal needle that, and I just remember thinking, well, I'm still going to do it because I know it works. And I've got the research to back it. Um, reminiscences of the real James Harriet son to P Nutrish. To acupuncture, the bit podcast discusses current animal health issues from around the world.
I'm veterinarian, Brian Gregor from New Zealand, just search for the vet podcast, wherever you get your podcasts from.
If you've been listening to paws, closing with noses for awhile, you may remember that back in April, April, 2021. I had the pleasure of catching up with Dr. Steve merchant of individ. If you haven't caught up with the episode yet, which is number 25, I'll put the links on the episode page for this show at paws claws, wit noses dot F M back then Steve and I talked about indie vets.
We're independently owned vet clinics can go for among other things. Collaborate. In September of this year, Steve sent me a white paper report that was commissioned by profit diagnostics. One of Polo's businesses who we're talking with later today together with virtual vet nurse, which is one of Steve's initiatives.
The report is entitled. The impact of the pandemic VIT clinics are busier, but are we treating our patients better or worse? If you haven't read the report and you'd like to then please visit episode 53 at paws claws with noses where I'll put the link where you can get to redirect you to get your free copy in Q1 last year, 2020, when COVID 19 first emerged veterinary clinics throughout Australasia and indeed the world where apprehensive.
As with all businesses, no one knew how the pandemic would play out. We still don't or how it would affect our communities, our society, and our livelihoods. Within the first 30 days, it became clear that veterinary businesses weren't being negatively effected. At least not financially. Instead they experienced a notable spike in demand for services.
This trend has continued in varying degrees during the ensuing 2021 lockdown periods and Australia and New Zealand. This has raised a number of key questions, which is what the report addresses and those questions were what's driving the increased demand for veterinary services. How long will the trend continue?
What are the in clinic impacts of increased levels of business? What's the correlation between revenue and profitability. What's the impact on clinical standards and patient advocacy. And how can clinics address this to create a win, win situation? As I said, that's what this episode and next week's looks at the results of these findings.
Plus the answers to other questions that I asked to Paolo. You'll hear him mentioned a webinar that he and Steve, Steve merchant did together. If you'd like to watch that webinar, then please get in touch with Steve as that was an indie vets webinar exclusive to his members and his email address is info.
Indie vets.co.nz. Paula also mentions other webinars that has consultancy from here's. The last one he held was with approximately 50 bits across Australasia, discussing environmental end pandemic issues and strategies, which is pretty relevant considering that well, for me, since she considering that the last few episodes that of postcards with noses have been on sustainability.
It's well worth listening to, and you can attend by donating a few dollars so that polo can plant a tree. And again, I'll put the link to that on episode 53 at paws claws, witnesses dot. If. Pause claws and wet noses is sponsored by vet staff. If you've never heard of it, staff it's new, Zealand's only full service recruitment agency.
100% dedicated to the veterinary sector and fit staff has been around since 2015 and works nationwide from Cape Reinga to the bluff and everywhere in between as well as helping Kiwis VetStaff also helps overseas, qualified veterinarians find work in Aotearoa New Zealand vetstaff.co.nz.
Steve tells me you're a vet, a vet who isn't a numbers now.
Yeah. So actually, well, actually it was my wife's idea. So my wife and I were both at resurgence. We graduated in South Africa a long time ago, went to the UK for working holiday. And then after working there for other people for about three and a half, four years, we decided to open up and record practice in the UK.
And we had that for about seven or eight. Whilst you were running the best practice we thought, oh, we don't really know how to run a business. So my wife actually did an MBA first through Edinburgh university, and I did a computer, like a computer of skin guilds qualification in computer programming. And then like we both found my wife's MBA curriculum.
Quite interesting. So we enrolled in accounting and we set out to do an accounting degree for giggles as you're doing. And, um, so we started competing our accounting degree. Then we decided we wanted to immigrate to Australia for lifestyle reasons. Like the UK just wasn't for us, it's too cold and wet. So we sold our practice and came over to Australia, basically qualified as accountants and said, Hey, let's try this accounting thing.
And then did exactly like we did for our fourth best worked for other people for a short while and mental pain. Maybe we should have our emphasis. So we opened up an accounting firm. I mean, Australia for vets only. So we don't service any other business at all. We just do that real businesses sort of be business and is great.
