Slaying Private-Practice Myths
Have you fallen prey to these 6 popular misconceptions? Learn the truth from an expert.
By Gary Gerber, O.D., Hawthorne, N.J.
your decision to become an O.D. in the first place, your next big career decision will be how you'll ultimately practice. You have some well-defined choices. Will you look for corporate employment? Buy an existing practice? Start your own practice?
My client case files show that when it comes to profitability, self-employed doctors still profit the most -- by far -- provided their practices are opened properly and managed correctly. Here, then, are the most common myths
I've uncovered, along with solutions to counter them.
MYTH #1: I CAN START SMALL AND GROW LATER.
This may be true with the patient count in a new office, but it shouldn't be the case with the rest of your practice. Does a supermarket start with a pushcart and a fruit stand? Does a department store open with the mentality "ladies clothes now and men's later"?
Many younger practices flounder not because they spent too much money opening but because they spent too little. For example, one practitioner I counseled decided to add an edging lab later instead of sooner and then wondered why so many patients didn't buy eyeglasses from him. The lesson? Patients will seek faster, better service.
Another client wanted to focus his practice on refractive surgery and orthokeratology, but he decided to forgo buying a corneal topographer until he could afford it. "How can you afford not to have a topographer?" I asked him. I showed him how to buy a topographer lease-free with cash and helped him build a sizable base of the types of patients he really wanted in his practice.
"I want a high-technology modern office" is a common refrain of newer grads. Yet, these same doctors typically buy practices that are neither high-tech nor modern looking. Any money they might have saved buying these practices will be spent trying to rejuvenate them.
These doctors would've been better off buying practices that were closer to how they want to ultimately practice -- and eventually retire from. This brings us to myth #2.
MYTH #2: I HAVE PLENTY OF TIME TO THINK ABOUT RETIREMENT.
Not as much as you think. One question I ask clients who are about to open a new practice always leaves them scratching their heads. I ask simply, "What's your exit strategy, and how and when do you want to retire?"
It's something none of them is thinking about. However, it should be a priority.
New practitioners should realize that what they're about to open up shouldn't be "Dr. Jones' Optometry Practice." Instead, it should be "The way Dr. Jones believes an optometry practice should be run." They're about to formulate an entire system for optometric success. They should consider every detail, no matter how small, and record it in a master policy and procedures manual. What does this have to do with retirement and exit strategy?
As the practice matures, this document will be as valuable to the doctor as the secret formula is to Coca-Cola. Indeed, when exit time comes, what the doctor will be selling is his comprehensive program for success. He'll be turning over the equivalent of "The Colonel's secret recipe" and not just his patient list and phoropter. This forward-thinking doctor will have created and refined the quintessential manual of optometric success. The world according to Dr. Jones starts before opening day and is ultimately sold to his successor.
MYTH #3: I NEED THE SENIOR DOC TO STICK AROUND.
Unlikely. Consider cutting this cord sooner rather than later.
Clients tell me they feel more secure if the veteran doctor is there to introduce them to long-term patients and current staff, explain how the business runs and help with the overall transition. I contend that all of these tasks can happen either before the practice changes hands or immediately after. And it can happen in a matter of weeks not months or years.
Purchasers must consider that the senior doctor won't work for free and instead of keeping him on and paying his salary, you can put those funds back into growing the practice. Sure, some patients will leave as the senior doctor exits. But that will happen whether he leaves the day you acquire the practice or 5 years later. Careful planning and marketing can help you avoid this exodus.
MYTH #4: A YELLOW PAGES AD AND A FEW COUPONS ARE ALL I'LL NEED TO MARKET MY NEW PRACTICE.
Marketing any practice, whether it's new or transitioning from senior to junior doc, is a highly technical and scientific undertaking. Some doctors have spent thousands of dollars when only hundreds were needed. And I've seen ads that wound up costing the doctor patients instead of growing his business. For an example of how an ad can go bad, see "A Good Idea Gone Awry."
Volumes have been written on the art and science of marketing and advertising and to not become a student of marketing before opening a new practice can be a very, very costly mistake.
MYTH #5: I CAN DO IT ALL MYSELF.
Maybe you can, but that's rare.
If you needed a package delivered to your eyeglass lab 50 miles away, you could drive it there yourself, or you could call a messenger to do it for you. Doctors, especially new ones, need to realize that much of practice-building (not practicing optometry) can and should be delegated to those who are better suited to certain tasks.
New O.D.s also need to realize the huge time commitment that's involved with opening a practice. I routinely have new practitioners call me and say, "I still can't believe the time it takes to make all this happen." These doctors aren't talking about seeing hundreds of patients each day. Rather, they're amazed that they're spending so many hours on the marketing plans and action items that I've laid out for their success.
|A Good Idea
Looking to improve his patient database, a doc advertised $40 off a complete pair of eyeglasses. He managed to gain a few new patients at a cost of $40 per sale. Not bad. But in this doc's market, a large, established optical chain had already positioned itself as the low-price leader. The doc was in over his head and unable to compete on price.
Following my advice, the doc ran a new ad that read, "We don't discount our eyeglasses and this is what that means to you." This ad defined who the doc was and what he was all about. He discovered there were quite a few patients out there who didn't want to go to the low-end shop, but didn't know where to go! He gave them a clear cut choice.
Seeing patients is easy. That's what you were trained to do. What you probably didn't learn in school is how to get them in your chair, how to program them to return to your practice and how to prompt them to send referrals your way. In other words, you need to set up a system to ensure that you profit from their time in your practice. Just as you probably used a lawyer to negotiate your lease and an accountant to do your taxes, so, too, should you use a professional consultant to help you configure and grow your business.
MYTH #6: I'LL DO WHAT EVERYONE ELSE DOES. AFTER ALL, THEY ALREADY HAVE A PRACTICE.
Bell curves exist for a reason. In this context, would you prefer a practice that's in the middle of the bell curve or on the positive fringes? Doing what everyone else is doing will lead to a practice that's just like everyone else's. Avoid the urge to "go with the flow." Carefully examine and make correct decisions about name, hours, fees, managed care plans to join or avoid, marketing position, inventory and displays. Chart your own course away from the herd and differentiate yourself to prospective patients in tangible, valuable ways.
My clients often ask, "How long will it take me to have a $400,000 practice like Dr. Average down the street?" My reply: "If you set your goal at $400,000, I'll get you a $400,000 practice. If you set it where it really should be, a minimum of $1,000,000, then we can really have some fun!"
Building your own dream practice isn't easy nor for the faint of heart. Yet, my files show that when properly planned and executed, the dream of private practice can become a profitable and rewarding reality.
It takes hard work and determination to not follow in the paths of others who've achieved only marginal success. Instead, you must avoid the commonplace and understand that those who ignore history might really be destined to repeat it.
Dr. Gerber is the president of the Power Practice, a company specializing in making optometrists profitable. In addition to consultations, he also offers practice-building seminars, videos and software.
Optometric Management, Issue: March 2003