Author: ecadmin

Going from Ordinary to Extraordinary

Marketing, Merchandising, Pricing, Resources

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There are a number of grocery stores we can choose from in our smallish town. I always find it interesting to find out where other locals like to frequent and why.

The smaller of the grocery store options is well known for its friendly and familiar faces, which make the slighter higher prices on produce worthwhile.

The largest of the stores is known for having more unique products, in amongst the tried and true products. Some choose the local health food store, where they feel good about the sustainable efforts put into growing and making the food. Still others make a point of visiting the Saturday Market to support local farmers.

Clearly, we are not all seeking the same experience or value proposition. This holds true for customers in every industry.

Importance of Strategic Intent
So how do you apply this to your full scope optometric practice? It starts by intentionally creating a strategy for your office.  Take a look at your competition. What are other optometrist offices offering in the area? How are the opticals in your neighbourhood making themselves unique?

Then decide what you want your office to be known for. If you are going to offer the most popular brands, make it a priority to regularly check prices online. Consumers will often ask for this product – but this product is also the easiest for the consumer to compare prices for.

If this is your strategy, be sure your patient hand off is tight and your staff are well trained to assist patients in the gallery. This strategy is heavily dependent on exceptional customer service. The patient knows they could get the product from a number of different sources but chooses to reward a great experience with their business.

Consider Independent Frame Stories
Another strategy is offering independent frames, with brands not readily recognized or available. With these frames, you are creating the story about the frames and the onus is on the practice to engage the patient and relay that story.

I work with a practice in the West who does this particularly well. They source frames from manufacturers from all over North America – and then share their stories on placards placed in the gallery. This strategy seems to appeal to a younger generation in particular as are looking for products that have a unique value proposition.

The most successful businesses are the ones that clearly define their offering and deliberately work towards making sure every aspect of their business stays true to that message.

I encourage you to carve out some time to reflect on what you are currently offering the marketplace. What if your goal was to have patients who are excited to see what you just go into inventory? What frame lines do you need to carry? What message do you need to convey to stir that enthusiasm for your product offering?

Think like the patient, what frames and experience would YOU like to receive? This mind shift could be the first step in moving from ordinary to extraordinary.

KELLY HRYCUSKO

is the co-founder and managing partner of Simple Innovative Management Ideas (SIMI) Inc. and expert Practice Management contributor for Optik magazine. She can be reached at info@simiinc.com.

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Positive Trends Coming Out of COVID Shut Down

Marketing, Practice, Resources

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As offices returned to seeing patients, I started noticing some trends.  Higher eyeglass capture rates, higher diagnostic capture rates and fewer patients per day are some of the most notable.

For years, SIMI has advocated for a “work smarter not harder” philosophy that recommended seeing between 8-10 patients for every 7 hours of chair time.  Our data analytics showed us that this formula consistently led to more diagnostics being offered and more glasses being sold.

COVID offered offices an opportunity to put this theory to the test.  As they returned, doctor’s schedules were close to half of what they were pre-COVID.  The result?  In every office, gross revenue went up over last year, though they saw significantly fewer patients.  Offices have made more money by seeing fewer patients.

Prior to COVID, eyeglass capture rates were trending around 40% on average through SIMI Analytics.  In the past two months, that average has increased to 78%.  Diagnostic testing has also increased.  When not included in a full eye exam, the average capture rate changed from 20% to over 80%.

I am also cognizant of the fact that there are other factors that have contributed to these results.  After 4 months, my own family has started to mistake blowing leaves for squirrels and are taking wild guesses at the ingredients listed on food packages.  We ALL need our eyes checked, new prescriptions and glasses!  So certainly, there is some pent up business that is being realized.  Savvy receptionists are ensuring that patients with the greatest need are getting in first.  Patients are less likely to leave with their prescriptions to “shop”, as they avoid too many unnecessary stops.

But I don’t think that’s the complete story.  With more time allocated for each patient, doctors are able to spend longer with each patient, in a more focussed manner.  It has become necessary to anticipate how much time each patient will spend in the office.  This includes in the dispensary.  Suddenly, the entire office is anticipating and prepared for patients to be assisted in the gallery.  Is this is self-fulfilling prophecy?

