ecadmin, Author at Eye Care Business Canada

Getting the Pulse of the Practice

When we are analyzing the health of a practice, the first thing we look at is the big picture of the Practice Performance. That is, we look at how much revenue is brought in on a monthly basis, how many patients are seen, how many doctor days were available, resulting in how much profit. It is amazing how much information we can glean by looking at this information on a monthly basis and by comparing it month over month and year over year.

From this overview, we can get a sense of trends happening in the office and start to dig deeper.

For instance, if we see the number of patients increase but revenue decrease, we know that the practice is working harder not smarter. We will then assess the number of patients being seen each day. In a full scope, primary care practice, seeing too many patients often translates into less revenue – there is a direct correlation. Staffing is also considered. If we are understaffed, it is possible that we are not able to offer as much assistance to each and every patient, which would also negatively impact the amount of revenue generated by the practice.

If we notice that the number of doctor days available in the clinic is less than the previous year, we will confirm that this was anticipated – either because of vacation or because an associate left the practice. This change often has the biggest impact on staff incentives. If the staff incentive has been set up to incentivize based on growth, the staff is unlikely to meet the goals in this scenario. This is one of the reason’s that we recommend that incentive programs be based on number of doctor days rather than straight practice growth.

If we find the doctor days are going up and revenue and number of patients is remaining fairly stable, we might suspect that we need to increase our marketing efforts. Digging deeper into the patient numbers and evaluating which efforts are the most successful would be our next logical step.

As with any business, there are ebbs and flows in an optometric practice business. Having access to data that will easily show you the pulse of your practice will help guide your business as you experience these constant changes.

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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Insiders’ Revelations: Your practice has untapped potential and hidden revenue – exploit it!

Buying-Selling A Practice, Practice

We were talking to a potential client the other day who said that he did not think his business was worth much. He never imagined that he’d sell it for a profit. We asked what his annual sales are, what his net income is and whether he had thought about establishing a transition plan. He said that his kids had planned to take over the business, but instead moved on to other professions in technology and software and felt that his “old-fashioned” business system wasn’t right for them.

We inquired further. I asked whether he had a loyal, repeat client list. We asked if he had a continuing revenue stream. We asked if he had ever thought of selling to his employees. Perhaps one of his competitors might be interested?

He was stubborn and proud. He paid nothing for the company because he started it on a bootstrap budget more than 50 years ago. He never borrowed from the bank throughout his career. He sacrificed on food, cars, the house he lived in and never overspent, living well within his means. His business was founded on sweat equity.

As we conversed, he began to reveal more and more, especially after we asked about his client list. He proudly confirmed that he had a very vibrant list: a steady, loyal clientele that had served him well for many years. We asked again about his annual revenue, which he was reluctant to reveal. We respected his reluctance to disclose his financials; as we are brokers, he must have thought we were just trying to get a business listing.

We talked more about his industry and where it was in terms of growth or decline. Eventually he related that he’s in a high-growth industry, something he knew all along yet had never exploited to its full potential. He admitted that he did not want to buy the equipment, hire more staff and move toward computerization to upgrade to the necessary technology— namely, do the things that would allow him to face his new competitors. He readily acknowledged that, while his long-term clients remained loyal to him, lately some had concerns about his slow delivery and service. They never complained about his quality nor his price, only about not getting his goods fast enough.

He further admitted that he was slow but he was good. In fact, he said, “I’m the best” and we believed him. So, what do you do? What would you do—buy his business? Is his business likely to fail because of the competition? Should he upgrade?

There are at least two mindsets on this, depending on whether we’re discussing a business or an optometric practice. One would believe this business is an easy picking to compete against. The other thinks of buying this business and doubling the revenue.

As a broker and appraiser these are the types of insights that present themselves when meeting with business or practice owners. The hidden value of the business is often uncovered with minimal effort. Practitioners or entrepreneurs regularly want to tell their stories and confide their trials, tribulations and triumphs over the years. One thing they’re not able or likely to do is tell a potential buyer how much business they left on the table. They might humble-brag about it and say, “If somebody younger or more competitive takes over, they will do better than me.” This revelation is left to the third party acting for the seller, and that’s where a broker comes in.

The truth is, every business or practice has untapped potential and hidden revenue. You can ethically exploit it yourself or a buyer can. Your call.

TIMOTHY BROWN

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

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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Hiring for Your Practice – A Confirmed Headache

Human Resources, Talent Acquisition

What hiring trends are emerging in 2019? The 3.8 million members of Alignable.com, the largest social media network of small businesses in North America, have identified three key trends from surveying nearly 6000 small business members. Do these themes sound familiar?

Trend 1: Hiring surges are predicted among many small businesses in the U.S. and Canada for the rest of 2019.

According to the survey results, 33% of small business people polled want to hire even more people than they had planned in early 2019. However, 59% of those hiring say it’s a growing struggle; finding the right people is a huge problem.

