Every week our Account Executives/Recruiters speak with hundreds of practice owners. We have found that a surprisingly small percentage of business owners actually take the time and effort every year to develop a business plan, and that most of the truly successful practices we work with do have a plan in place.
A business plan consists of three parts, which I will break down into eight steps:
- A statement of what you want your practice to be in the future. (Step 1)
- An assessment of where your practice is today. (Step 2)
- A realistic breakdown of the steps you need to take in order to get from where you are to where you want to be. (Steps 3-8)
The 8 Simple Steps to Preparing your Business Plan:
- Develop a Mission/Vision Statement for your practice – Simply stated, why does your practice exist? Who do you serve? What do you offer patients that they can’t get elsewhere?
- Vision – Write out a compelling description of a future desired state of your practice. Make sure you can clearly picture what your practice will look like in the future. Think in terms of where you want to be. The purpose of the business plan is to lay out the steps between where you want to be and your current reality.
- Values – What do you stand for? What are the guiding principles by which your practice operates? Values motivate us before we achieve a goal and determine how satisfied we are once we attain it. Does your current culture support your values?
- Assess Current Reality – In a few paragraphs summarize your results for 2016. It helps to look at your monthly financials.
- Positive Effects on Growth – In which areas of your practice are you experiencing the most success? How do you optimize those to produce continued results?
- Negative Effects on Growth – In which areas of your practice are you experiencing more challenges? What do you need to change in order to obtain positive results?
- Current Office Structure – Diagram current office structure. Will your current team, with their current duties and responsibilities, help you achieve the vision for your practice?
- Understand your key metrics – What is the average per patient production for each associate in your practice?
- SWOT – Draw a box with four quadrants: Strengths, Weaknesses, Opportunities and Threats. Be honest with yourself. Give a lot of thought to each area.
- Describe what your practice will look like 5 years from now– This is the fun part. Now is the time for specifics. There are plenty of ways to grow and be successful. In fact, some practices even choose to shrink and be profitable. It is up to you.
- Will you limit your practice to a certain type of patient base?
- Will you cater to patient needs by expanding hours, days and providers in your current facility?
- Will you expand your facility to accommodate greater patient demand?
- Will you expand your presence in a market by acquiring or building new practice locations?
- How many patients will your practice see?
- What clinical services will you offer?
- Will your equipment be all state of the art?
- Will your practice thrive because of your strong engagement with and ties to the community?
- Commit to your 2017 Key Initiatives – Decide on a small, achievable set of initiatives that will help move you toward your goal. In most cases, you can’t achieve your vision in just one year, but you can take steps toward reaching it. Typically these initiatives fall into one of five categories:
- Improving office efficiency – Improving your responsiveness to current patient demand by treating more patients, maintaining or improving the quality of care with the same number of resources (team members and operatories) by eliminating inefficiencies in your current systems and processes.
- Broadening your level of services – Providing your patients with more clinical choices, which in turn improves the value and revenue from each patient visit.
- Increase Demand – Do a better job of filling your team’s schedule through advertising, referral programs or adding new/profitable plans.
- Add Capacity – Add new associates or staff to your practice to satisfy demand. (Don’t take this step until you have the demand and efficiencies to add someone profitably).
- Buy or create a new patient base – Serve a new patient pool by buying or starting a new practice.
- Break your goals up into Bite-sized Chunks – Figure out what your 2017 objectives mean to each team member. It is critical that you involve your team. If you involve them in the process it will improve their buy-in. They will probably be the source of many of your best ideas. Define what the plan means to each team member:
- Does it mean they need more training in a certain area?
- Does it mean they need to schedule more efficiently?
- Does it mean they need to improve recall?
- Install Guardrails – Make sure each member knows their daily, weekly and monthly goals.
- This is as simple as taking your annual goals and dividing them by the number of working days in a year.
- The key to exceeding your goals every year is to exceed them every day.
- Make it a routine to share results on a daily and weekly basis.
- Reinforce how important each team member’s part is to the practice’s overall success.
- Celebrate the daily and weekly victories.
- Create a Budget – This is the tough part. Budgeting is the toughest part of the process because it makes you say no to things you really want to do. Tips:
- Zero based budget – Challenge each cost. Don’t assume you have to pay for something this year, just because you did it last year.
- Never count on revenue from a new hire or new initiative until it becomes a reality. Most practices count on a very rosy picture when a new team member joins their practice.
- Fund new initiatives off the excess. Don’t buy something or hire someone unless you can survive a failure. Don’t borrow money and risk your practice because you think a new Associate, new location, new piece of equipment will produce. Wait until you can afford a failure. “Plan for the worst, Hope for the best”.
- Print and Bind the Plan – Commit to the plan. Don’t just put it in your desk drawer.
- Carry it with you.
- Check progress weekly.
- Refer to it in team meetings.
- If you are falling behind, be aware of what needs to change and take action immediately.
- Celebrate the little victories and share them with your team.
- Bankers and perspective team members will LOVE you when you show them your plan.
You can do this! In fact, you should do it right now! You don’t need an MBA, CPA or Law degree to write a business plan for your practice. Certainly, advice from a trained professional is helpful, but in most cases, you have what it takes to get the basics down on paper.
You are the leader of your practice. If you are serious about growing your practice, offering new services, expanding your reach, serving new patients, and preparing for a comfortable retirement, you need to write a Business Plan. If you haven’t done so already, start your plan today!
Written by Mark Kennedy, Owner/Managing Director of Executive Talent Search (ETS Dental, ETS Vision, ETS Tech-Ops). To find out more, contact your regional recruiter today!
Oct 7, 2021
Bad reviews are a part of the landscape in a digitally connected world, but they can hurt your practice and your ability to attract employees. What do you do if you get a bad ...
Jun 9, 2021
Being a mentor has many rewards, but like every other skill you have achieved in your career, it requires attention, the ability to adapt to a situation, and a willingness...
Jul 1, 2020
Most practices have some type of contract with associates. For the most part, these agreements work well. But sooner or later, you are likely to have an employee seek to leave...
Jun 11, 2020
The coronavirus pandemic has had an enormous impact on the eye care industry. We saw one of the biggest unemployment rates of any industry with thousands of jobs lost, but now...
Mar 4, 2020
As a practice owner, you're probably already aware that you can save yourself a lot of headaches if you can retain good employees instead of retraining new ones. While employe...
Feb 19, 2020
Unless your practice exists in a place where there is virtually no competition, you probably already understand the importance of branding in terms of attracting new patients....
Nov 27, 2019
How times have changed. For some professional organizations, the big holiday party no longer has the same appeal as it did in years past. An open bar can present more legal an...
Jun 11, 2019
Studies have demonstrated that office culture and the relationships developed between staff play a major role in job satisfaction and employee stability. In an interview with ...
May 21, 2019
We’ve told you how best to prepare for the sale of your practice and hope that the processes we’ve outlined have helped you prepare. Now it’s time to sell and ETS Vision...
Apr 9, 2019
When you know, you know. If you have been a practice owner for a significant period of time, you may have felt that proverbial itch to sell the practice, retire and pursue ot...