As part of my consulting advice, I have often suggested that practices make a “plan” for each patient that day.  Do we anticipate that they will do additional diagnostic testing?  When did they purchase glasses last?  Are they due to reorder contact lenses or drops?  This plan becomes the goal for each patient.  As well as ensuring that every solution is considered for and by the patient, the “plan” also helps everyone stay focussed.

My hope is that offices will take this opportunity to made a lighter schedule and “pre-planning” permanent routines in their office. There are benefits for everyone, patients, staff and doctors alike.

KELLY HRYCUSKO

is the co-founder and managing partner of Simple Innovative Management Ideas (SIMI) Inc. and expert Practice Management contributor for Optik magazine. She can be reached at info@simiinc.com.

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TAKE A SELFIE—See what it reveals about you as a leader

Human Resources, Managing Others, Practice, Resources

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One of the most commonly asked questions of people in my position is “what is your top practice management advice or tips”?

Appraisers and brokers are obviously aware of very successful business practices as it is our responsibility to uncover them on a daily basis when we are performing appraisals and selling practices. We also uncover some inefficiencies and, quite frankly, bad practices that we make recommendations about to our clients.

It’s Up to You.
These management “issues” might be a quick fix and something that will not take long but others may take months or years to modify and while doing so, it could be detrimental to a successful sale. We make recommendations to fix these concerns if time and willpower to get it done are available. If not, it may impact the eventual sale price but not be worth the time, money and energy for the current owner to invest in before selling.

We are not practice management consultants. There is a plethora of people that do that for a living and most have worked in a professional office at one time or another and offer their services through a multitude of social mediums, mostly focusing on efficiencies and staff training. Despite what these management gurus might tell you, tread this path with caution. There is no silver bullet to eradicate practice management issues. If you have dug yourself a hole, you will need to pick up a shovel and dig yourself out.

Are You A Good Leader?
I am a firm believer in the theory that good practice management is really a top down principle and is explicitly linked to effective leadership skills. You need to take a selfie. Are you a good leader? There are many books out there on great leadership that are readily available for all of us want-to-be or current leaders and most of the research on the topic would suggest that inefficiencies, low morale, or a toxic culture is probably created and/or permitted by the leader/owner of the business.

“Success is never owned, it is rented, and the rent is due every day.” This quote by Rory Vaden emphasizes the need to be and continue to be a leader daily.

Many business owners have big egos. That is what causes us to take risks and become business owners.

Taking a regular selfie of ourselves as business owners is an important exercise. We need to see how the world views us and be brutally honest in our assessment of the culture we have built and how we have allowed it to shape not only the environment of our business, but also ourselves to some extent. This is not an easy task. When culture is eroded through a lack of leadership, tired leadership or amateur leadership, no systems can save you. Have a good look at yourself. Only you as the figurehead can rewrite the systems that you have allowed to be laid down. Maybe go over to the mirror right now and take a picture.

What kind of leader are you?

TIMOTHY BROWN

is Chief Executive Office of ROI Corporation Canada’s national professional practice and brokerage firm.

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3 Ways Eye Care Professionals Can Recover Revenue

Marketing, Practice, Resources

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The last 4 months have been tough for small business owners across the country and extra difficult for hyper-personalized industries such as eye care. Clinic owners now have to deal with two massive elephants in the room:

  • 3 months of lost revenue
  • Increased costs (cleaning, PPE, etc.)

How to get revenue back to normal and decrease costs?

The answer to this question is not straightforward, and there is no one size fits all approach. However, clinic owners are using technology now more than ever to build a foundation which helps them keep a constant flow of new customers and automate a lot of manual work.

Below are the top three strategies that you can use to attract new patients, convert searchers into paying patients, and to automate front desk work.

1. AUTOMATE REVIEWS AND REFERRAL GENERATION

More than ever, prospective patients will do a thorough search on Google before choosing a clinic, and if they don’t look online, it is because they heard about a business through a friend or family. Luckily, clinic owners can use technology to stand out online and tap into current customers for high-quality referrals. Here is how:

  • Set up automated review generation software. This software will allow clinic owners to collect positive reviews from every new patient. Once these reviews start to pile up in a couple of months, your clinic will rank higher for their solutions and appear much more attractive online.
  • Clinics can easily tap into their customer base and set up a referral system that prompts patients to refer anyone they might know who needs services clinics offer. In order to streamline this process, invest in automated referral software.