I'd love to have another podcast with you, but today what I am specifically interested in is the white paper. And the data that you've produced over the last, however many months, it's the white paper that Steve Mitchell. Yeah. Sent to you.
Yeah. Yeah. I can discuss it. I can give you the whole story behind it.
Initially we, over the last seven years been, um, been developing, so we have a software arm to our business, but one of the challenges in veterinary in the veterinary industry is no one's really had a stable way of measuring the performance of their three businesses. It was always one of our frustrations.
When we started doing a lot of business advisory work in the veterinary space. So we had to have a software product that actually consistently extracted data out of the various practice management software systems that are out there. And paradoxically, even though the very profession is one of the smallest professions in the world.
It's probably got more software systems than any other profession, which means whatever report. Like if you're. It's your practice like, Ooh, maybe you don't have enough clients or maybe you're overstaffed. Like you need a consistent report to come out. Cause everything coming out of one practice management software, wasn't the same as another one.
So there wasn't a consistency applied. So we spent a lot of money and not at a software branch job business where we have a product, a software product called profit diagnostics that actually extract data from all the mainstream practice management software systems in Australia and New Zealand. And then actually puts it into the cloud.
Cleans and mixed all the same. So regardless of which practice management software system, you're on block, it normalizes everything. So it's identical. And at the same time, we also the same software. It actually pulls data from their accounting software, which can also be spread over a lot of different types of packages.
It can be mild, it can be zero, it can be QuickBooks and also puts it all in the same place. So now we have their general ledger information and their point of sale stuff all in one place. And then we can have. Formulas and logic over there. So we know exactly how every businesses is performing and we can advise accurately on how they're doing.
So it started with that for advisory services. Then COVID came along and like an, an asset because you, gee, what's going to happen to the equity industry in what's going to happen down business. Cause like everyone's going to get broke by stop you there.
Can I just stop you there? I got two questions. One is you have a software as a server.
Yeah. So software as a service, basically, you sign up on it online and it's a cloud-based system that connects your practice management software system, like all the different hops. So you've got an API, is that right? Yes. Well, yeah, effectively, not every single stuff. Every software system has an API right in New Zealand, easy Viet squat and IPR, which is really, really nice.
Actually. It's probably the only one that's got a formalized API. Dave systems. We have ways of pulling up the data, but it doesn't automatically, it does it every 24 hours. So we don't expect anyone to be uploading spreadsheets to us. We actually have a live feed of data coming into our system every 24 hours from every practice.
So when COVID came along to question two, sorry, the question was before you tell me what happened. What were you expecting to happen? Well, we were expecting the investment industry to take a dive because we thought, well, spending on pet is discretionary. The economy's going to tank and very, very possibly like.
Putting the hurt bottom. And the other thing was we did, we did anticipate, and this is actually true for New Zealand is regardless of the increase in pet ownership. If the government enforces a strict lockdown, whereby veterinary practices are only allowed to do emergency services, they can't physically run at a profit.
Even if they have a lot of customers that didn't happen in Australia because the lockdown in Australia was. Let me practices we're allowed to remain open and business as usual. So there was a little bit of a disparity there in terms of, uh, of what actually happens during a lockdown. But our general take was like, okay, we're going to have to like, think about how we going to help our customers through this period and make our services, which before were the relevancy was on less.
Better practices more profitable. Now the relevancy was like, Hey, what's happening to my business in this very, very volatile period. So we said, well, we've got all this data coming into profit diagnostics, the software already, so we can aggregate it instead of doing it for one clinic at a time, we'll just put it all together.
And actually we can automatically just work out what's happening across all our. Which is spread quite evenly across Australia. Then we have a bunch of people in New Zealand. We have a bunch of people in Hong Kong. See what's actually happening to the veterinary industry. They're much to our surprise within one to two months of going into COVID.
We actually started to notice that the veterinary industry was actually starting to do quite the opposite as to what. We were expecting. So we had put in place all these things to make it easy for our customers to apply for their government rebates. If their revenue had dropped by 30%, et cetera, et cetera.
Realistically, none of our customers actually literally legitimately qualified for that. None of our veterinary classes. Dropped in revenue by 30%. In fact, none of them really dropped all of them went up. So we quickly realized that things were going to get okay for the veterinary industry in, uh, under COVID.
