01/05/2024
Facts and figures! We ain’t rich!
Do you think your vets make a lot of money? Wanna know the truth? Learn the ‘secrets’ behind the curtains… Take a look at Amity’s numbers here…
Amity Financial year Nov 2022 – Oct 2023 (All numbers do NOT include VAT)
Turnover - £445,450 (We took in about £534,540 of which £89,090 was VAT)
This is the number that Amity generated in that year. Where more than half a million sounds cool, almost £90k was given straight back to HMRC as VAT. Yes, we are fundamentally tax collectors for HMRC!
Some expenditures…
Salaries for your Amity Team who works hard - £196,449 (44%)
Purchases including consumables like vaccines, drugs, lab fees, syringes, needles, etc - £79,545 (18%)
Rent of the wonderful building - £21,478
Outside Services like the luxury of having orthopaedic and cardiology specialists coming in-house so you need not travel further for their services - £5,610
Lighting and heat (we feel the pinch of the rising rates, do you?) - £5,561
Business rates (council tax equivalent) and Water bills - £3,028
Telephone (no automated messages from us!) - £2,747
Postage (for your medications, birthday cards, anniversary certificates, etc) - £2,755
Advertising - £4,013
Subscriptions (for the vets to stay registered and keep up to date with the latest vet news) - £3,413
Repairs and renewals of equipment (have you seen our cat pens?) - £3,805
Accountancy fees - £2,280
Training for Vets and Assistants - £3,139
Legal fees - £5,299
Insurance - £1969
Repairs to property (Yes, it costs money to make Amity look like that!) - £1,407
Cleaning - £1,239
Computer system to keep your pets’ records intact, easily accessible and secure - £8,253
Books to keep updated - £925
Refreshments (Do you like the tea, coffee, biscuits, and chocolates served at Amity?) - £1,657
Bookkeeping - £720
Donation to VetLife (helpline for vet personnel) - £300
Gifts to clients (sympathy/congratulatory/thank you gifts including flowers and much more) - £5,058
Bank charges - £1,971
Other costs include payroll fees, bank loan interest, equipment depreciation, sundry, pensions, internet, staff entertainment, clinical waste disposal, medical gases, etc.
You would have observed that almost 50% of the turnover is spent on salaries. We believe in investing in our people. Equipment and services can be replicated and replaced. What makes Amity unique is 100% our team.
The net profit of Amity (Turnover minus all the monies spent to create the turnover in the first place) is £55,816 which is about 12.5% (known as profit margin).
Oh, don't forget the profit is taxed as well! So, from the profit of £55,816, £15,976.51 will be paid to HMRC as tax. (Still not in the vet's pocket! 😉)
Yes, the money generated was more than half a million pounds (£534,540) which seemed a lot. However, when you take into account how much it took (£478,724) to generate that amount into consideration, it does not appear to be that much left.
Remember that it is not how much money you make. It is more of how much money you have spent to make that amount of money. For example, if you have to spend £1 million to make £1 million, you take home nothing.
So, this is Amity. There are far easier ways to make money. There are businesses which have better profit margins. I know of a fish and chip van with a 50% profit margin and a burger van just down the road with a 38% profit margin. Well done to them for having a business with better profit margins.
At Amity, we enjoy what we do. We consider it to be a privilege to be doing something we love and helping both pets and their guardians. We are grateful to our clients who allow us to work in a job we love. We believe in providing the best care we can for them and their pets.
In all, we love what we do and we thank our clients for allowing us to work this way. Nothing brings us more joy than to see how we have positively affected the bond between our clients and their pets.
Are we in it for the money? Well, it is a business and we all need to get paid (I've tried to pay for my rent and groceries with my love for animals. It does not work!). Are we raking it in? At 12.5% profit margin, I hardly think so. What you pay is the cost and what you receive is the value. Only you can determine whether what you pay is of value or not. We understand that we are not for everyone and that is ok. It is paramount for pet guardians to work with a vet who is a great fit for them and this applies to other things in life as well, like relationships, friendships, jobs, etc.
Did you know that 54.5% of vet practices have a below-average profit margin of 8-12% (SPVS September 2016)? This means more than half of vet practices in the UK (corporate and independent) are working on an average of 10% profit margin. To put this in real terms, if you are charged £120 and £20 is VAT, only about £10 is profit and the rest are expenses it takes to generate the £120 in the first place. We consider ourselves lucky to be running a profitable business so we can continue serving our clients.
If you are our client, thank you for your trust in us taking care of you and your pet. If you are not, please be kind to your vets and know that they are not in it for the money. If they are ‘cheaper’ than others, know that they are working even harder to get you the results you receive. Be kind and nice to them!
Hope you enjoy the sunshine soon (well, we are in the UK, don’t hold your breath!). Stay cool!
Yours,
Lennon