A prospective patient can find a clinic because of their great online standing or because they have been referred by a friend or family member. Regardless, they need a way to easily book an appointment or else they will look for someone else.

2. GIVE PATIENTS THE OPTION TO TEXT

 The truth is, more and more patients are looking for an easy way to book an appointment or inquire without picking up the phone. Each clinic needs to be able to support text messaging as an option for patients, or they will simply find someone who does.

Clinics should consider implementing chat widgets on their website so that a prospective patient can text in with any questions and end with a booked appointment. A clinic must have the backend technology in place to respond to these inquiries and convert prospects to patients.

Some patients still prefer to pick up the phone, which is perfect because that is what receptionists are paid for… But what happens when they miss a call or call after hours?  Is the patient gone forever? Not if a clinic has an AI-powered answering software to pick up the slack.

This type of software has voice recognition embedded in it to ensure that a patient can have a natural conversation. In this conversation, the patient will have the ability to ask questions and even book an appointment. This way, no call, and no prospective patient will ever be missed again.

3. MAKE INTAKE AND PAYMENTS CONTACTLESS AND AUTOMATED

Clinics need to ensure they are keeping their staff safe in this new normal. If they can ensure that the front desk staff never has to be in contact with a patient all the way from intake to payment, why not do it?

With social distancing software, a clinic can send check-in links via SMS before appointments, notify patients when it is time to enter the clinic via SMS, and manage the entire patient queue via virtual waiting rooms. When the appointment is over, send a link via SMS or email to collect payment. This will reduce the risk for front line staff and reduce manual work coordinating appointments.

Find social distancing software that integrates with your EMR or current payment software.

WHAT’S NEXT?

A lot of this new information and technology can be daunting for a clinic owner to learn about and manage. This is why OneLocal is here to help. If you simply want to learn whether this technology is a good fit for your practice, click here to learn more.

About OneLocal

OneLocal helps thousands of small businesses across North America get more customers with a series of best-in-class and affordable marketing automation tools. As part of an effort to help restart the economy, OneLocal is currently offering many of their tools for a fraction of the price and creating new tools to help clinic owners operate more efficiently. They are a Toronto-based tech company that has been around for over 5 years and is backed by the same company that backs Airbnb.

MATTHEW CARNEVALE

Matthew Carnevale is the VP, client relations for OneLocal, based in Toronto.

With safety now being top of mind for clinic owners, employees, and patients, it is important that you provide an experience that makes your customers feel safe. Find out how OneLocal has been helping clinic owners implement digital check-in, contactless payment, and virtual waiting rooms through LocalVisits by filling out this form:  https://info.onelocal.com/ECP

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Insight with Dr. Kerry Salsberg

Insights

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Dr. Kerry Salsberg followed in his fathers footsteps in private practice

Shared his interests in science, technology, healthcare and business

Recently teamed up with Frank Carpino of Urban Spaces to reimagine and build the practice of the future today

R. Kerry Salsberg

Dr. Kerry Salsberg

Doctorate of Optometry from the University Of Waterloo.

Awarded the T.T. Beattie Award for Orthoptics and Visual Training

General Optometry and multi-specialty independent practice owner and entrepreneur

 

What business book would you recommend other ECPs read?

Re-Engineering Retail by Doug Stephens: Retail is not dead in Optometry so long as you understand the shifting needs and expectations of a new consumer. This book provides a roadmap to successful retailing with an emphasis on memorable consumer experiences.

Where do you see your practice/ eye care in 10 years?

I think we will see further consolidation of smaller practices into larger group practices with the goal of providing economies of scale, best-in-class instrumentation, specialty services and one-stop shopping. The patient experience will be paramount to the financial success of the practice.

What is something you have done in your practice to set you apart.

Look at current trends in retail and mirror them in your practice. Offer your patients something new every year whether that be new instrumentation, frame lines, services, experiences and most importantly, LET THEM KNOW. Think outside the box in terms of product and service offerings.

What is currently the most exciting thing in your field to help patients.

Dry eye therapy and facial aesthetics.  We recently invested in Radio Frequency technology that not only treats Meibomian Gland Disorder/ Dry eye but also tightens skin and reduces fine lines and wrinkles around the face. A more youthful appearance is a big driver in our practice for this treatment.

Favourite 80’s Jam.