And we were able to notify our customers about this, which gave them quite a big advantage because we had scenarios where we knew a bunch of non-client Vetri practices. Willfully shutting down their business so that they could actually qualify for the government rebates and just play it safe. But what was happening to those practices was they were actually losing their Goodwill because whilst they were shutting down only offering partial services, that those customers were all just running off to practices that were staying open.
So strategically we could tell our customers like the right decision at this point in time is to stay open, try and operate business as usual, as much as possible if your government allows it and carry on servicing your customers. Okay. Boom. Boom, boom, boom. So that went on for, probably for about eight or nine months.
Then I think we started around April time. April may, all of a sudden then come came December time. We started getting very different feedback from our customers. Everyone started saying, gee, we feeling really, really busy. Our staff express, we just struggling to get through the workload. There were also added challenges.
That in some cases with the lockdowns, you were allowed to be open business as usual, but you weren't physically allowed to have the customer in the consult room with you. So pets have to be fetched from the car. The consult takes a little bit longer and so efficiencies were lost. A little bit practices were moving.
Revenue was up. Number of patients was up. So they were seeing more pets. Number of clients was up also. So everything was going okay. So the complaining started in December and then we decided to start, and this was actually more by coincidence than, than plan. I'd always wanted to measure patient advocacy on a population basis.
In other words, define what that means for you. Yeah. So basically, if you have a population of say, like coming to your practice, a population of 3000 pets coming to your practice, what percentage of those pets actually receive a dental scale and Polish in a year? And what percentage of those pets are.
Receive a primary consult or coming for a primary consult in a year. So start looking at these key services that are critical to animal health. So more than looking at the money, we look more at how well you are treating your set. Patients and whether you're running your practice, like a first-world practice, where there's a lot of preventative medicine going on, like a lot of blood testing, a lot of dental care, a lot of repeat consultations and revisits versus a third world practice where you're just very reactive, but you're seeing a higher volume of clients and not really treating them quite as well.
And we'd always wanted to do this even pre COVID. We just hadn't had the time. So for the first year, for all our clients this year, we just started measuring that population. Statistic. And we then retrospectively measured it for prior years and we could actually see that over COVID whilst they were getting busier.
The percentage of the population receiving things like dental care or general anesthetics was actually going down. So although they were busier, they were making more money and things were looking good from a financial basis from April. Care perspective. The bull was definitely being dropped in terms of, you know, primary health care.
So we started looking at addressing this and actually started making this very, very public. And whilst we were doing this week, we actually expected the primary victim of a decrease in patient care because it always has been historically innovated industry is when beds get too busy historically.
Dentistry. Like, because they see it as an elective procedure. We said, what were the first thing we'll see is we'll see dental starting. And they don't like doing it. And they don't like doing that. Some of him, but actually the primary victim of reduced care was the primary consultation. That was the first market we saw where the percentage of the population pep.
Was receiving for your primary consultations. Then we interviewed a lot of our clients about this and we actually found the problem is that there is a bottleneck now in the veterinary industry around the primary consultation, they're not able to consult quickly enough. They differing appointments.
There's often a long wait for an appointment, maybe two or three days. So then the client either don't come in for that appointment or maybe go elsewhere for an appointment. But definitely that was the first victim then dentistry, then general anesthetics. But we actually started to see a gradual drop in the population, receiving these services from December and continuing now over the last few months, even as of last month, when we measured it certainly a drop in the quality of care delivered to pets.
Clients have to wait and New Zealand, I've heard that they have to wait, wait. Yeah. And it's, it's really lucky in, in like our practices in Tasmania. For example, there is a limited number of practices in Tasmania, and they've always been very reliant on fly in, fly out locum services. Now those locals have been too scared to travel or unable to get into Tasmania because Tasmania has been keeping their borders very, very closed.
So what's happening particularly Tasmania is the same thing is, um, you know, people are booking in for an appointment and they can't be seen for long periods of time. It's not ideal, uh, from a. Animal care perspective. And we all, like, I know we're accountants and we look at money, but the funny thing is, and like us we'll have to, I will never found a practice where this doesn't happen, but if you actually treat your patients with the best care possible, your profits just follow your profits is a result of good patient care.
So really we don't really have to talk about the money that much. We just have to make sure that all the right treatments are given a good care is delivered. And then importantly, the only money part is that. Do the care you do the blood tests and you charge for them. And if those things happen, then the practices become, become quite profitable anyway.
