Tag: ROI corporation

Is Big Corporate the Best Option?

Practice, Resources

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We live in a time of rapid change and dislocation that rivals any period in recent history.

Change is Everywhere and Accelerating, but…
Anarchists right and left want to dismantle something that has proven to work—flaws and all. The U.S. is in a state of flux politically with sweeping implications.

The pandemic has wreaked havoc globally. Big Tech companies provide many platforms where people can publish both their best and worst thoughts and actions—AND allows for the promotion or demotion of a current demagogue seemingly at will.

Businesses have been dismantled, diminished and destroyed by events beyond their control.

Big and corporate for some of us means better and necessary, while others lament over what happens to small, local businesses and entrepreneurs with long standing, often family-based, individualized values.

What is fair for the individual health care practitioner who wishes to continue the tradition established by sole practitioners over many years of personalized care centering on the aforementioned individualized service and care model?

Is Growth the Only Measure of Success?
Many professionals do not want to go the “corporate” route and watch their creation absorbed by a larger entity that pays no homage to tradition.

The value of passing the torch to a like-minded “pro” who may take care and service to a higher-level building on the sweat equity of the former doctor. This does and can happen.

Many economic gurus are now challenging the wisdom of never-ending growth as a measure of success. We all know that bigger is not always better—that many things get lost in this process.

Where to Draw the Line?
Practitioners accept that there is a time when “enough is enough”.

A time to “stick to your knitting” and perfect what you do best and measure success not just in the financial rewards but also in the smiles and gratitude of your clients/patients.

This means that your goals shift from money to professional competency and increased health care achievement—something you set out to achieve all those years ago in the midst and miracle of your training to do so.

There is an alternative to the corporatization of healthcare providers and suppliers.

History has proven this and will continue to do so.

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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Looking Forward to 2021

Practice, Products | Services | Industry News

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”I know what I have to do now, I’ve got to keep breathing because tomorrow the sun will rise. Who knows what the tide could bring?” Chuck Noland (Tom Hank’s character in Castaway)

 

I have become very attached to the above quote. This year has certainly been different on so many levels. It was easy to become overwhelmed so often and I believe many, like myself, are happy to see 2020 come to an end.

Usually, as the year comes to a close, we look back to evaluate the year as we plan for the upcoming one. But what type of goals can we set for ourselves in 2021? Setting goals is hard enough when there is not a global pandemic going on. But despite wearing our masks and continuing to practice social distancing, we still need to be positive looking forward. We should never forget to consider the ways in which we can do more to improve ourselves or our lives. We have, despite all the challenges of 2020, been given the gift of extra time.

At the best of times, it is never wise to put too much pressure on yourself when setting goals, so why start now when we are living through an unprecedented pandemic? There is still opportunity to consider tackling one or two new goals. Another thought could also be to revisit the goals originally set for 2020. It is likely they were put aside as the world changed earlier in the year. There is nothing wrong in re-evaluating your plan and updating it to use now.

As owners of a small business, because after all a practice is one, owners are in a fortunate position that people will continue to require healthcare. The pandemic has shown that healthcare offices are recession and pandemic resilient. However, as a business owner, the stress levels of owning and operating during a pandemic could never have been imagined let alone planned for.

Perhaps the goals for 2021 need to be more along the lines of small operational ones that will not only help in the immediate period of time but serve you well in the long run. There is always a tendency to make an ambitious plan. But the bigger the plan, the bigger the demands and unfortunately, the constraints of a pandemic can make it hard to keep up. Therefore, perhaps the first goal of 2021 should be to make smaller but more meaningful goals. It is so important to remember that little successes will add up to something big.

Examples of smaller goals could be to improve communication with patients, schedule more comprehensive exams, embark on social media or improve your online presence overall. The opportunity to educate patients via Zoom calls is definitely a possibility we would not have considered pre-pandemic. There is absolutely no downside in making a greater effort to reach and engage your patients. In fact, you will be creating loyal patients and increasing the value of your goodwill.

Most people know how to set goals. There is a plethora of information available. My intention is to encourage you look forward positively. Do not set goals that are beyond reach, as this is likely to cause discouragement and demotivation. Basically, you are setting yourself up for failure from the beginning. Ideally, you want to choose goals which test you and require commitment but are reachable in practice.

It is so important to remember to be patient. Begin by determining not only what the goal is but why you want it. Challenge yourself about the emotion behind the goal. Why do you want it and what will you receive when you achieve it?