In Canada, New Brunswick and Saskatchewan businesses anticipate being the most active recruiters while Manitoba trails the pack. (see table below )

Trend 2: Small business owners who are hiring are having a tough time filling their open positions.

Getting a good number of quality candidates a problem? You are not alone. Unemployment levels remain low and are getting lower. The June 2019 unemployment rate nation wide fell below 5% in June and the trend is down.

Trend 3: Despite the heightened demand for help, thousands of Alignable members 50+ are still struggling to secure full-time or even part-time positions, pointing to blatant ageism.

Tim Brennan, Chief Visionary Officer of Eyeployment.com said the Ageism called out in this survey doesn’t surprise him, noting, “one of the most obvious visual discriminations is age and it’s a weak predictor of behaviour”. Employers may perceive that older candidates may want higher pay and employers do not necessarily value the experience and mentorship attributes an older employee might bring to the team.

Brennan’s hiring technology provides the ability to “meet the candidate before you see them”, which reduces all forms of visual bias and improves your odds of getting talent stars for your business and avoiding the passengers.

Brennan advises, it always better to get the best person possible rather than “settle” for someone who walks in your door and looks the part particularly in a tight labour market. Making a hiring mistake gets amplified under such market conditions.

% of Small Businesses that plan to hire more than initially planned in 2019.

NB – 60%

SK – 40%

BC – 31%

AB – 25%

QC – 25%

NS — 25%

ON – 24%

MB – 20%

Source:
https://www.alignable.com/forum/hiring-expected-to-escalate-among-33-of-smbs-for-the-rest-of-2019

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The Wisdom of A Seasoned Staff Consultant

Human Resources, Managing Others, Practice, Resources

There is a resource reference in the summer issue of Profitable Practice magazine entitled A Startup’s Secret Weapon: Retirees by Liz Brody. Recent U.S. Bureau of Labor Statistics reveals that people 65 and older lead the way as the fastest growing segment of the American labor force. For the most part, these people have exited their former jobs and careers for retirement. Many, it seems, want more than a sunny beach, an afternoon nap or satisfying round of golf. They are not ready to go quietly into retirement and believe they have much to share given their previous experiences.

As a consequence, there are a number of companies today (YourEncore, Empowered Age, Patina Solutions, Work At Home Vintage Experts etc.) that are staffed with these “retirees” who bring expertise from a wide variety of business jobs and careers. They act as consultants as characterized by Liz Brody “who have been there and done that”. Their clients are often young millennial-aged entrepreneurs with startup business problems. These young gurus often face a business impasse they can’t seem to bypass and are stymied. While they are often superb risk takers and decision makers, they realize they need help and that more brain power and another pair of eyes is required to get them mobile again.

All entrepreneurs try to invent a new product, service or process or at least apply an innovation to an existing one. In doing so, they are repeating a journey that many others have taken before them—a few successfully and the many who got hung-up along the way. Health care practitioners are constantly searching for new and better ways to deliver health care service. Many find a successful track of operation either by perseverance or by enlisting the aid of others.

The above scenario got me thinking about my own company, which my father started and eventually sold to me. Recently my dad and the company received recognition for 45 years of distinguished service to the practice sales industry. In my case, he was always there in the background giving me the wisdom of his experience. In addition, the company had—and still has—a number of senior associates (retired dentists for the most part) who left dentistry to start a new career in practice sales. This core of elders was invaluable to the growth of our company and allowed us to be successful by avoiding many of the impasses all businesses face.

To my mind, no matter what business or health care practice you are in, it is wise to seek out the advice and ideas of both the young and old. Health care graduates today are schooled in the latest procedures and technologies and bring a contagious enthusiasm and a refreshing willingness to share with and learn from their older peers.

TIMOTHY BROWN

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

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New US Tariff Threats on China Will Ripple Through Canadian Optical Market

Finance|Wealth, Resources

Trump’s tariff tweet on August 1^st brought the temporary trade war truce with China to an abrupt end by indicating the US administration’s intent to levy 10% tariffs effective September 1 on $300 billion of Chinese goods imported into the US. These new tariffs, if implemented, will impact virtually all spectacle frames, sunglasses, lenses and other optical goods entering USA directly from China, or indirectly through third-party countries including Canada.

While the industry’s representative trade group, The Vision Council, had lobbied hard to exempt optical goods from the threatened tariffs, it appears unlikely that optical goods will be spared.

In an August 1 email to members, The Vision Council acknowledged that it is unlikely that optical goods will be removed from the tariff hit list and advised members to “plan accordingly”.

China has indicated they will respond in kind if the tariffs go into effect September 1, but many analysts suggest that China is “slow playing” the trade tiff in order to “wait out” this administration until the 2020 US election is concluded.