So you don't have to fleece or steal money from owners. You just have to deliver. Can I introduce you to Dr. Jocelyn, if you're listening. I mentioned when, when you and I first started emailing that I had interviewed a vet and Rockhampton her clinic, they had pre lockdown. Business. And the old world was 15 minute consults for the lockdown.
The very short lockdown that they went through and Rockhampton. She extended them to 30 minutes. And then when the lockdown was finished, she went back to 15 and her team said to her, can we hold on to this 30 minute consults place? And she sort of went. Okay. She has not looked back. Yeah. And that's the thing is if you can, if in that 30 minute consult, it means you can deliver better care.
And it means you can spend that time looking at the dental care of a patient and making sure you actually detail that properly to the customer. So they actually agree to have that dental treatment done as well with while having the 30 minute consult, there is quite a mixed bag of opinions around. I must say we have a big spread across our client base.
I would say 15 minutes is too short. I would think if you speak to someone like Alison Lambert, she'd probably say 30 minutes is a little bit on the long side. So 20 to 25 minutes is probably the sweet spot, but we have high net profit margin practices operating on 30 minute consults. It's just, your team has to be that kind of a team that's very comfortable about promoting.
Optimal care. If you've got a 30 minute consult, you're an optimal care practice, not a practice that just tries to get through a lot of patients. So you have to have that piece in place. Do you have any data with your long consult clinics for profitability versus the. 10 or 15 minute consults. We actually have high net profit margin practices on shorter consults and on longer consults practices are significantly different.
So a short consult practice is what we would class a high throughput practice. So they actually do, uh, they have a high throughput of patients, but they don't deliver. The number of dentals to their set population of animals. It'll probably be half of the dental care delivered to a practice that has steady minute consults.
So from that perspective, it's a different type of business model. You run your 15 minute consults. You generally per, per client or per patient, you actually have your vets and they get through a lot more work. And historically these tend to be. Large established practices, maybe six feet plus they'd been in the air for about 20, 25 years.
And they've just got a high volume of clients just coming to them from when we've picked them up as clients they've been there already for ages that we've had a high volume of clients coming to them and they operate at a high net profit margin too. So it is possible to have a high throughput model. I think if you were a startup veterinary practice and you were starting a fresh, I think it would be very difficult to rapidly get enough clients to actually deliver that kind of a service.
So you tend to be more on the higher price, longer consult. What other surprises or insights did you get from the data, the report that you rang the CFA? Yeah. So, so one of the things we did was we, one of the things we were interested in is we knew there was a lot more work being done about new practices.
So we wanted to establish whether, or it was households with existing pets, getting more pets like we did. We got another one. Just because, because we could, or if, whether it was people becoming new pet owners. So when we looked at the data, we could see because the number of patients and the number of plants was actually increasing in the same proportion, the assumption can be made from that, that it was actually households without pets actually getting pets predominantly.
So you pet owners coming into. The realm of pet ownership, which for us was quite important because if it's an, if it's existing pet owners getting more pets, you don't have to do a lot in terms of marketing because they're already using you. So your existing clients are getting more pets. If it's people becoming pet owners for the first time, then that is relevant because they're looking for practice now, which is why the strategy.
And this is again, is registered. Probably water strategy to operate business as usual and stay open if you had the choice to actually work quite well for our clients, because these people got a pet and they said, oh no, I need to take the pitch of it. XYZ is closed. Oh, that one's open. I'll go to that particular, um, veterinary practice that kind of retrospectively answered that question, but also answers it from a marketing perspective.
And then we were thinking, okay, now you're going to have to market more to, because he's a new pet owners, but the reality of the matter is then we came to December and everyone was too busy. Alrighty. So the last thing they want to do is register more and more and more pet owners. What they're doing now is actually looking at registering high value pet owners.
So they give them a value statement when they register a patient and say, this is the top of practice we are. We like to promote dentistry, whatever you might not fit into our practice, that's fine. But then we're not the practice for you. If you're not interested in that kind of case, that's sort of like being more selective as to who they, who they sign on to their services.
Dr. Jocelyn and Rockhampton. She is very clear on who her target market is on her. Yeah. And that's important in the state. Like, again, this is, this is kind of, we were thinking of doing it a different way, but then when we came to December and. Uh, people were just getting too busy. We thought actually a better strategy.
