Life After COVID-19

Practice, Resources

|

0
(0)

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.

Share:
Rate:

0 / 5. 0

Is Virtual Dispensing a Possibility for Your Practice?

Differentiation | Business Strategy, Digital Marketing, Marketing, Practice, Products | Services | Industry News, Technology

|

0
(0)
Virtual dispensing on ZOOM

Tele-optometry was thrust into the spotlight by COVID-19 social distancing directives. Can the underlying principles of telehealth be adapted to eyewear dispensing?

An enterprising optician in Toronto believes they can, has the experience to prove it, and the training program to make it happen.

Wendy Buchanan, RO

Wendy Buchanan, Registered Optician and Image Consultant, runs a successful mobile dispensing business in the Greater Toronto Area. She combines her passion for fashion and her optical background into a unique business that relies upon personal in-home or office eyewear style consulting.

Wendy built her successful and unique approach over a number of years, but in March 2020, like all other eyecare professional practices, her business came to a sudden halt. After a few weeks of idle time, the reality of COVID began to sink in and her entrepreneurial instincts drove her to act.

Listen to Wendy Buchanan, Toronto-based Optician, explain how virtual eyestyling evolved as a COVID-driven imperative.

Leveraging her well-established relationships, Wendy connected with clients to set up ZOOM meetings. Undaunted by COVID  constraints, she began virtual eyestyle consulting appointments. She presents eyewear options online,  sends curated high fashion frames to her clients’ homes and closes the sale, often for multiple pairs, with a follow-up virtual appointment.  She has even started generating client referrals.

Success is not accidental!
Buchanan’s success did not come without years of experience and preparation.

Leveraging her image consulting training and optical experience, Wendy had developed a proven process for eyestyling clients, called SpecStyles. She has taken her original platform further through the development of an ECP training program for motivated fashion oriented eyewear professionals to help them stand apart.

While the “Be Spectacular™  Image and Eyewear Styling for Optical Fashionistas” was nurtured by Wendy’s unique background, she believes the techniques are fully portable to professionals with a passion for eyewear.  “The program will help boost confidence in styling clients with eyewear they love and an experience that has them referring their friends. The image consulting component can be taught,” said Buchanan

Notwithstanding the trend to medical specialization in Optometry, the typical OD practice still relies upon dispensary eyewear sales for a substantial proportion of their revenue.

Optometric practices with a predisposition to high-end fashion eyewear might well benefit from a proven methodology to close the revenue gap by incorporating virtual eyestyle dispensing.

Learn more about the Be Spectacular Advantage Program.

Share:
Rate:

0 / 5. 0

Contactless Intake, Payment, and Reputation Management for ECPs

Digital Marketing, Marketing, Practice, The Patient Journey

|

0
(0)

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

Share:
Rate:

0 / 5. 0

Three Common Hiring Practices that are Completely, Utterly Wrong

Human Resources, Talent Acquisition

|

0
(0)

These three commonly-held beliefs about hiring have been around for a long time. They might have been good advice to someone, at some point in time… but if they are part of your unconscious belief systems, you’d best revisit your assumptions.

The thing about ‘conventional wisdom’, is that all too often it relates to things we’ve been doing a certain way for so long we don’t even remember the original assumptions any longer. It’s kinda like autopilot – you set it and forget it. There’s an awful lot of ‘autopilot’ in our lives. Sometimes that’s OK – and sometimes it can hurt you.

Here are three areas where you may be on autopilot without realizing it… and where you may want to consider taking back the controls and charting a different course:

1. The ideal candidate will possess X years’ experience in the job/function/industry.
How often, in your advertising and in your mindset, to you impose the ‘experience required’ rule? How critical is that previous experience, really, or would you be better off to hire someone with a great attitude, a diversity of experience they can bring to bear in a creative way, and a track record of learning quickly and figuring things out? In many cases, that experience that people bring to the table may actually be a liability, in the form of bad habits and narrow beliefs.

2. Hire the very best you can afford at all times.
This may seem like sacrilege, but think carefully for a moment. You have a certain amount you can afford. Stretching financially to hire a rock star can sometimes backfire on you in a couple of ways – one, it can starve you of talent in other areas (think baseball – are you better off hiring an expensive home run hitter, or three far less expensive players who consistently get on base?) – and two, they can sometimes be high maintenance. Are you and the rest of the team up for the challenge of managing the chemistry?

