I remember it was Dr. Justin Bazan who came to SUNY and lectured about how to start an optometric practice. During his lecture, he recommended his favorite books that would help new grads start a practice. One of his recommendations I went out and bought immediately - 201 Secrets of a High-Performance Optometric Practice by Bob Levoy O.D. This book was profound for me, and to this day I pick it up on a quarterly basis to help keep me on track. 5 stars, highly recommended, I love this book.
- Matthew Geller O.D., Founder, NewGradOptometry.com and CEO, CovalentCareers
5 Optometry Business Lessons You Don’t Want to Learn the Hard Way
By: Bob Levoy
In the course of my travels I’ve asked countless optometrists what regrets if any, they’ve had about their practices, and what they would do differently if given the chance to do so. Here are a few of those business-related regrets.
1. “I regret postponing the start of my own practice by working for a commercial chain for as many years as I did.”
By taking such jobs, these ODs hoped to get on a financial footing - pay down their college loans, get their mortgages under control and their families in comfortable circumstances, before eventually, opening their own practices. In time they did but, somehow that early pledge to open their own practice after a couple of years kept getting deferred. “Just one more year. . .” or “ Now isn’t the time to open a new practice.” they said. It wasn't too long however, before some of these optometrists confessed they were tired of it all. But, they found themselves stuck. They’d managed to expand their lifestyles to fit the salaries they were now earning and it was really difficult to wind that back and start over again. They became victims of what I call The Golden Handcuff Syndrome. Some did leave to start their own practices and in time, not only matched their previous incomes, but exceeded them. As one O.D. confided, “It was the best gift I ever gave myself.”
Reality check: Being a practice owner is not for every OD. There are many who enjoy seeing patients, diagnosing and prescribing but, don’t want to concern themselves with the business aspects of practice. Working as an associate for an OD, MD, commercial firm or HMO/PPO are logical alternatives.
2. “I didn’t have a lawyer check the contract that I (foolishly) signed with a doctor with whom I signed on as an associate.”
This was another surprisingly common complaint. As a Florida O.D. told me, “There were things we should have discussed and agreed upon beforehand, such as the number of hours I was expected to work (including evenings and weekends), the number of new patients I was expected to bring into the practice, civic associations and community activities in which I was expected to actively participate, the time frame involved in my becoming a partner, and most importantly, the “do not compete” language in the contract that in the event I chose to leave the practice (which I eventually did) prevented me from opening a practice in the same community. It was a business lesson I learned the hard way.”
Action step: Sign nothing until you have an attorney review the contract.
3. “I did not have a retirement income plan.”
I’ve spoken to dozens of optometrists who wished they had been more serious about planning for retirement. Some of them are still working in their 70's and even 80's, long beyond the time they had hoped to retire. The more fortunate ones started young and took advantage of compound interest to create “choices” for themselves. They created and implemented a retirement income plan. They avoided a lifestyle that would create financial pressures and unnecessary stress. Today, they’re enjoying a comfortable and highly satisfying retirement.
Action step: Align your savings and investment strategy with your retirement goal – preferably with the help of a certified financial planer.
4. “As I approached retirement, I worked fewer hours and let the practice slide. When it came time to sell, I couldn't get a price close to anything I had expected to get. I had to settle for a lot less and to my deep regret, my retirement has fallen far short of the lifestyle I wanted."
With debts paid off, the children educated and on their own, it's tempting to just "coast" until retirement. What happens is that slowly, almost imperceptibly, the practice starts to deteriorate. "The office and equipment become out of date, and look it. Patients who have moved away or died are not replaced and that can greatly ding the sales price", says Gary Ware, a professional-practice broker in Danville, Calif. "Buyers want potential," he says, "but they pay for history. A practice that has a declining number of patients won't fetch top dollar or necessarily appeal to buyers.” When the day arrives to sell the practice, the reality is there's not much left to sell. The plans for retirement go up in smoke.
Action step: Have the practice appraised at least 3 to 5 years ahead of time. You may learn that the value of the practice falls far short of the amount you had in mind, giving you time to take corrective steps.
5. “I sold too soon.”
The doctors expressing this regret discovered later that their net worth and the interest and dividends that it would generate, were not adequate to maintain the standard of living to which they had become accustomed. In order to maintain that life style, they would have to either deplete their net worth faster than they had expected and possibly outlive their savings, or return to work. The worse part of this scenario was that when selling their practices, they invariably signed covenants not to compete, leaving them a choice to either work as an associate in an area where they were unknown, at a salary well below what they were earning in their own practices. Even worse, they were forced to live more frugally than they were used to or wanted to do.
Action step: Avoid the regrets that can result from do-it-yourself financial decisions. Hire professional advisers. They’re worth it.
Bob Levoy is the author of 7 books on practice management, including 201 Secrets of a High-Performance Optometric Practice
- From a review by G. Timothy Petito, O.D., in Optometry (published by the American Optometric Association) – “I would recommend this book to anyone in practice or who is contemplating practice. If you could successfully integrate just one of the 201 management pearls from this book, it would be the best money invested this year.”
- From a Review in Optometric Physician by Arthur B. Epstein, OD, FAAO, Chief Medical Editor – “Bob Levoy has been a true practice management guru for longer than many of us have been practicing. His latest work, 201 Secrets of a High-Performance Optometric Practice (Butterworth-Heinemann), may be the most practically useful practice management text ever. Chock full of helpful and direct advice from many of the profession’s leading practitioners and focused by Bob’s keen insight, 201 Secrets is a 250-page book that’s sparse on words but amazingly rich in content. I can’t imagine an O.D. in practice today who would not benefit from reading–and perhaps rereading–this wonderful work. Highly recommended!