Tired of your partner… Start your own practiceJanuary 14, 2013
By Chad Fleming, O.D., AOAExcel Business and Career coach
Many of us in optometry business partnerships have entertained the thought of jumping ship.
You know, those days when you are fed up with your partner’s inability to accept change. Or remember the day you chased your partner down in the exhibit hall to tell him or her about all the advantages of the OCT and why the practice must have one. Just as you hit the peak of your excitement, your exuberance turned to a low simmer that eventually led to a boil when your partner responded by telling you of all the reasons that the practice could not afford an OCT. You heard those dreaded words, “our practice has done just fine without all the fancy technology.”
At times partnerships can be frustrating, to the point you start considering solo practice. You dream of making all the decisions and doing everything your way, the right way. Whether you are ditching your current partner or you just graduated from optometry school, here are some things to consider when opening a new optometry practice.
1. Research the U.S. Small Business Administration: It is amazing how much information there is on this website for optometrists looking to open their own practice. Visit http://1.usa.gov/grx19t to learn more about starting a business.
2. Put your team together: This requires some networking to find the best CPA and attorney in the business. You want someone who is familiar with both small business and optometry. The best choice for your team may be someone who lives in another state. There are many good reasons to expand your potential candidate options beyond your local experts. Technology has given you access to the best individual for the position. Visit www.crisergoughparrish.com to learn more about a CPA (Criser) and www.woodard-law.com attorney (Mitchell) familiar with optometry.
3. Choose your location: It is one of the most important decisions you will make regarding the future success of your business. There are two different locations that you must consider: physical and virtual. The first step to take in understanding where to put your efforts is in the demographics of your potential location. Use the Internet to access the areas chamber of commerce and also reference the state census office and state property tax office. Also consider the local competition, visibility from the street, and accessibility.
4. Office design: When you plan, plan for success. Many optometrists starting a practice and those who are remodeling their practice often times make the mistake of not planning far enough in advance. When you choose how many exam rooms to build out, consider that you will become busy and that at a minimum you should plan on two per doctor. If you will have a finishing lab in the future then plan for the plumbing now. Also consider that many optometry practices depend on 50 to 70 percent of their income from the dispensary. This would suggest that investing in the dispensary would yield you the greatest return.
5. Practice EHR software: Determine the software before you decide on hardware. Your software system will either run on a local server or be hosted and accessed online. The direction you decide to go will make the difference in the hardware you buy.
6. Insurance: You will need to request a provider number for Medical Medicare and Medicaid should you choose to provide services for either one. Contacting your state optometric association is a great way to research which managed care organizations operate in your state. Deciding which insurance panels to join is difficult but remember that this will most likely be your main stream of new patients to the office. When you consider that “advertising” dollars will need to be spent on creating awareness, you may consider taking lower end plans now and then leaving them once the business grows.
7. Marketing strategy: Determine who your target market is based on demographics and then look to create awareness by getting involved locally and online. Best resource on this is the Referral Engine by Jantsch; find my review at www. optometryceo.com/book-shelf.
8. Personnel: Start by writing out job descriptions of each position you will eventually need. It is often easier to just think in the here and now. Plan for your practice to grow and then you will have building blocks for creating a great staff. You will need a federal tax ID number or Employer Identification Number (EIN). Your accountant should be able to assist you in this. When you determine how many staff you will need to start, then you must also include their compensation package. Remember that your staff cost should be 18 to 22 percent of the practice’s gross collected.
9. Dispensary: Start by going to regional and national trade shows to find out what products that you want to have in your office. There are many great companies to work with so you need to check their product out and also meet with the vendors themselves. It works great to start scheduling appointments at the local coffee shop and have a list of questions so that you can interview them.
10. Suppliers: Buying groups can be a great way to get maximum discounts early on. You should expect to pay a buying group about 2 to 4 percent to obtain the privilege to buy product at volume discounts. Once your practice grows large enough you can negotiate many of the same discounts without the buying group fees should you choose to go deep in one or two different companies instead of wide in many companies. The suppliers also include the labs you will use. All labs are not created equal; therefore I would recommend you sample the turnaround time and quality of each lab before deciding to use any one lab exclusively.
It is not an easy road to take in starting a new practice. Ask any optometrist who has done it.
So before ditching your partner, consider the most successful multi-doctor practices are those that are built on a strong partnership.
There are many costs to dissolving a partnership and my hope is you strongly consider the cost. Not only the cost to you, but also the cost to your family, staff, and patients.
Most frustrations in a partnership can be worked out through good communication.
Personally, I have been frustrated many times with my two partners, but I know that they have been frustrated as much or more with me.
Our practice is strong and continues to grow because the partners have made a commitment to stick it out through the good and bad times and communicate through the storms.