Tag: ROI

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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Protect Yourself from Spam and Scammers

Finance|Wealth, Resources

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Spammers and scammers are attacking everybody. Typically, I receive up to 10 scam/spam emails a day, and fortunately, my office uses a defense system that captures about 99% of them. But recently, one slipped through my inbox.

A spammer had perfectly mimicked my email identity and my email signature. Emails came to my office staff using my exact email address. There were a few clues that made us realize later that it was a scam; however, at the time, I was away and the scammers told my staff that I demanded a payment of tens of thousands of dollars be made to one of our regular suppliers.

The spammer had duplicated an invoice that one of our suppliers had sent to us by email several months earlier. The invoice appeared authentic to my staff members. They proceeded to process the cheque. The next day, I returned from my out-of-town trip and was asked, “Tim, why was it so urgent that we had to pay that supplier bill yesterday?” I responded, “I have no idea what you’re talking about.”

The staff member showed me the emails that had been sent demanding a payment be made the same day. I looked at the emails, which appeared legitimate, but noticed a couple of words that I don’t use. One was “muchly,” as in, “muchly appreciated.” I have never used that word. It is grammatically incorrect. That was one of the indicators that the emails were part of a scam.Fortunately, we were able to stop the cheque from being deposited, and then we made
additional precautions and updated our internal security measures to prevent any such similar scams from happening again.

This was very close to being a major financial setback. Three of my staff members actually approved this cheque being deposited. Shortly after, I received another scammer email from one of my clients that appeared legitimate. His actual signature, his actual cell phone number, his actual website and some of the awards he has won were all contained in the email. The message said that he was away and wanted to get a Google gift card for his nephew and asked if I could help out by buying the gift card and emailing it somewhere for him to access.

Obviously, it was a scam and I laughed and called my client to tell him that he had been scammed. He laughed as well and said “I have to thank the scammers because I’m getting calls from people I haven’t heard from in a long time. I’m reconnecting with old friends and buddies and this is a great thing.”

Ironically, in this case, the scammers and spammers unwittingly generated a little bit of humour. It’s easy to laugh off when people can easily recognize these as scams perpetrated by amateurs and hacks using blind and rotating fraudulent email accounts to extract money illegally. But sadly, some scams are effective and they often prey on senior citizens. I have advised my father and other senior members of our family to be careful about telephone scams by people pretending to be nieces and nephews on holiday pleading for money from an older family member.

Security measures can be implemented by you, the company host of your website domain or your email provider. We can set higher security measures with our email, but of most concern is a junior staff member who might be duped and unable to recognize a sophisticated scam for what it is. This is especially true of a scam directive that has been (supposedly) dictated by the employer (read: boss) or other high ranking senior officials in the company. We need more scam (and spam) education, and we should all practice safe email!

TIMOTHY BROWN

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

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Live Events: Buying an Optometry Practice

Buying-Selling A Practice, Practice, Resources, Webinar

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Join ROI Corporation for a lively discussion about the factors you need to consider when buying your own practice.

Topics that will be discussed include:

  • Which factors affect the value of the practice
  • What financing options are available
  • Understanding key numbers
  • How to choose the right practice for you

DATES:
November 7: Kitchener-Waterloo Deer Ridge Golf Club
November 14: East Toronto Delta Toronto East Hotel
November 21: Mississauga ROI North, Streetsville

All sessions will be from 6:00-8:30pm.
Light fare will be served.

RSVP: sales@roicorp.com or (905) 278-4145 Ext. 226

 

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5 Optical Dispensary Upgrades – and the ROI from Them

Office Design & Renovation, Practice, The Patient Journey

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Revamping your optical can create an environment that makes patients want to shop and make a purchase, increasing your revenues.

Last year, my four-OD practice, Wichita Optometry, undertook a revamp of our optical dispensary.

The day I joined Wichita Optometry, September 1, 2010, I thought that the office needed a facelift. The details of how that was going to happen began to evolve six years later in September of 2016. The office felt dated and dingy with golden oak and faux, sponge-painted walls. I wanted patients to walk through the door and experience a bright, cheery and modern atmosphere.

Taking on an optical remodel can seem daunting in the beginning. You need to figure out a budget, establish the look you are going for, find contractors and put in the time to see that everything gets done as you had envisioned.

The remodeled optical in Dr. Blasi’s practice. Dr. Blasi says the revamp required careful planning and budgeting, but was well worth the time and money. The practice expects strengthened optical sales, and an enhanced patient experience, as a result.

Set Your Budget
The initial budget was $40,000, and we ended up at $45,214. I feel like we have a totally new office, and it was worth every penny!

Identify Key Needed Changes
The first needed office update was new paint for the walls and trim. We have always been attentive about keeping the office clean, but somehow we had overlooked something as simple, yet powerful, as a fresh coat of paint. I went to Sherwin Williams to pick out the color scheme.

We decided on a gray color scheme and white trim and doors. This made a huge difference. We painted the whole office for $15,000. That also included scraping and repainting the popcorn ceilings.

The second thing that needed to go was all the old, clunky, yellow oak optical displays. This made the office look dated and cluttered. A great deal of time went into deciding what the new displays would look like, and who we were going to purchase the displays from. We decided on a streamlined, modern look, and picked LED-lit acrylic displays with wood-backing from Frame Displays. The LED back-lighting, along with the LED track lighting, really helps show off the frames. The acrylic boards allowed for the dispensary to be more open. The total cost for all the new displays, and LED lighting for those displays, was $15,900.

We replaced our old tile in the entry way and patient’s bathroom with luxury vinyl flooring, which is a great material because it is easy to clean, has no grout, is low noise and does not become slick when wet. Since we replaced the carpet a couple years ago, we left it. Material and labor costs were a little over $2,000 to redo the entry way and bathroom flooring.

