I like to think of optometric practice in terms of three levels for simplicity. The optimum management strategy is different at each level. Consider these:
New startups and small practices.
Mid-level practices; annual gross revenue from $300,000 to $800,000.
Large practices with approximately $1 million or more in revenue.
The largest group by far is the mid-level and it is also the hardest to break out of, so I'd like to address that today. The high grossing practice can still have many challenges, but it has already proven it can generate revenue. The very small or new practice needs to do the right things to build patient referrals and loyalty, but these require nurturing over time.
Some mid-level practices are growing quickly and are already setting themselves apart. These practices are passing through average on their way to greatness. But most mid-level practices are kind of stuck. The owners may begin to accept average as good enough; they may rationalize that they don't want to see more patients per day. The owners may become accustomed to doing many things themselves. Everything depends on the doctor and that becomes the norm.
Consider the following factors within an average practice. Each factor is usually average as well and therefore it can't become a competitive advantage.
Office size. Usually medium to small; the space can restrict the number of patients that can be seen and staff. Close quarters can become a customer service issue. The office and the optical are not impressive.
Signage and exterior image. Nothing that stands out in the sea of businesses.
Office hours. Usually not all that convenient for the patient. The doctor and staff like them though.
Clinical instrumentation. Generally average, perhaps a retinal camera.
Frame selection. Average brands; about 600 frames.
Office décor and optical merchandising. Nice but not memorable.
Staff skill and service. Average; not above and beyond.
How can a mid-level practice break free?
To make an average practice grow, the owner must make some things happen. Not wait for them to happen. The interesting thing is that there are a number of "things" that will work. That may actually make growth more difficult because the owner will have to choose one or maybe two things to work on and invest in. That is what CEOs do. They have a vision. They make a judgment about what would serve their company best. And they take some risk.
Here are some ideas for possible projects that can boost a practice out of the mid-level blues. These are your possible "things" to make happen. Which one do you feel would give your practice the most lift?
New office facility with more space. A great way to push the practice upward; current patients and the community at large see the change as a signal that the practice is doing well and service is improving.
Add a branch office location. When growth stagnates due to insufficient population, a second office in a different market can attract new patients. See patients efficiently and quickly with a more compressed schedule.
New instrumentation. What is on your wish list? A new high-tech instrument generates buzz. Show your patients you are up to date and get them talking.
Remodel and expand the optical display. Patients judge your entire practice based on what they understand, and they understand interior décor and retail displays very well. Making your optical look great is a smart investment.
In-office optical lab. This not only reduces your cost of goods, but it also improves patient service.
An additional exam room. This is a huge step up in efficiency even if you are not extremely busy yet. Patient service improves and that results in more word of mouth referrals.
Electronic medical records. Some of the benefit is for internal operations, but patients will be impressed to see the practice becoming cutting edge. Add scribes and you'll gain many benefits for patient care and service.
Reception room lift. How about adding a flat screen TV and a Keurig coffee maker?
Making it happen
Once you decide on the most important project (in your opinion), take action! Many ODs feel they can't take on a new business expense unless they see a sure way to pay for it. That may be true sometimes, but in other cases you should just arrange the financing or go to your savings. A great example is a new, larger office. On paper, the build out cost and the increased rent may seem like a challenge, but in nearly every case I've seen, a new nicer office results in a nice boost in patient demand. Production and revenue increase more than the cost.
Of course, you want to take on new debt with some caution and have a plan for paying for it, but in most cases business will improve, you will easily handle the increased expense, and you find yourself leaving your old mid-level practice in the dust. You begin to enjoy the benefits of a larger, more successful practice. Act as you mean to go.
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.