You have to see, you see how quickly you have to react in this kind of volatile environment. We've had to change tech quite a few times, but we've always done it based on data and information we have from data. And that means you have the correct. You make the correct decisions. So now knowing that better getting too busy quality of care was being.
Probably registering as many new clients as you can in an understaffed metric practice is probably not the best tactic. It's probably going to be more like, okay, I'm going to try and register the good ones and turn away ones that are just not interested in high quality care. If I'm a high quality care practice you showed the data to your clients.
What was the. Reactions or responses, the reactions or responses where they actually, because our clients actually get data feeds also automatically from us. There was no surprise in our client base. It was exactly like us first, like, Hey, we're all going to go broke then. Okay. We're going to measure this really carefully.
Just make sure you don't lose revenue. And then within a month it's like, we all, we all knew. It's like, we're not going to go broke. We're actually getting this year. So there was no. Fry's I think that's the other thing about having bad kind of information is like within a month or two, like there was a nice surprise across our client base.
And then it was, Hey, all those special reports you're sending us whether or not we qualify for the government bailouts, stop sending them to us. We're not going to call. We kind of get that. We're not going to fall apart. We're not going to bug you about it anymore. So there's another advantage of having that kind of like information coming in all the time.
I think it's important in an industry. Because we were in, well, another lockdown now, the first lockdown we had last year, I have heard of clinics refunding the government subsidies because they thought like everybody, and then you pay it back. Yeah. Yeah. So even as an accounting firm, our valuation component of the business, because we do a lot of business valuations.
So we also partly involved with bad Yvette and that the valuation business. One or two months of COVID absolutely tank, no one wanted their business valued value, better qualified for rebate, which we got for that month. And then we'll refund it because the nutritionist, the backlog will that happen. All the valuations that would've come in in those, in those two months, um, actually ended up coming in in the subsequent months.
So we were actually busier than we expected to be afterwards in terms of business valuations. So that also is an interesting thing in the veterinary industry is the buy sell market now because we are heavily involved with. To, to business valuations and Bhosale deals a week at the moment last year we were doing about one a week.
The buying and selling marketing, they can fax is very, very active and not in the corporate space. It's um, in many cases it's employed best. You actually want to buy in or purchase a small practice themselves because they've realized that actually this business isn't a bad business to be in during this kind of period of time.
Things are going quite well in a bit. Interesting. You say that because I've just found a. Position for a beat who we're just talking the finer details now of her employment agreement. And one of the clauses that we'll be adding in is that when the current principal comes to say, This candidate wants first right of refusal.
Yeah. This is very common. We're getting this all the time. It was quite different. Uh, you know, 18 months ago where people were holding out a lot to sell to corporates and the corporate market was quite active. The corporate VIP practices didn't seem the large vacant practices didn't seem to do as well over the COVID period as privately and practices.
And. But it seems to me that the purchasing of corporates actually slowed down a little bit for quite a long period of time and just independent private buyers or sort of popped up and were interested in buying equity practices. Was that a surprise to you? Do you do lots of corporate buyouts? There's an advisory firm.
We service very little in the corporate space, but when it comes to buy sells, obviously you ended up dealing like you often have a private practice who's selling for corporate. So we know. The volume of corporate sales purchases just through our regular client base and the valuations we do. I think from an advisory perspective, corporate practices often have their own.
CFO full-time CFO, chief financial officer on site, a lock for the corporate. So they don't really require advisory services. So we only really come across only rarely come across corporates when it comes to buy sells. That's how we kind of gauge that segment of the market and can see what's what's going and what's happening.
Was this turnaround, was it a surprise for you? Th that the private sales started or prior investment. Yeah, it was luckily a lot of surprises here. Hear some of those surprises, but I mean, this, this was like, this was not something we would have said at the onset of COVID. I suddenly private buyers are going to become more interested in vaping practices.
Like I said, for. The evaluation business that we, we joined and we were, it went really quiet for the first few months and we thought, okay, well, luck that business is actually going to go really, really quiet over COVID. It's not going to be busy at all. And then it was a surprise. All of a sudden the valuations just started coming in, in great volumes.
