If I Had to Do It Over
Managing the Business of Optometry
To successfully run your own practice, you need more than an optometric education. You need a keen business sense, too.
By Stephen M. Cohen, O.D.
WHEN I GRADUATED FROM optometry school in 1985, the caliber of optometric education was at an all-time high, and it's continually advancing. But despite our excellent clinical education, we often fail to develop essential business skills. During my first foray into private practice, I felt confident in my ability to care for patients, but I made every imaginable mistake in operating the business. I failed to control costs, made hasty decisions about equipment purchases, offered too many professional discounts and didn't enforce collections policies.
I left the solo game for a while, but when I opened my own practice a second time, I made a decision that proved to be the wisest of my career: I hired an accountant named Debbie. As we worked together, I became a better businessman. Here are some business principles that can help you prepare for private practice.
Focus on ‘Needs’ First
When I started my second solo practice in 2001, Debbie helped me determine what I needed — versus what I wanted — to run a successful business. First, we leased "no frills" equipment for one exam room. She assured me that if I followed her cautionary approach, eventually I'd be able to buy the equipment that I believed would benefit my practice.
Seven years later, I have two fully equipped exam rooms, a slit lamp camera, a retinal camera, a GDx and frequency doubling technology (FDT), a visual fields analyzer, two auto-lensometers, a topographer and an auto-keratometer/refractor — and all are paid for in full.
Review Financials Monthly
Many practice owners review their financial statements on a quarterly or semi-annual basis. But how can you keep your ship on course using outdated information? To ensure my practice is financially sound, Debbie prepares monthly financial statements. This enables us to make timely financial decisions, observations and, where necessary, corrections.
Over the years, I've learned that too much overhead can kill a business, whereas controlling overhead can help you make a profit sooner than expected. Profits help pay off debt and enable you to apply more income to the bottom line.
One way to control overhead is to determine the number of staff people you need. Practice owners often get into trouble when they assume that a solution to a problem is to throw more people at it. This couldn't be further from the truth. You shouldn't add employees for the convenience of the doctors or other staff members. Only hire additional staff when practice efficiencies deem it necessary.
For instance, additional staff may be needed if the receptionist can't answer the phone because she's too busy helping patients and performing other tasks, or if the optical department can't send out orders to the lab on time. These are worthwhile reasons for adding staff, because if you compromise customer service, patient loyalty and your referral base eventually will decline.
Use This Invaluable Resource
Having an accountant has provided me with an excellent opportunity to run a lean but progressive business, while experiencing the many benefits of having a solo practice. You can experience the same success if you take the time to hire a "Debbie" who can help you maneuver the financial ropes. nOD
|Dr. Cohen practices in Scottsdale, Ariz. He's past president of the Arizona Optometric Association and recipient of the "Arizona Optometrist of the Year" award. You can reach him at email@example.com.|