3. Referrals from your existing employees is your best source of quality candidates
Again, there is a nugget of truth here. Yes, referrals can be your cheapest source, and they can yield some of the very best candidates. Generally speaking, though, the very best referrals will only come from your very best employees. That’s because of the old birds of a feather thing – we all tend to surround ourselves with people who share our standards, attitudes and values. Top performers tend to hang out with others who share that standard, and poor performers – well, you get it. So be careful whose network you ask to tap.

There you go – a little unconventional wisdom for a change. It can be fun and useful to flick off autopilot once in a while to take a closer look at the terrain.

TIM BRENNAN

is Chief Visionary Officer with Fit First Technologies Inc, the creators of Eyeployment, TalentSorter and Jobtimize.

Share:
Rate:

0 / 5. 0

Planning for the Unexpected

Practice, Resources

|

0
(0)

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.

Share:
Rate:

0 / 5. 0

Episode 13: Update on COVID Related Employment Law Issues from Paul Martin

Eyes Wide Open, Podcasts

|

0
(0)

Paul Martin, founding partner of Wilton Martin Litigation Lawyers, updates employment law issues as clinics and employees start to reopen from the COVID-19 mandated practice shutdowns.

About the Guest

Paul is a founding partner at the law firm of Wilton Martin Litigation Lawyers. Paul provides civil litigation representation and advice in a broad range of matters to both businesses and individuals, with a particular emphasis on employment/labour, commercial litigation, professional discipline and health law.  Paul devotes a large part of his practice strategizing with his clients to ensure that they avoid the litigation process altogether. However, when litigation is necessary, Paul will work tirelessly to protect his clients’ interests.

 

Episode Notes

Host Glen Chiasson explores hot button topics surrounding COVID back to work issues with lawyer Paul Martin (Wilton Martin Litigation Lawyers).

While the federal talking-point around 10 days paid sick leave is an apparent hot new button, Paul explains why the issue is not likely to be of any immediate consequence.

Paul delves deeply into the issue of unpaid leave and how the new “Infectious Disease Leave” provision impacts employers. He also suggests how this new provision may unfold as various legal interests start to challenge the regulation on behalf of employee clients.

They explore a number of legal issues around getting employees back to the clinic, including  the implications for practice owners wanting to selectively hire back employees. Paul discusses various scenarios around employees who, for any number of reasons, may not want to return to the workplace.

Throughout Paul articulates how the Employment Standards Act (Ontario) legal framework and common law framework apply to various situations, and underlines the need for sound employment contracts with every employee.

A great overview of labour legal issues as clinics re-open.

Resources

 

 

 

 

Dr. Glen Chiasson

Dr. Glen Chiasson

Dr. Glen Chiasson is a 1995 graduate of the University of Waterloo School of Optometry. He owns and manages two practices in Toronto. In 2009, he co-hosted a podcast produced for colleagues in eye care, the “International Optometry Podcast”. He is a moderator of the Canadian Optometry Group, an email forum for Canadian optometrists. As  a host of  “Eyes Wide Open”, Glenn  looks forward to exploring new new technologies and services for eye care professionals.

Dr. Chiasson enjoys tennis, hockey, and reading. He lives in Toronto with his wife and two sons.

Dr. Chiasson splits EWO podcast hosting duties with Roxanne Arnal.

Share:
Rate:

0 / 5. 0

Insight with Ken Barbet

Insights

|

0
(0)

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.

Share:
Rate:

0 / 5. 0

How to Build Your Leadership Skills: The Difference Between a Manager and a Leader

Human Resources, Managing Others

|

0
(0)

If you want to become a leader in the workplace, you’ll need to change more than just your outlook. Becoming a true leader isn’t as simple as managing a team and delegating tasks. You need to learn how to handle stressful situations with ease and make sure that everyone in your team feels valued.

Instead of just supervising a group of people and getting the work done, you need to inspire them to do better every day and step out of their comfort zone. Your focus needs to be on building relationships with your employees and getting them to trust you.

Let’s take a look at what sets a leader apart from a manager and how to develop leadership skills in the workplace.

1. Be Open-Minded and Innovative

Leaders are always open to new things. They have a passion for creating, and they don’t shy away from experimenting with new ideas. They don’t believe in sticking with tradition and are always looking for better opportunities to explore.

They’re unafraid of the challenges that come their way and encourage their employees to think outside of the box. Managers, on the other hand, believe in sticking to what they know. They aren’t open to new changes and like to stay within their comfort zone.