A combination of Steely Dan, Yes, Van Halen, and Tears for Fears. I know, a weird combination

Tell me something few people know about you?

I was once a magician and I love to bowl. Please don’t print this 🙂

You can listen to Dr. Salsberg discuss the major office renovation undertaken on our Eyes Wide Open Podcast 

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Life After COVID-19

Practice, Resources

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Before offices were able to re-open, many speculated how things would be. While some health care professionals (e.g. veterinarians) were able to remain open under restrictions, they experienced lower revenues. Most health care professionals could only guess at how to be prepared for their patients’ return.

Conjecture ran wild with all the uncertainties. Banks stiffened lending policies but if consistent revenues return, the reins will loosen again. Buyers who were skeptical, will re-enter the practice sales market once patients return and providers learn to manage despite restrictions. However, this forced sabbatical left some mature owners realizing they may be ready to sell.

Major cities have been the epicentres of infectious disease, and have always bounced back—often stronger than before. After a pandemic, people moved to cities because of job opportunities and potentially better wages. The three previous world pandemics were devastating for people and animals world-wide. They certainly changed the social and economic fabric of society. The Black Death and other plagues decimated cities in Europe and in Asia until the 20th century. The Spanish Flu killed as many as 50 million people worldwide, and yet New York, London, and Paris all boomed in its wake.

Our generation can only compare COVID-19 to major crises like World Wars and The Great Depression because of its global impact. These crises lasted years, including the pandemic of 1884, which only ended in 1959, having caused over 15 million deaths.

COVID-19 changed the way we live and do business. We’ve become diligent about washing our hands, using sanitizers, cleaning surfaces and social distancing. We stay home when sick. The pandemic is a technological equalizer making people use tech tools in the workplace and become more efficient. Most health care professionals are using some form tele-medical advice for consults and remote monitoring. Tele-medicine of all kinds (optometry, dental, veterinary etc.) is positioned to transform access to health care services for children and seniors, for remote communities and those who face travel, physical mobility, and other barriers.

For health care practitioners, despite the financial hardships endured by practice owners, COVID-19 created a few positive outcomes. They are taking increased precautions to control cross-infection and understand that any patient has the potential for disease transmission. Patients appreciate the extra precautions now necessary to ensure their safety. Practitioners will continue to protect patients and their staff by using personal protective equipment as prescribed. The use of disinfectants, up-to-date sterilization practices, dedicated hand washing, and one-time-use disposable materials facilitate safe medical visits for patients.

Other positives are the critical communication changes. The first is that the number one practice consideration is the safety of the patient and staff alike. Now more than ever, all precautions are to be taken. The second change is the documentation and consistent review of Standard Precautions guidelines with staff to ensure they are followed. Finally, the communication that these precautions are routine in the practice and are in compliance with Public Health and the regulatory guidelines.

Health care offices must provide calming information and reassurance to both staff and patients. There is conflicting information or even a lack of basic information about infection control and standard precautions. Now is the time for all health care practitioners to take their place as essential and valuable health care educator and provider.

Despite COVID-19, people need access to care. Once the vaccine is found, things will normalize but with some added positives. Hopefully, we will not forget the important lessons learned during these very challenging times.

Jackie Joachim, COO ROI Corp

JACKIE JOACHIM

Jackie has 30 years of experience in the industry as a former banker and now the Chief Operating Officer of ROI Corporation. Please contact her at Jackie.joachim@roicorp.com or 1-844-764-2020.

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Contactless Intake, Payment, and Reputation Management for ECPs

Digital Marketing, Marketing, Practice, The Patient Journey

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With the economy reopening, one of the biggest questions for clinics looking to ramp up their business again is: how do I keep my customers and employees safe? And how can I get my revenue back to what it was pre-COVID? With safety being top of mind for customers now, clinic owners can remove fears entirely with physical distancing measures and hygienic practices, while simultaneously attracting new customers and boosting revenue.

A recent survey of over 1000 consumers was conducted by OneLocal and results indicated that 63% of people said they felt unsafe sitting in a waiting room with other people. What this necessitates is letting customers in one at a time. Significant costs are added to the business from having to spend salary on staff checking in clients manually and ensuring that everyone is kept safe.

