Navigating Tough Conversations with Your Practice Owner: Financial Management

In veterinary practice, managers are often the glue holding the business together, from organizing schedules to ensuring bills are paid on time. But what happens when financial tensions arise, especially if they stem from decisions made by the practice owner? This is a delicate and complex situation for practice managers who feel responsible for their clinic’s financial health but may not have full authority over how funds are used.

Dr. Sue Sayles, an experienced veterinarian and practice owner, shared her insights on how managers can approach tough conversations with owners about finances. Here’s a comprehensive guide for veterinary practice managers on initiating these conversations respectfully, navigating potential challenges, and making the best of this learning opportunity.

1. Set the Right Headspace

Reflect on Your Role and Responsibilities What is your role as the practice manager? Are you tasked with managing day-to-day finances, or are you expected to provide input on larger financial decisions? Take a moment to review your job description and responsibilities. This self-assessment is crucial as it helps you establish realistic boundaries and expectations for the conversation.

Understand Your Practice Owner’s Perspective Dr. Sayles emphasized the importance of empathy in understanding the owner’s viewpoint. Many practice owners, especially those who are newer or lack formal business training, are learning as they go. Financial priorities can shift unexpectedly—personal expenses, such as student loan repayments, children’s tuition, or unexpected home repairs, can sometimes take precedence. Approach this from a position of understanding and curiosity about the owner's needs, rather than judgment.

Find Common Ground Before you start the conversation, identify where the common ground is between you and your practice owner. You both want the practice to be successful and patients to be well cared for. Common ground provides a foundation for the discussion and can ease tensions as you approach how actions or decisions impact those core values.?

Ask for Permission to Talk Finances A respectful opening can make all the difference. Ask the owner if you can discuss some financial concerns to ensure the clinic runs smoothly. This gives the owner the choice to engage and prepares them for a constructive conversation. As Dr. Sayles noted, asking for permission allows the owner to feel in control, making them more receptive to feedback.

2. Prepare and Present Factual Information

Be Specific and Stick to the Facts Use specific examples that highlight financial challenges without implying blame. For instance, you might say, “Over the last three months, I’ve noticed that our account balance has dropped significantly after certain withdrawals. It’s been challenging to cover essential expenses like payroll and bills. I wanted to bring this to your attention to see how we can address it together.”

Use the SBI Approach (Situation, Behavior, Impact) When discussing your concerns, try the Situation-Behavior-Impact (SBI) approach to keep the conversation neutral:

• Situation: Describe the scenario factually. (“Over the past few months, we’ve had a few instances where our account balance was very low.”)
• Behavior: Identify the specific actions or trends. (“I noticed a pattern of withdrawals that affects cash flow.”)
• Impact: Explain how this impacts your role and the clinic’s financial stability. (“It’s difficult for me to manage finances effectively, and I worry about covering payroll and other essential expenses.”)

Normalizing Challenges Can Help Ease Tensions Reassure the practice owner that financial challenges and cash flow concerns are normal, particularly for small or growing businesses. This helps them feel less defensive, allowing for a more collaborative conversation. Suggest that addressing these issues could strengthen the practice’s financial foundation and improve long-term profitability.

3. Identify the Core Issue: Ability or Motivation?

When it comes to financial challenges, Dr. Sayles highlights two potential scenarios: is this an ability problem (they need to take the money out of necessity) or a motivation issue (the owner may lack awareness or financial discipline)? Tailor your conversation accordingly:

• If it’s an ability issue: Acknowledge that personal expenses are sometimes unavoidable. Offer to brainstorm solutions, such as budget adjustments or finding additional revenue streams.
• If it’s a motivation issue: Help the owner see the bigger picture by discussing the benefits of reinvesting in the practice, building cash reserves, and improving overall stability.

4. Suggest Solutions and Set Boundaries Together

Invite Collaborative Brainstorming Once you’ve laid out your concerns, invite the owner to collaborate on solutions rather than presenting your own as definitive. For example, “Would you be open to brainstorming ways to keep a minimum balance in our account, so we have some financial cushion?” This invitation promotes teamwork and avoids a top-down approach, which might feel like criticism.

Discuss Systems for Accountability To create a sustainable financial strategy, suggest implementing a system that fosters accountability without adding extra stress. For instance:

• Setting a monthly threshold for cash reserves.
• Agreeing on a process where the owner gives a heads-up before large withdrawals.
• Establishing a protocol for financial reviews to discuss profit, expenses, and budget allocation.

This transparency allows you to stay informed about the practice’s finances, enabling you to make better management decisions while respecting the owner’s autonomy.

5. Approach Every Conversation as a Learning Opportunity

The final takeaway from Dr. Sayles is to view this conversation as an opportunity for growth. Veterinary managers and practice owners alike are on a continual learning journey in practice management. Recognizing this and embracing a spirit of continuous improvement will benefit not only you and the owner but also the practice as a whole.

Final Thoughts

Approaching financial concerns with a practice owner requires sensitivity, preparation, and clear communication. By setting the right headspace, presenting facts neutrally, inviting collaboration, and staying open to learning, practice managers can navigate these tough conversations with confidence. For more in-depth tips to tackle tough financial conversations with your practice owner, check out the Uncharted Podcast Episode 312 “My Practice Owner Spends Too Much Money.”