Plan your dive and dive your plan. It’s a phrase I said to hundreds of divers when I was a scuba instructor. In addition to adding a layer of safety (if anything seems out of the ordinary, we’d go looking for you—and we’ll know where to look), a plan allows for a more enjoyable dive. To develop a plan, however, you must first do some research. This doesn’t require a degree in oceanography; rather, all you need is to ask the divemaster and boat captain a few questions, such as, Where is the best spot on this reef to see big fish and how are the currents likely to act during our 3 p.m. dive? Based on this “research,” the plan could simply be to jump off the back of the boat and meet directly underneath on the ocean floor for a safety check, after which the group will swim east for five minutes, then spend 20 minutes at 40 feet before swimming back to the boat for five minutes and resurfacing.
Practice Makes Perfect
So how does this relate to us as eye care practitioners? Most banks require new practices, whether they are being built from the ground-up or incorporated as part of an existing practice, to have a business plan. Just like having a plan when scuba diving, having a sense of where you’d like to go and knowing when and how you’ll get there ensures you will have a safer (i.e., cost-effective), more enjoyable journey overall.
But, what about having a business plan in place for an established practice? This is less common. Many practitioners have goals (i.e., “increase net profits next year” or “hire a new associate”) but rarely have a specific business plan in place to achieve these goals. And without a definite plan, they run the risk of getting eaten by “sharks”—either online or big box competitors, or changing insurance company and governmental regulations. All of these can affect even the healthiest of practices.
The idea of writing a business plan may seem daunting at first, but for established practices it’s actually quite easy with the help of online templates or software. Assuming your goal is to increase revenue, begin by committing to a number and a timeline. For example, your practice currently grosses $1.4 million and will gross $2.1 million in three years—a consistent 15% increase for three years that is lofty but certainly attainable. Next, record high-level ways you will achieve that growth, such as increasing second pair eyeglass sales from 7% to 12%, or increasing the percentage of contact lens patients in your practice from 22% to 30%. Note, adding new staff members to handle this influx should also be part of your plan.
With these high-level items in place, it’s time to rely on historical data and add the so-called real meat to your plan. With your profit and loss statements and production/sales reports in front of you, ensure that the achievement of the above items will help you reach your goal of a 15% increase in three years. If so, now you have to evaluate the expense side of things.
With your profit and loss statement in hand, set goals and plan for ways to keep costs in line. For example, the new staff members have to be paid—but where does that money come from? How about from the new revenue your other initiatives generate? With these costs outlined on your plan, you now have a budget for the next few years.
Finally, be sure to address the same issues new practices have in their plans with each item above. This includes factors like competitive external threats and how you’ll address them as well as future opportunities and competitive advantages that you’ll capitalize on and leverage. And of course, most importantly, once your plan is done, share it with your team and use it. The document you’ve created isn’t simply words on a page. Make future decisions and take steps that are based on your plan, and you will more than likely see the benefits play out in your practice. And don’t forget—enjoy the scenery on your journey!