And what we'd done in the prior year, sorry. I mean, you can't lie. That was a surprise. We wouldn't have been able to predict that. Brought about that may have mentioned it. I think what happened was initially, initially people were really nervous about COVID and then suddenly people working in practices suddenly saw how busy the practices were.
We're getting. And I thought, okay, well actually I am business owner material. I do eventually want to innovate your business. And now it's probably a good time to, to buy into a veterinary business or buy. I practice from a retiring practitioner. I think that was, I would guess that was the catalyst for it.
They suddenly thought, okay, well this is not too bad. A gig. If I want to be a business owner, I need to be businesses. It's better than owning other businesses currently, uh, in this kind of this kind of environment. So I think that's what spurred it on. Yeah. You know, so the demographic bias changed and the fact that there was mobile sales, those were surprises.
The other surprise, you mentioned before, suddenly the business industry got busier and busier and busier, and then the other surprise, but we measured it and we detected it was, you know, patient care started to drop. These are all surprises, but it's good to have surprises because you measuring stuff, then you have a surprise and say, okay, that has been happening for three years.
And I've only realized it now. So all these things, like, I don't think anyone when COVID came out, I don't think anyone could have really predicted which industries would boom and which ones wouldn't. I mean, maybe not the retro scopes, a powerful instrument, like obviously the booze industry was going to boom.
Right. But I think the boost people realized that, you know, so, and the gambling industry, the online gambling industry and that sort of stuff, but like, I don't think anyone could have said, like I'm a hundred percent sure that one's going to do better. You mentioned just now the demographics changed yeah.
From the, from the bias bias perspective. Um, yeah. Yeah. A lot of younger people interested in Vetri practice, which is great. And also non-corporate bias. Yes. A lot of our bias now, which is actually really exciting because I like to see sort of, you know, people in their late twenties purchasing of every practice.
I think it's a great age to guarantee the business because you've got sufficient time Ben to actually become like a high income earner and actually have a good. Life in veterinary business and actually actually, you know, make some money out of it. So, um, it's, it is, it is interesting to see that there is a lot of younger buyers out there.
And in spite of what people have to say about the millennials, the ones that do want to become business owners are actually fantastic. We've got a bunch of people. Startup practices. As most people are a bunch of millennials switching startup practices. Now they're just starting on their own. They just fantastic at getting customers in the door and building up a business really, really quickly, so much faster than what my age group was because they're active on social media.
They have raised with like 600 pet owners already on social media and they immediately seem to have a customer base from the word go when they get Gary. So that's also kind of interesting in your business. Is there a difference between Australian income and New Zealand? Very, very slight a negligible difference between.
So like, if you look at the vault, even like the volume of dentistry that a vet veterinarian does, the average veterinarian does, it's identical in Australia, in New Zealand and in the UK. Almost identical from a revenue perspective and profitability perspective practices are, if you look at the exchange rate or pretty much the same also, so you can actually have a KPI set or benchmarks that pretty much service that those three geographical zones, I would say, practices in America are slightly different.
The consumer in America does is it's easier. I think to get the consumer in America to part with their money. I think these are a little bit higher there and the revenue. But that is higher in America, but Australia, New Zealand, UK, the KPIs are very, very similar from like revenue perspective and volume of work done.
Are you able to share what their revenue per visit target is? A good target? Yeah, actually I'm so exclusive of GST, the revenue per bed. Currently this year in Australia. Just over $500,000, about 500, $10,000 Australian dollars. That's exclusive of GST in New Zealand is fractionally lower in the high four hundreds, close to 500,000 in the prior year, it was only around $480,000.
So revenue per bed has gone up in the last year, but roughly around 500,000 Australian dollars, 500 to five and 10,000 Australian dollars per year. It is a factor of salary as a moderator. We've done a whole webinar on wage multiply. So wastewater applies strict wage plus actually don't work and there's a whole sort of one hour piece on that as to why they don't work.
So if you're actually using this, this magical fi you know, a vet has to earn five times their wage, what ends up happening if you actually. Through the, now, if you run through the numbers is you end up overpaying your low revenue producers and underpaying your higher revenue producers. A good example would be we have employed vets who are generating an excess of $700,000 a year.
You can afford to pay those bets over $180,000 a year and still run at over 20% profit. But if you apply to a strict, if you apply to a revenue wage multiplier of $190,000 to your a roughly $700,000, you'll see, you'll see that it doesn't multiply five times. So your five times wage multiply actually, doesn't it kind of puts everyone in the middle and makes people middle America.