New reception desks are expensive. After looking into different options, we decided to replace our formica with a metal-looking formica to give it an updated look. We also had a company that remodels cabinets come out and paint/glaze all the yellow oak cabinets. This turned out looking fantastic! The total cost to do all of this was $7,000.

New lighting and decorations, such as art prints for the walls, or sconces, accounted for the rest of the budget.

Find a Contractor: Solicit More than One Bid
Most of the contractors that we used we either knew from previous work they did for our offices, or were recommended to us by people we knew. This was one of the most challenging aspects of the remodel. Just because one person recommends a contractor does not mean that they are up to another person’s standards. We always had at least two contractors bid the job before we decided who we would hire.

Try to Schedule Construction for Off Days
Almost all of the work was done on the weekends, when we are closed. The benefit of this was it did not disrupt patient flow and we could keep the office open the whole time. We made sure to post signs on the doors that said “Please excuse our mess.” However, it required a significant amount of time for the practice owners at the office during the weekends for 10 weeks.

Measure to Assess Effectiveness of Renovation
Before the remodel we were able to display close to 700 frames. Currently, we display around 900 frames. This has allowed us to add more frame lines and expand our sunwear selection.

Frame turnover is the main metric we will track this year to determine whether the optical revamp paid off. We typically turnover frames 3-4 times the total number of stocked frames per year. In addition, our EHR allows breakdown of frame sales, which we will compare year-to-year.

The perception which staff and patients have of the office also is part of the payoff. Perception is reality, and when patients see you investing in an updated look, they are more likely to feel they had a better, more fun experience.

Rightly or wrongly, competency is often equated with appearance. The American way is that if you do not upgrade, and have the newest technology, or newest look, then you are outdated and “not keeping up.” That feeling of not being able to keep up then trickles down to all aspects of the office. We hope our opticians will become more energized and excited about showing off the end result of the optical revamp and our new frame lines.

I can say at the end of the process, the revamp was a lot of hard work, but the end result has been great. We have positive feedback from staff and patients, and we feel like there has been a renewed sense of excitement throughout the office.

ASHLEY BLASI, OD

is an associate with Wichita Optometry, P. A. in Wichita, Kan. To contact her: ablasi3313@gmail.com

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Marketing by the Numbers: Measure Often for Success

Advertising & Promotion, Finance|Wealth, Marketing, Resources

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Many practices have marketing plans, but too few regularly measure the performance of those plans to see how effective they are. Establishing benchmarks and taking regular performance measurements can maximize your ROI (return on investment). Without such measurements–and without adjustments to fine tune the plan–you’re just conducting a guessing game. The key is to measure what works and what doesn’t, then you can home in on the right marketing formula to increase revenues and profits.

IDENTIFY MARKETING OPTIONS
Calculate and Track Marketing Campaigns
to Prioritize Marketing Spend1. Calculate cost of campaign.2. Calculate expected return on investment.3. Track activity related to marketing activity to determine how much money is coming in. Here is a formula to use to help determine ROI:Cost of marketing event or campaign X .33 = how much money you need to generate from the event or campaign just to break even.Example: Trunk show that costs $2,000 to market and organizeAssuming an average profit margin of 30 percent and a campaign, then you’ll need to generate at least $6,000 to pay for the campaign–just to break even: $2000/.33 = $6,000. Therefore, the trunk show used here as an example would need to generate at least $6,000 in revenues to yield $2,000 in profits–the amount you invested in the event. Otherwise, it is not worth to investing in. Of course, you want to make a profit and pay for the campaign so in this case you might want to generate $8,000 from this trunk show–yielding $2,400 in profit or $400 more than you invested in the event.4. Prioritize which marketing campaigns are worth investing in long-term based on which generated a return on investment.

Patient communications.Use e-mail, Facebook and other social media to deliver your messages.

Events. Host regular open houses/ frame trunk shows. Advertise in advance.

News event. Leverage a news event to contact your patients. Announce the addition of new equipment, products, services or staff.

Newsletter. Do monthly e-mail newsletters. Newsletters should be educational. Include an action that encourages patients to come in or call your office.

Business cards. Give your staff their own business cards with their name on it to hand out. This encourages them to meet people in the area.

Unique feature. Set yourself apart by offering a unique customer value added feature that also serves as a marketing piece. For example, some doctors offer chocolate bars with their name and logo.

MEASURE RESULTS BY MONTH
Actual
Minimum (promise)
Stretch Goal
Marketing costs
Number of leads generated
Sales (gross collections)

Take into Account Total Costs
The marketing costs measure only the direct costs related to the campaign: printing, food and entertainment. They do not include labor, rent or other general overhead costs. We also exclude cost of goods, and this is a function of the total gross sales. However, the sale price offer or promotion should be higher than your cost of goods. Also, any discounts on sales items could affect the profit and change your profit margins (break-even amount). Tip: Package materials in your promotion so the combined profit is still maintained. For example, discount frames only if combined with high-index lenses or a pair of sunglasses.

Evaluate the campaign every three months if a recurring event.
If the campaign spans a longer time period, measure results on a weekly basis.

Constantly evaluating the success of marketing via thorough measurement makes it more likely these efforts will result in more patients in your exam chair.

Related ROB Articles

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2011 a Boom Year in Practice Sales?

How to Compute Net Cash Flow

ALISSA WALD, OD

Alissa Wald, OD, and her husband, Scott Daniels, own Practice Concepts, a firm that provides practice sales and coaching services. To contact them: 877-778-2020 or scott@practiceconcepts.com.

SCOTT DANIELS

Alissa Wald, OD, and her husband, Scott Daniels, own Practice Concepts, a firm that provides practice sales and coaching services. scott@practiceconcepts.com.

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