Opening a practice today means encountering a slew of new roadblocks that have never been a problem before. We spoke with Drs. Jon Reynon, OD and Monica Ma, OD of Parkside Eyecare and Dr. Chun Auyeung of Eyes on Norbeck Vision Care at Vision Expo 2019 about their experiences opening their practices!
What is the market like for ODs interested in opening a practice?
Dr. Jon Reynon, OD says that the advent and growth of social media has dramatically impacted practice ownership, even in the last 10 years. Patients are driven by reviews on sites like Yelp, Google, and Facebook now more than ever before. “No one wants to go to that one or two-star practice. They want to go to that five-star practice.”
Dr. Monica Ma, OD echoes the burden of social media but also emphasizes the growing mountain of optometry student debt. With a deadly combination of existing loan debt and high interest rates, new grads are deterred from opening their own practice.
Dr. Chun Auyeung, OD sees the practice market today as a double-edged sword. While there are many more competitors on the market today than ever before (including corporate optometry and private equity groups), you also have direct access to thousands and thousands of pages online worth of information on how to get started!
If you're considering opening a practice cold, follow along with our guide that covers everything you need to know!
What are the biggest challenges faced by ODs opening a practice?
Opening up shop
The presence of large corporations and reputable brands continues to be a massive challenge to potential private practice owners. Drs. Reynon and Ma fought to open their practice in a brand new shopping center, but they struggled to beat out larger companies for the spot.
The owners of the property wanted a brand name to sit alongside their other national brands in the plaza. "Being a practice owner, you’ll make nearly 70% of your money in retail," says Ma, and being able to claim a key location can make a world of difference. Overcoming that process and getting the loan for their first practice was the hardest challenge. That is coupled with a loan for a second location and a mortgage as well!
Once the practice itself is in place, the next bit to sort out is systematizing your office. A practice cannot function properly without systems in place; you have to be able to reflect on practice finances and records at any time, and taking the time to establish those practices early will lead to a more productive and fruitful business.
Paying the bills
With student loan debt piling up, plans for the future becoming reality, and the idea of practice ownership on the horizon, paying the bills starts to look impossible. The truth is that practice ownership isn’t for everyone. It requires dedication and persistent, constant work. You’ll work part or full-time jobs to save and prepare yourself, and once you open you have to keep the momentum.
Dr. Auyeung’s practice is open five days per week; he works there three days per week, and the other two he works at another sublease location. If he has a slow period coming up, he steps away to fill in elsewhere.
Making a Profit
“How long does it take for a practice to become profitable?” This question is asked frequently and for good reason! Everyone wants their business to make money, but the answer will vary greatly from place to place.
Dr. Ma highlights that “profitable” may not be the best description as even when the practice starts to make money beyond covering its own overhead, there is still practice debt to cover which may take many years to pay off. Instead, she turns her focus to highlighting Parkside Eyecare becoming “cash-flow positive” after their second month in business which is quite the feat!
One great step you can take to keep the lights on and the practice moving is to negotiate with your vendors! Just as you're taking a risk opening a practice, they’re taking a risk on your success and want you do well. If you are able to space out payment plans and bills, even if it takes you longer to pay them off, that cash flow planning may save you in the long run.
Whether you're planning for a new practice or saving for a new car, start planning right with our cash flow calculator!
What are some things that you learned from opening your first practice?
What works in one region may not work in another.
In a densely populated area, opening a second practice, even one fifteen minutes away, could mean treating a completely different patient population. That new population may not be your target audience which can be disastrous.
Get more space.
You may be surprised at how quickly you outgrow your space. Don’t turn down an amazing location because it’s small, but do keep in mind that you might need to open a second practice if you continue to grow! Optimize the space within your existing business to sell, and if you’re not, you may not be getting everything that you can out of it.
Hire an optician.
Bringing on the right staff to help guide the process and allow you to more easily delegate tasks can make opening cold much easier.
How do you know when to grow your team?
Expanding your team is a costly endeavor and the right time to bring someone on will change, but it’s a good idea to set a threshold to bear in mind. Dr. Auyeung started his practice alongside his sister, and they were seeing roughly three patients per day. When that volume doubled, he brought a part-time employee on board to better manage the practice’s busiest days.
On the other hand, if you are able to open with an existing patient population on hand and expand rapidly, you’ll need more hands on deck. Parkside Eyecare opened with a general manager, a practice manager, a front desk staff member, a technician, and an optician already on staff, and after the second month, they expanded to include another full-time and another part-time member.
Expanding to a second practice meant hiring another three, full-time employees! Dr. Reynon emphasizes that not everyone will start with that many staff members, but their location had little competition, and they wanted to make large strides quickly.
How do you build your patient base?
Online
Online
Online
Dr. Auyeung stresses the importance of using the internet to attract patients. Relying on the power of social media, of search engines, of applications like NextDoor and Yelp, in order to build a reputation is key. In fact, he recommends taking the time to build your practice website prior to opening; build your practice footprint in advance and maintain a large online presence.
That's not to say that word of mouth recommendations don't still have a place in today’s market as well. Other more traditional marketing methods like mailers have an impact, but the biggest driver by far is developing a great set of patient-generated reviews and online visibility. Be yourself in the exam room, build rapport, and if patients are enjoying themselves, they’ll be happy to help you in return.
Do you have to focus on medical optometry to be successful?
Drs. Reynon and Ma launched Parkside Eyecare with all the technology they could get their hands on. They opened their doors with an OCT and a Visual Field because they wanted to differentiate their services from the competition, but they also don’t think that starting off with all of the glimmering, fresh technology is a necessity. From a revenue standpoint, their practice is still roughly 68% retail. “At the end of the day, no one will come to you if you can’t do a perfect refraction.”
When considering what you really need, refocus on your patient population. What does the population in your area need? It may be less than you think. “You know, you go big or you go home. I stayed home.” Dr. Auyeung laughs. He opened his practice with a digital lane a fundus camera which was enough to help him serve the patients that most needed his help. All three agree that having an ocular camera on site is invaluable for patient education purposes.
If you are interested in expanding to more medical services, here are some tips for getting comfortable with medical eyecare.
Lastly, take the time to ask your patients what they want! Dr. Auyeung is excited to continue to grow his practice, but he regularly tells his patients that the practice is theirs, and he wants to work with his population to identify tools that will help them to live better lives.
What is your advice for someone interested in opening a practice?
- It’s a lot of work. There is a lot of planning and you have to build processes. Opening a practice is a great way to go, but you have to be dedicated to the process.
- The industry is definitely changing, but that doesn’t mean that opening a practice is impossible. If you want to put in the work, and it’s your passion. Nothing is stopping you! Find mentors, find resources, and get to it!
- If you’re hesitating, rethink it! This doesn’t mean stop or give up. Dr. Auyeung emphasizes that you have to be sure of yourself and sure of your desire to commit. “I felt that my community needed a personalized eye doctor. I did it for the community. I did it for my wife. The finances will come later.”
Are you ready to open your practice? Let us know if you have any questions in the comments below!