2. Take Risks

Leaders are all about taking risks every time an opportunity presents itself. They understand the importance of risks and are eager to learn from their failures. They believe that risks bring forth a realm of possibilities for any business and help a company grow.

They aren’t scared of failing because they realize that every failure is a blessing in disguise. They exude an aura of positivity and create a sense of hope and curiosity in their employees.

Managers avoid taking risks because they don’t feel comfortable in newer and unforeseen territories. They believe in following tried and tested ways to solve all their problems and don’t appreciate disruptive thinking in the workplace.

3. Stand Out from the Rest

Leaders are driven by their need to stand out and be unique. They’re aware of themselves and aren’t scared of owning up to their shortcomings. They’re willing to take their business to new heights by deviating from established procedures.

They value different opinions and encourage their team members to share and explore new ideas.

Managers like to emulate their predecessors. They replicate what they’ve been taught and don’t feel comfortable with the idea of standing out. They aren’t always eager to accept responsibility for their mistakes. For them, their employees are just individuals who work for them and are expected to complete the tasks they’ve been assigned.

Bottom Line

Now that you’ve learned what makes a leader different from a manager, you can also become a great leader in the workplace by changing your way of thinking. The next time you’re faced with a challenge, you need to be willing to take risks and have an open mind to increase your chances of success.

MARIA SAMPALIS

is the founder of Corporate Optometry, a peer-to-peer web resource for ODs interested to learn more about opportunities in corporate optometry. Canadian ODs and optometry students can visit www.corporateoptometry.com to learn more.

Share:
Rate:

0 / 5. 0

Episode 12: HOYA Advice for a COVID Rebound

Eyes Wide Open, Podcasts

|

0
(0)

Ahmos Henry, Hoya Canada president, in discussion with podcast host Dr. Glen Chiasson, offers insights and advice to Canadian eye care professionals in order to bounce back even stronger in the COVID rebound.

Ahmos Henry HOYA Canada

About the Guest

Ahmos Henry is a professional healthcare business and operations executive with extensive global experience with many multinational firms.  He has held a wide range of executive positions (GlaxoSmithKline, Bristol Myers Squibb, Procter and Gamble, ratiopharm and ESSILOR).  In 2014 he was appointed as the president of Hoya Vision Care Canada.

Before joining Hoya Canada, Henry was Regional VP of Atlantic Labs, Essilor, for 8 years. Prior to the optical industry her worked for 18 years in the Pharmaceutical industry in different sales and management positions across Canada and internationally. Henry holds a Bachelor of Veterinary Medical Sciences (1987) and an Executive Masters of Business Administration (2008).

 

Episode Notes

Ahmos Henry, president Hoya Canada provides a brief history of the company. He provides a comprehensive outline of all the activities that Hoya is undertaking to help eye care professionals weather the COVID storm and resources that have been made available to help practices emerge even stronger.

He provides tips, garnered from the Hoya experience world wide, to address the stress that both staff and patients will be facing as practices reopen across the country.

Ahmos advocates that practitioners prepare to increase the “capture rate” to a level much higher than that which was observed prior to the COVID shut-down by implementing an effective, efficient and safe , “one-stop” patient experience combining the eye health exam and eyewear purchase.

A key tenant of his message is that the business bounce back needs to be strongly and deliberately focused on increasing patient satisfaction and practice revenue.

A Key Take-away: “Even patients that have been with a practice for 10 years, will be seeing everything for the first time through a new set of eyes.”

Resources

 

 

Dr. Glen Chiasson

Dr. Glen Chiasson

Dr. Glen Chiasson is a 1995 graduate of the University of Waterloo School of Optometry. He owns and manages two practices in Toronto. In 2009, he co-hosted a podcast produced for colleagues in eye care, the “International Optometry Podcast”. He is a moderator of the Canadian Optometry Group, an email forum for Canadian optometrists. As  a host of  “Eyes Wide Open”, Glenn  looks forward to exploring new new technologies and services for eye care professionals.

Dr. Chiasson enjoys tennis, hockey, and reading. He lives in Toronto with his wife and two sons.

Dr. Chiasson splits EWO podcast hosting duties with Roxanne Arnal.

Share:
Rate:

0 / 5. 0

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

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

|

0
(0)

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.

Share:
Rate:

0 / 5. 0