The last few tip articles have been focused on increasing patient demand for the practice, which is the biggest problem facing most optometrists. Of course, some offices are already quite busy and to those I say congratulations and well done. We began this series by defining “busy” as it pertains to eye care in the modern world of managed care. Seeing a dozen or so comprehensive exams per day is not busy by today's new standards.
I recommended compressing the existing number of patients seen per week into fewer days and delegating much more of the exam data collection to trained staff. With doctors working at a higher level, more patients can be seen per day and revenue per day will increase sharply. But there is usually not enough patient demand to keep the appointment schedule full five days per week; many practices today would become part time offices with this faster patient flow model. I think that is actually a fine idea and it opens up the concept I'm presenting this week: open a branch office.
If patient demand in your existing location is not sufficient and is not growing rapidly, one of the greatest marketing strategies is to open another location. Many would agree that an ideal business model would be to have one extremely busy office, but in many local markets, considering the competition and the population, that is simply not possible. Rather than just accepting that and working your whole career with limited financial success, why not take control and open another office. If the current market is not large enough, go to a new market.
Managing two offices is certainly more work than managing one, but the financial rewards are significant. Many practices could double their current gross and net revenue. While there would be two sets of office overhead, you would also have two net incomes.
Consider these benefits of operating multiple offices:
Dramatically increasing the number of patients seen per week by drawing from a larger market area.
Increased economies of scale: more purchasing power means better pricing on products.
The ability to share equipment and staff among two or more locations.
Improving your practice image as a major player in the market.
Marketing and advertising projects can be used to help all locations.
Most doctors like practicing at a busy pace with the support of staff more than the slow pace of doing everything yourself.
A practical plan for a second office
Opening a branch office is very similar to opening a practice cold. It starts with very few patients and builds over the first few years. It is an investment that usually offers an excellent return. You should have a business plan and a source for financing the new venture.
There is a wide variation on how to approach opening a new practice, but my preferred method is to do it with some moderation, limiting the start-up costs and the ongoing monthly expense and moving into positive cash flow as fast as possible. Of course, I believe it's important to operate offices with attractive décor and advanced technology, but I would start with just the basics and then reinvest after the office is up and running.
As both offices become busier and the doctor is filling nearly all of his or her days with patient care at a fast pace, an associate OD should be hired. This is the goal to reach for because it allows the practice owner to cut back on patient care days and spend more time as CEO of the company. And it may now be time to open that third office.
Best wishes for continued success,
Neil B. Gailmard, OD, MBA, FAAO
Editor, Optometric Management Tip of the Week
Dr. Gailmard's new book, Practice Management in Optometry: A Blueprint for Success Based on the Optometric Management Tip of the Week, is now available on Amazon.