In the same survey OneLocal conducted, 89% of people said they prefer checking in over their phones versus having to stay in a waiting room. So by sending out check-in forms via text message, clinic owners are able to eliminate the physical waiting room and efficiently take in customers, without having dedicated staff to manually manage how people check-in.

 

 

 

LocalVisits manages the check-in and payment process digitally, so face-to-face contact is minimized and customers can come to your business efficiently.

 

The check-in link contains customizable Surveys that can screen users for COVID-19 symptoms and can even be tailored to your health forms. When it’s safe to do so, you can let your customers know when to come in without having to clutter waiting rooms.

 

 

 

 

 

 

 

Lastly, the software sends a text message to handle the whole payment process, so that instead of using a point-of-sale system which comes into frequent physical contact with staff, everyone is kept physically distant during this part of the process.

 

 

 

 

 

The whole process is managed simply in a virtual waiting room, so the staff knows where customers are in their journey, whether it’s checking-in, booking an appointment, or collecting payment. Staff can monitor cancellations and send check-in links when the clinic is ready to take in new customers.

After you leveraged physical distancing software to ensure everyone is kept safe, the next step is to make your safety processes visible to customers. There are a handful of marketing strategies that you can pursue, but it really boils down to gearing your online presence towards safety. You can add to your homepage exactly what physical distancing practices you are using during your processes. Use keywords like “safest work practices in Toronto”  and “COVID safe clinic in Toronto” to help you rank on Google when people look for the safest clinic in your area.

Last but not least, when the payment link is sent out, you can send automated Google review requests with reputation management software. Right after the payment, the customer experience is top of mind so if you’ve done your job right, the chance of them leaving a positive review is higher then ever. Automated software like LocalReviews can prime users on their experience and ask for testimonials via the same text messaging system. When new customers search for a clinic in your area, they will see testimonials from customers who can attest to your safety measures and overall good experience.

About OneLocal

OneLocal helps thousands of small businesses across North America get more customers with a series of best-in-class and affordable marketing automation tools. As part of an effort to help restart the economy, OneLocal is currently offering many of their tools for a fraction of the price and creating new tools to help clinic owners operate more efficiently. They are a Toronto-based tech company that has been around for over 5 years and is backed by the same company that backs Airbnb.

MATTHEW CARNEVALE

Matthew Carnevale is the VP, client relations for OneLocal, based in Toronto.

With safety now being top of mind for clinic owners, employees, and patients, it is important that you provide an experience that makes your customers feel safe. Find out how OneLocal has been helping clinic owners implement digital check-in, contactless payment, and virtual waiting rooms through LocalVisits by filling out this form:  https://info.onelocal.com/ECP

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Planning for the Unexpected

Practice, Resources

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I am an optimist. I have always had a positive attitude and I absolutely believe it is the best way to go through life. My goal is to live a healthy and active life until at least 102. However, at the same time, I have to be realistic about the situations that often arise in everyday life. We do not live in a perfect world. As a company, we have had to deal with unfortunate situations where an owner suddenly faced a crisis forcing him/her to sell.

The purpose of sharing my thoughts in this article is not to change from being an optimist to a pessimist. Quite the opposite. I will continue to choose not to focus on the negative aspects of life. However, I and by way of this article, encourage you not to ignore them.

When the owner of a practice suddenly takes ill or unexpectedly passes away, the people left behind should be able to grieve without having to worry about the office. They should not have to also determine how to handle the practice that you are no longer in. I am encouraging owners to be brave and plan for the worst. Think about this in the same way pilots and people who climb Mt. Everest do. In both cases, people must be trained in how to handle difficult and dangerous situations. Great pilots, as well as great mountain climbers, hope for the best but plan for the worst!

Our purpose at ROI Corporation is to assist practitioners in selling their practices when they are ready to exit ownership. It is a truly wonderful privilege to witness owners transitioning on their terms to pursue their dreams. Unfortunately, a terrible diagnosis or death can happen unexpectedly. Staff are completely overwhelmed and unprepared to manage the situation which will force the goodwill to erode very quickly. The tragic news of the recent plane crash in Iran showed us firsthand how offices and their staff react to horrifying news.