I believe what will be critical in 2021 is to think about the journey in achieving the goals you set. Remember to create achievable steppingstones so that you find happiness in the now. We must find ways to still find joy and enjoy the present. Perhaps another goal for 2021 should be to accept that we do not know what the future holds but rather be curious about what it could hold. If 2020 has taught us anything it is that we must learn to adapt as we have had to face an enormous amount of uncertainty. This will help put you in a positive mindset as you undertake goal setting.

The best any of us can do going into 2021 is to simply keep going one day at a time. Accomplishing big goals is a marathon, not a sprint. If you do not achieve some of your smaller tasks or expectations, do not be discouraged, you may occasionally get derailed from your goals. Be sure to maintain a well-rounded schedule by practicing habits that will energize and sustain you. Take time to consider and strengthen your physical and mental health and keep connected with others. Staying healthy and balanced will prove invaluable in having the stamina and drive to push to achieve your goals.

Before you know it, 2021 will be here. We must all step back a moment and be grateful for the blessings we have. 2020 certainly challenged us but it also gave us the ability to bring out the best in ourselves. For the upcoming new year, let us turn our current circumstances into a strategic opportunity to position ourselves for success. Until now, goal setting was always about the future. So instead of worrying about creating the perfect five-year plan or tackling the list of things you want to accomplish by a certain age, perhaps a good place to start is to figure out what you need to create a more comfortable and enjoyable life for yourself right now.

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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Looking Forward to 2021: The Importance of Positivity

Human Resources, Managing Others

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2020 did not work out as any of us planned. So many had great expectations which quickly came to a grinding halt. The world changed and the way we do business has too. Some of the changes will even become permanent.

As difficult as this pandemic has been for people, we must continue to believe we will come through this. Because we will. Think back to when our parents and grandparents had to experience extremely challenging times like the Depression, World Wars and other tragedies. There were always celebrations once these challenges came to an end.

No one has a crystal ball. No one knows what 2021 will really look like, but we must enter with optimism and hope. People will gather again, hug again, travel again. Global economics will rebound. There is pent up demand for products and services. After all, we caught a glimpse of this when dental and optometry offices reopened after the forced closures. Many practices are seeing revenues rebound and approach pre-pandemic levels.

Positivity in life is the key to success, happiness, and a sense of fulfillment. It is difficult to have a positive attitude and positive thoughts when we look back at 2020 but as much as there was pain and suffering, there were some silver linings.

Those of us in the people business had to really work at our communication skills. You had to ensure you kept in touch with your patients—to not only educate but to be a calming voice of science-based information. Many people improved their technology skills. For those of us that consider ourselves “too old”, we embraced things liked zoom calls, webinars and Instagram. One of my favourite moments is about my 89 year old mother setting up an Instagram account. On a personal level, we valued those closest to us. Hopefully family relationships have also strengthened.

2020 has taught us that we cannot always be in control and that we must be willing to adapt. One thing we can control is our attitude and how we choose to approach life. An optimistic attitude is critical and necessary for 2021. It pushes us forward, encourages us, and helps us overcome obstacles. It inspires those around us and helps us in accomplishing dreams and goals. A positive attitude also helps with making difficult tasks easier to fulfill. A positive frame of mind increases our motivation to
succeed. It motivates us to think creatively and therefore achieve more than we ever expected.

Most importantly, a positive attitude awakens happiness within ourselves and those around us. Goodness knows, we need happiness and hope. To be very clear, we can all agree that we need more positivity, joy and happiness in 2021. Please be a beacon of hope. We will get through this pandemic if we stay positive together!

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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Managing Your Practice During The Next Wave

Practice, Resources

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Many of us believe that we are already seeing a second wave of COVID-19. We feel it is here, now that we have seen a continuous rise in cases and that we should also try to be prepared for potentially a third and fourth wave.

The COVID-19 crisis found the world unprepared, but despite this, the reaction was both rapid and responsible. Nonetheless, challenges remained – especially as practices moved from initial response to living with the pandemic longer-term. Healthcare has proven its resiliency to both recessions and now a pandemic, so now is the time to plan and not simply react. The best we can all do is take the lessons we learned from how we responded to the first wave. I am a firm believer that history truly is a great teacher. The first thing every practice owner needs to do is talk to other practice owners. Don’t use the time to complain and fear the worst but rather, ask people what they did the first time. What did they feel worked well and what would they do differently if they had to? Now is the time to do a review and see if your business plan requires a revision or modification. People will always need healthcare. That is a fact. But there is nothing stopping you from ensuring your practice operations are fine tuned in order to manage future waves.