So revenue, wage, multipliers are, we don't like using them for that reason. I do know some, some clinics that ha that use debt and. They have found that their vets preferred to salary sacrifice. So go low on the salary, thereby always meeting target and air quotes. Yeah. And then the bonus and air quote.
We'll be really good. Yeah. That's extra reminded me of another surprise. Well, maybe not surprised, but you'll probably also been aware that like wages for bets have gone up exponentially over the last year. Probably I would say 15 to 20% when we look at our numbers this year increase in wages across the board in.
With researchers, they're producing a lot more revenue though. Actresses have in general become more profitable across our client base, but they're having to pay their team a bit more. Um, so wages have actually gone up. So that's the other thing that happened. And again, we wouldn't have been able to predict it that only happened because of industry did well.
And because obviously there was a shortage of vets because there is a certain percentage of like new Zealand's also relied on, on a certain influx of best from other countries.
But you've all come them. Your government has made it so easy. For vets to go into Australia, the number of European vet, British and Irish and Scottish fits. I have lost to Australia because your government says, Hey, come in. We'll make it easy for you. Whereas ours it's now. Yeah, the made easy from a, from, from the visa perspective that made easier from the, unfortunately they stopped the quarantine.
So I think a little bit more holding, holding it. Yeah. We still got quarantine here too. With your clients, your Australia, New Zealand clients. Is there a difference and salaries or wages paid because on this side of the Tasman, it appears that your vets and nurses, nurses, markedly. So in a truckload. And LSP.
Yes. I thought if we look at the individual wages, I would say the wages are slightly lower in New Zealand. That said, if we actually look at wages as a percentage of turnover for a practice, it's not significantly different. So I think what ends up happening is you might pay a little bit less, but then you end up employing.
More staff like roughly, if we include superannuation in Australia, wages is makes up 42% of your turnover. It's very similar in New Zealand, but we're not. I have actually looked at individual payrolls and what bets they're getting paid. It does appear to be slightly less. The other thing that you guys have got, you don't have to pay as much super.
Our superannuation has gone up to 10% now of wages. So if you're paying someone a hundred thousand dollars as a wage, then they get $10,000 into their superannuation. You guys have got Kiwi your Kiwi super. What is it now? It's anywhere from three, I think to 8% percent. Yeah. Is that, is that elective?
Actually, I don't actually know that much about it, but if you elect not to, as I understand it, if you'd like not to do it, you have to have something. Yeah. Okay. Yeah. And it is only for citizens or residents of New Zealand. So there is a less RST pay to pay that in, in New Zealand. Anyway, I'd say you don't have to pay as much, but I'm still the way just still, if you include that the wages will come in at about 40, between 40 and 42% of turnover, which shows the, either the productivity slightly lower or there's more staff per client available service those clients.
So the practices still seem to run it around 40, 42% wages, average. Average English study out that actually, no, that haven't committed that one to memory, but because the practice have pretty similar, I have a feeling if it's roughly the same, I hope you found that helpful. And then it gave you some ideas on what to look at from a numbers perspective inside your vehicle.
Tune in next week. Of course, if you need help, go to your accountant tune N next week, where you'll hear where the best performing vet clinic is. That's a first thing that we kick off with next week from all of Polo's clients, which span multiple continents, you might be surprised. And remember to click that follow button, if you haven't done it yet on your podcast platform of choice.
So you never miss out on a future episodes because they'll then be delivered straight into your podcast feed. Upcoming episodes include sustainability with Zoe meatus and the strand veterinarian, as well as your employment Q and a with stiff diabetic, we're still working on getting our diaries, lined up for them.
Thank you for listening. Thank you for getting this far. Take care. Here's to wishing you a fantabulous day so that you can go out and be the most amazing version of you that you can be. . God bless paws, claws and wet noses is sponsored by vet staff. If you've never heard of it, staff it's new, Zealand's only full service recruitment agency.
100% dedicated to the veterinary sector fit staff has been around since 2015 and works nationwide from Kate rehang it to the bluff and everywhere in between as well as helping Kiwis fits. Also hubs overseas, qualified veterinarians find work and Arturo and New Zealand fit. staff.co dot. Indeed. .