So, let’s be positive and optimistic and prepare for things that could happen. Every owner (and person quite frankly) needs to be proactive and put a plan in place that would protect them and their loved ones in the event of their death or severe disability. The following are simple things to implement which will help ensure some preparation, should the unthinkable occur:

1) A will and an estate plan. No further comment required.
2) Appropriate insurance that will cover practice and personal debts.
3) Owners, please appraise the practice. Knowing an accurate value is key particularly for potential insurance claims or for the sale of the office.
4) A Letter of Direction. This should be kept on file with your lawyer and practice broker. This document is usually a brief letter that states what steps need to be taken upon death or severe disability. It is fairly straightforward, and more importantly gives clear direction for who needs to do what to protect the goodwill. A broker can get started immediately and can minimize the loss of value to the practice.

By having this information organized, your family does not have to bear the burden of trying to make key decisions under massive duress. Unfortunately, when staff are upset, colleagues are trying to fill in to serve patients, or looking for a locum or associate to fill in, the uncertainty of such a tragedy, can expose the practice to easily lose 20% of its value per month.

If this all sounds complicated and difficult, just take things one step at a time. Start with just one of my four recommendations. Remember, the goal is to plan for the worst, so your family does not need to.

Jackie Joachim, COO ROI Corp

JACKIE JOACHIM

Jackie has 30 years of experience in the industry as a former banker and now the Chief Operating Officer of ROI Corporation. Please contact her at Jackie.joachim@roicorp.com or 1-844-764-2020.

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Insight with Ken Barbet

Insights

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Experienced C-Suit Executive

Previous positions in the Beverage Industry

CEO of Eye Recommend for an 8 year period from 2009 to 2017

Believes that Optometrists deserve a more rewarding professional career and a better personal lifestyle

Ken Barbet

President and CEO, Vision Alliance  Partnership

University of Calgary and Queen’s University

 

Describe your favorite vacation destination?

I love to travel and explore new destinations and old favorites, especially when I travel for what I call “Festival Travel”.  This is when you travel to experience a “once in a lifetime festival” that showcases experiences that cannot be replicated anywhere else.  I have experienced quite a few of these festivals (New Years Eve at Times Square, Octoberfest in Munich, Running of the Bulls in Pamplona Spain, the last day of Mardi Gras in New Orleans, etc.) and am always looking for other ones to experience in the future.

Favorite TV Show / Netflix Series?

Ozark has been my latest Netflix passion – waiting for the next season to start and then binge-watching every episode until the season is complete.  I enjoy movies and series where I really cannot guess what twist or turn is coming next. It gives it a freshness and a reality to the characters and their predicament.

Favorite past-time/hobby?

I enjoy playing golf as often as I can.  Golf is one of those activities that allows you to spend 4 or 5 hours with people you enjoy on golf courses in some of the most beautiful and secluded environments around. Once you start playing, everything else melts away so that you can focus on the game.

What metrics do you track in order to gauge your success?

Metrics are critical to business success.  By choosing and tracking the right metrics, you can identify when things are off track or going off track.

These seven metrics can be used alone to quickly and easily monitor the business or if one of the metrics seems off track, then each can be further broken down into more metrics to help you zero in on the issues that need to be addressed:

  • Appointment Book Efficiency – used to ensure a proper blend of appointments are made that optimizes the doctor’s time
  • New Patient % – used to understand the effectiveness of the practice marketing (for both word of mouth and your website/digital marketing)
  • CL Sales % – used to ensure a balance of new fits and re-orders
  • Conversion Rate – measures conversions from appointment to other purchases
  • Revenue per patient – measures what each patient contributes to your revenue
  • Labor Cost % – measures the adequacy of staffing levels
  • Net Income % – measures the profitability of the practice and your return on investment (Note: should be calculated after all doctors and owners have been compensated)

How do you choose who to hire in your office?

I think hiring is the most important skill a leader needs to develop – nothing gets done without having an incredible team around you, and it all starts with hiring.

I think a blend of current industry skills, passion and personality is what makes for the best employees. So, I look for the passion and personality first and then see if the industry skills that the candidate has are enough to start with.  This often means that I am hiring people who need to learn the eyecare portion of the business, this is okay with me as I really enjoy training people and watching them grow and advance from within.

What habits make you a successful person?

My success comes from the people and teams I have worked with over the years – I cannot think of one thing I did all myself. This means doing things that make the people and teams part of the strategy:

  • Success comes from creating a new path despite the naysayers who want to always do it like it has always been done
  • Being successful means taking responsibility when things go wrong and giving credit to the team when things are successful
  • Taking care to hire the right people with passion and personality
  • Having the team accountable to each other as well as the leader
  • Spending more time listening what my team thinks than telling them how we are going to do it

What advice would you give a new grad today?