An important measure to take is improve your communication with staff and prioritize their concerns. Despite all the protocols implemented in offices, staff are human. Many are anxious and as numbers increase, so does fear. Taking time to listen and not dismiss is critical. Addressing their concerns in an open and transparent manner will go a long way in keeping them engaged. As the owner, providing confidence and reassurance is key. Offices have gone to great lengths to ensure all the steps are in place to ensure the safety of both staff and patients within the practice. Being that calm voice in the storm is so important. Human nature is such that people will make decisions on their own, if a clear strategy is not presented for them to follow. This is where your leadership matters.

This may sound very simplistic or even obvious but ensuring that you have a proper supply of PPE, hand sanitizer, and cleaning supplies will avoid any scrambling or being caught in a rush that could result. Another tip is to continue to manage your cash flow – both in the office and at home. I sincerely do not believe a second closure of offices will occur, but from the various practice owners I’ve spoken to, those who could weather the storm the first time were people who were not overleveraged. It is easy to engage in retail therapy or home renovations (I certainly have) in lieu of not taking a formal vacation or just managing stress. Do your best to create a financial cushion. Also, one of the best things you can do to help calm yourself during times of uncertainty is to prepare regular budgets and stress-test them. This knowledge will give you better clarity and an important sense of control.

During the lockdown, I was so impressed to see practice owners take to the internet – whether it was videos, email messages or Facebook posts. Keeping patients connected is so critical. Now more than ever is the time to be an informative and calming voice to patients. Do not be afraid to invest wisely in your online presence.

If this pandemic has taught us anything, it should be that we need to prepare for future pandemics. Infectious disease experts warn that COVID-19 may not be the only global pandemic we experience in our lifetime. Some of the changes we have had to roll out may now become part of the ‘new normal,’ such as physical distancing in reception areas and PPE during patient visits. After all, it was the care of patients with HIV that led dentists to start wearing masks and gloves.

COVID-19 has taught us that even in volatile times, it is possible to manage and maintain your practice. Some have even been able to grow. While we all had to adapt on the fly earlier this year, this time around we can turn to the good habits we adopted and lessons learned during the first wave to get ourselves through the ones to come.

Keep staying safe and healthy!

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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The Importance of Self-Care for Practice Owners During a Pandemic

Human Resources

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It is amazing to reflect on how much life has changed since mid-March. We all went into 2020 with high hopes and had no inkling of the need to wear masks and social distance. We now know that these precautions are necessary to keep those around us safe.

It is difficult to constantly live within these restrictions and increased protocols. Many of us are experiencing COVID fatigue. We are stressed by not being able to enjoy simple things we took for granted. We also feel guilty because the sacrifices we are being asked to make pales in comparison to what our parents and grandparents needed to do during times of depressions and wars. We miss not having human touch—shaking a hand, giving an encouraging hug, or even worse, holding someone’s hand when they so desperately need our support.

When you are an owner, there is an added layer of complexity. Despite feeling anxious about the state of the world, you must always be positive for your patients and staff. When a patient asks how things are, you cannot tell the truth. You must put on a brave face and while it is necessary, it is also incredibly exhausting and takes a toll.

While the word “self-care” these days is associated with social media posts of face mask rituals, inspirational quotes and the like, the reality is that self-care for owners and leaders during uncertain times is so critical to our health, both physically and mentally. You can only look after your family, staff and patients if you are looking after yourself!!

Like you, I am looking for strategies to ride out the storm with my sanity in tact. We all need a plan to build and sustain our resilience.

• I focus first on being mindful of time. Time has always been a precious commodity. Since March many of us feel we are caught in a time warp or living through the plot of a sci-fi novel. We seem to be constantly putting out small fires on a regular basis and wonder at the end of the day—where did all the time go?

I challenge you to try this little exercise (it takes time but its worth it). Create a table with seven columns (one for each day of the week) and 16 rows (for each hour that you’re awake). For a week, write down what you did for each hour so you’ll have a clear idea of how you spent your time. You can make adjustments later on. Being more focussed on how you spend your time, allows you to have more control during a pandemic that doesn’t allow us to feel any control.

• It is critical to stay in touch with friends and colleagues. By now, we are all Zoomed or webinared out. I know for myself, the last thing I want to do is spend time on another call. However, many are feeling apprehensive about eating in restaurants, etc. so how are we engaging socially? It is so easy to let the absence of social physicality create self-isolation. We may see patients or clients, or chat for a few minutes to a salesperson but these encounters cannot replace the physical and one-on-one social interaction we have with our friends. A good old-fashioned phone call is a huge boost not only for the other person on the other line but for you as well.

• I recently read an article, written by leadership mentor Michael Hyatt, who suggested we identify our “Weekly Big Three”. Hyatt states the “Weekly Big Three” are your weekly achievements that will move the needle on your major life goals.

