Article Date: 11/1/2010

It's Time to Start Investing in Your Business Plan… Again
o.d. to o.d.

It's Time to Start Investing in Your Business Plan… Again

Be proactive, and consider what opportunities the coming years hold for your practice.

By Walter D. West, O.D., F.A.A.O., Chief Optometric Editor

If you've been wondering whether you should buy that new piece of equipment, lease additional office space, or build your own piece of commercial real estate, this may be the time. If you're thinking about selling a business or commercial real estate, it may not be the time. In looking back at past recessions, and expecting that history will repeat itself — at least a little — I polished up my crystal ball and took a look into what the future may offer for optometrists.

I think we'd all agree that the "recovery" from the recession is, at best, mediocre and will gain some strength into late 2011. I think we'll see the economy strengthen in 2012 and then probably flatten in 2013 due to concerns regarding the presidential election.

Turn reluctance into preparation

Many practitioners are understandably reluctant to commit to action now in order to take advantage of future opportunities. The reason: the stagnation they experienced in their business during the recession. In an effort to prepare for the opportunities that will present themselves, here are a few actionable items to consider:

Be sure your supply chain, staff skill sets and ability to accept additional clinical delegation are up to speed and ready for growth. If you need more employees, now's the time to look for great talent available at low wages.

A If you need to borrow money for capital investments and expansion, borrow as much as you can, borrow it now, and get it in long-term loans at fixed rates. In other words, if you're going to go into debt, do it now, as interest rates are low. Use that debt to buy income-creating assets, such as capital equipment and innovative products, which will provide improvements in your business and patient flow efficiency for years to come.

Monitor your systems to measure your practice's activity and key indicators for growth. Rethink your compensation plans. Offer only raises to top performers. For other employees, consider paid training so they can become more valuable to your practice.

Now is also a good time to begin improving your practice culture, which determines your employees' behavior and ultimately how successful and enjoyable your business becomes.

Also, invest in customer research. Learn what your patients want as opposed to what you think they want.

Credit and real estate

It appears banks will likely continue to be tight with lending, but I believe that credit will begin to flow more freely in early 2012. In the meantime, it's estimated $1 trillion to $2 trillion is sitting on the sidelines in venture and private equity firms waiting for opportunity to knock. When that money begins to flow into investments, the economy should respond very favorably.

I think the commercial real estate market will reach its low point in mid-2011. So you might want to wait a while if the current price of a building doesn't suit you.

All in all, we, as O.D.s, must become proactive and prepare to capture the growth opportunities ahead. The slack time many practices have seen — as a result of the recession — is an opportunity to prepare for a bright future. OM

Optometric Management, Issue: November 2010