You have spent 4 years learning to hone your chosen profession, now spend some time learning the fundamentals of business and how to lead and manage people.

Over the years, I have interacted with hundreds of brilliant optometrists who are best-in-class at providing exceptional eye care to their patients but who struggle with the hiring and management of staff, practice leadership and business principles. In fact, from my perspective only about 10% of optometrists can do both at the same time.  Those able to do both are often the most professionally satisfied and well-compensated optometrists in Canada.

Many new grads confuse being the individual who defines and implements the medical and clinical standards for the patients with practice ownership.

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How a Leasehold Agreement and its Clauses can Impact Your Exit Strategy

Buying-Selling A Practice, Finance|Wealth, Practice, Real Estate, Resources

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A client of mine is having anxiety about her expiring premise lease. She wants to stay – it’s a great building and she invested almost $1 million in leasehold improvements and non-moveable fixtures. But the landlord is inserting a building demolition clause in all the renewal leases. For someone who’s three years from retiring and planning her exit strategy, moving isn’t part of the plan.

As I explained to my client, a landlord wants AAA tenants – those who have a solid track record and pay rent on time – particularly a successful professional like her. However, all landlords also have contingency plans to sell a building and they want the right to relocate you within the building (RELO) or terminate your lease and deliver the property vacant, should the new owner want to reposition the building or demolish it (DEMO).

These clauses and rights favour landlords by making a building more valuable. Tenants hate these clauses; landlords and their realtors love them. This doesn’t discount the fact that full occupancy and high rents are still the main priorities for a landlord. But a RELO and/or DEMO clause makes the property more valuable and/or saleable to multiple interested buyers, which is another high priority of the landlord.

As a tenant, you won’t know the details of the DEMO clause specific to your lease until the renewal lease proposal arrives. My client’s current lease says that her landlord does not have to provide the renewal lease proposal until precisely six months before the current lease expires. This give tenants very little time to plan for relocation and a savvy landlord knows that. Landlords have the upper hand in these situations.

In working with my client on her exit plan, we want at least 10 years of tenancy from the date she sells in order to obtain 10-year-term financing for the buyer. Ten-year-term financing allows for increased practice sale prices. But it’s more likely that we’ll get three to five years of secured tenancy, after which the DEMO clause (or “threat”) will arise. Assuming my client sells in about three years, as per her plan, the new owner will then have as little as one or two years before being forced to move. And this, of course, will substantially reduce the sale price of any practice.

There’s the option to move and purchase a property. But that means starting the hunt for a business space now. For my client, that means about one year to find a nearby property, buy it and design/build a new office. It’s tight but it can be done. And buying real estate is always a good move, even if it is a long-term investment (think 10 years or more) and her career exit plan is three years.

It may seem to be a conflict, but don’t attach career to a real estate investment. These are
separate decisions with differing commitments and timelines. Real estate can generate income for you and your family for many years. Your practice only generates income for you while you own it and to a lesser extent, if/when you become an associate with a new buyer.

The alternative is to stay and gamble that the landlord will not evoke the DEMO clause (a 50/50 probability) until 2023 or 2024, based on what might be happening in the surrounding real estate area. Or there’s the option to sign a new lease in a neighbouring building, move and custom build another office (as my client did 20 years ago). To do so means abandoning the leaseholds of the current suite (estimated value in the hundreds of thousands of dollars) and getting a bank loan to build the new office – and be at the whim of another landlord.

Landlords will always position their holdings for resale and will not accommodate tenants who occupy a relatively small portion of their building (like my client’s practice, which is just 3% of the entire property). And so, as I suggested to her, buying her own property may be the best move (quite literally). The alternatives for professionals in leasehold agreements – who are also planning their exit strategy and career retirement – are limited.

Find something in the area you want and secure a long-term real estate investment. The bonus is that it’ll become a second retirement income once the practice is sold. As has been said by a billionaire oil tycoon, “If it appreciates, buy it. If it depreciates, lease it.” Don’t let your practice depreciate.

TIMOTHY BROWN

is Chief Executive Office of ROI Corporation Canada’s national professional practice and brokerage firm.

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