Impact on Canada?
While Chinese goods imported directly to Canada are not impacted, many products destined to Canadian ECPs warehoused in US facilities will be subject to the tariffs. US importers will need to decide if they absorb the tariffs at the expense of profits or try to pass them on to their customers through increased prices. There have been reports from other industries that temporary “tariff surcharges” will be applied, similar to fuel surcharges applied by shipping services firms such as ICS, FedEx and UPS. Resultant price increases will most certainly ripple through the supply chain and increase both wholesale and retail prices.

Canadian based retailers and distributors importing and warehousing in Canada will not be directly impacted. In fact, some Canadian Optical distributors see opportunity in the continuing trade clash.

Retailers and suppliers reliant upon supply chains with US facilities will be adversely impacted providing a potential advantage to Canadian distributors, though it may be temporary.

Look for the September Issue of Optik Magazine which delves into the Canadian optical market impact of the USA-China trade war.

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Analyzing the Performance of your Website’s Content

Marketing, Resources

In today’s world, every optometric practice needs to have a website. While there was a time a health care practitioner could hang out a single or put an ad in the phone book and patients would find them, that has changed. Now we rely on online searches to find a business or health care provider.

In Canada, there is a 60/40 for online searches for a business. 60% of people who do a search online have a specific business name in mind before they even search (via word of mouth, a returning client, etc.). 40% of people have a need for a business or service and do not have a name in mind. They don’t even know you exist.

For that 40% of customers who don’t know you, you should be laser-focused on two things:

Getting your business found where and when they’re looking, and creating ads that entice them to engage with your business.
Post. Click. Conversion.These are the results that let you know how effectively you have engaged your intended audience.

For the first point, Google Adwords and Facebook ads are the most effective. These are the ads that will pop up and be displayed to the consumer when what they are searching for matches the ad and the key words you have created and paid for.

Post Click Conversion is the measure of how well your website explains what you will do for them. It evaluates how well the information on your website is meeting the needs and interest of the audience reading it.

The trick is to try displaying information in different ways in order to find what will resonate with your audience. Ask questions of your audience and encourage them to contact you. Put your phone number, contact form, and email address everywhere. Then use the results of your post click conversion analytics to evaluate what is working and what is not. If you have pages of medical information that no one is clicking into, maybe this information is irrelevant on your website. Conversely, if you find that your patients are spending a great deal of time reviewing the brand names that you carry, you may want to consider adding more information to that page.

If you truly own the responsibility of finding out what happens when people visit your website, you will have a lot more success marketing your business.

ERIC HARBOTTLE

With 15+ years of marketing experience, owner of Addison Marketing Solutions and co-founder of MarketingforOptometry.com Canada’s newest marketing agency option for Optometrists, Eric Harbottle knows what it takes to succeed in a robust and confusion digital world.

Coming from a strong background working and consulting with some of Canada’s largest marketing agencies to offering SMB solutions at the ground level with his boutique agency, Eric is able to understand the needs of every level of client with unique optimism and an experienced view as a business owner himself targeting KPI’s and goals to help every client achieve success.

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Overhead Costs

Accounting Basics, Finance|Wealth, Resources

As a small business, overhead costs are just a part of doing business. While many of your overhead costs are fixed costs that don’t vary much year to year, it is still important to analyze these costs periodically.

Overhead costs include things like rent, utilities, office supplies and software maintenance. As a guide, aim to spend no more than 8% of your Gross Revenue on Overhead Costs.

How long has it been since you reviewed what you are currently spending on office supplies? You will be surprised how much you spend on this. Track it to see how much you spend. This category includes everything from pens and paper to snacks and refreshments. Ultimately, we want you to continue to offer all the extras that create your unique patient experience. We are just suggesting that you take the time to price shop your options. For many of these items, there is a bulk buying opportunity. Creating lists and buying in bulk can save the office quite a bit of money versus buying ad hoc.

Sometimes “just in time” supplies can save you money too, depending on the situation. At home, we have signed up for an ink service. The printer is connected to WIFI. When we are starting to get low on ink, a message is sent to the company to send out ink. We are limited to the number of prints we can do per month (300) but if we don’t use them all, they carry over to the next month. This ensures that we always have ink when we need it and saves me from impulse purchases at the store!

The Little Things Can Add Up.

Another way to save money in Overhead Costs is to retrofit your office lighting. For many offices, cabinet lights are on all day long and use a lot of energy. Consider replacing the GU19 bulbs in the cabinets with the LED version or LED strip lighting. Replace your florescent bulbs in your grid ceiling with LED flat panels. This could save you between 50-75% of electricity costs used on lighting and will generate no heat. These bulbs are also less maintenance. They can last 50,000 hours (10 years) without any maintenance. The cost to do this has come down significantly so that is it almost equivalent to what we used to pay for traditional bulbs.

For some offices that provide cell phones to their employees, shopping cell phone plans can present another opportunity to save. There are bundles that will allow employees to share the data you are paying for.

We get used to using the same things but it is possible that there are better priced options. Often there is some down time over the summer as doctors take vacation. This could be a good summer project for staff with extra time on their hands.