In the context of the pandemic, you identify in your working environment the three big tasks you should do for the entire week. The intention is to prevent feelings of being overwhelmed by your to-do list at your practice or office. Your weekly big three can range from learning how to use Instagram to cleaning out your email inbox. And if all you can do is a “Weekly Big One”, that is completely fine too.

• Personally the pandemic has made me stop and think about how I spend my time unrelated to business. It is easy to allow ourselves to become defined by our work but now, more than ever, developing a hobby or pursuing an activity outside of your practice or business can prove to be an excellent release of stress. There are so many facets to us and we must not feel guilty for taking time for non work-related interests. It’s absolutely fine to have unproductive hobbies or indulge in reality-based television.

• Finally, never be afraid to ask for help. Our egos and pride can unfortunately get in the way. Asking for help is one of the critical things you can do to keep yourself sane and well during these unsettling times as a practice owner.

It truly is important to look after yourself and others during this incredibly crazy time. No one really knows how long the precautions and restrictions will be in place or how long the recovery process will take. However, your practice will come through this pandemic if you look after its greatest asset—YOU. If you are proactive in looking after yourself and others, you will feel more relaxed, focused and have a renewed sense of purpose for not only surviving but managing the pandemic successfully.

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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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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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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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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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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Is This Really The Best Time To Buy A Practice?

Buying-Selling A Practice, Practice

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ABSOLUTELY!!! And here is why. If your ultimate goal is to own your own practice, then do not pass on a good office because of the times we are currently in. An economic crisis can be the best possible time to invest in yourself! As an associate, this could be the moment you buy yourself a job because no one knows what life will be like once the doors re-open.

Every recession creates opportunities. And inaction does not mean safety in uncertain times. Rather than simply hoping things will get better, you should act to improve your situation and position yourself for growth when the things recover.

If you are an associate, your income has and will be controlled by the principal you work for. If you work in an office with the principal, there is a very high chance your schedule is going to be impacted particuarly because the principal will be in the negative due to the clinic being closed. Therefore, a principal may choose to work longer hours to make up for this. You cannot blame someone for choosing to work more or take the better quality patients when they have owned the practice during this financially critical period. Is it not better to be the owner of a closed office when the doors finally open rather than an associate waiting for the return of consistent hours?

Buyers are reluctant to spend money to make acquisitions during an economic downturn. However, downturns can be an ideal time to invest in your own practice.

1) As an associate, how long will it take for you to personally return to work? How long will it take you to return to your same level of billings prior to COVID-19?
2) The country’s key lending rate has now fallen from 1.75% at the start of the month to its current rate of 0.25%. The last time the overnight rate fell so much in the span of a month was in 1992. Therefore, prime rate as of today (March 31, 2020) is 2.45% and will most likely decrease by end of year. There has never been a better time to borrow.
3) The sale will not close until the doors re-open. Again, with the closures, revenue is not lost but deferred. By default, there will be a demand for visits.
4) During this time as you prepare to take over the practice, you can engage the team to brainstorm and generate new ideas that could help you when the doors re-open. After all, the employees of an established practice are on the frontline and have a lot of insight into patient and practice needs.
5) Yes, there will be stricter protocols required for infection control. That will not change regardless if you are an owner or currently an associate.

While our situation today is different from the Market Crash of 2008, it is worth noting that Warren Buffett in a 2008 Berkshire Hathaway shareholder meeting said that the market might go up, the market might go down, the economy might fluctuate, but there will always be intelligent things to do. What an empowering message!! He went on to further say, “In the 20th Century alone, we dealt with two great wars (one of which we initially appeared to be losing); a dozen or so panics and recessions; virulent inflation that led to a 21½% prime rate in 1980; and a Great Depression of the 1930s, when unemployment ranged between 15% and 25% for many years. While COVID-19 is something we have never seen, the fact is that globally, we will overcome it just as we did these other significant crises.

Buying an office now gives you the opportunity of time. Usually, when people are purchasing an office, they do not have enough hours in the day to plan a successful transition. A personal marketing plan rarely is made, staff training to ensure the smooth transition does not happen and you as a new owner do not have the time to develop critical business skills such as financial management, effective communication. If you buy an office that does not close until the doors are to open for business again, you have the benefit of this time to make serious and achievable plans.

History has proven that during challenging times that all the great fortunes were made. The most successful self-made people did not sit home in fear because of a financial crisis.

Ultimately, during tough times, it’s important to keep a positive outlook rather than focus on a bleak picture. It takes courage to invest in times of uncertainty, but if you do it wisely, you’ll see positive results down the road. The reality is that people will still need to see their Optometrist. Healthcare has proven its ability to manage during and post financial crises.

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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