Finances

Eight Steps to Successfully Start a Practice Cold

By Maria Higgins, OD

Sept. 21, 2016

Starting a practice cold is an exciting adventure–you finally get to build a practice from the ground up, following no one’s vision, but your own. At the same time, starting a new practice comes with major challenges, including financial hurdles and the challenge of organizing and promoting the opening of the new office.
Here are the key steps that enabled me to open a practice cold five years ago. After selling a practice I owned for 10 years in Pittsburgh, I started Unique Optique in the vibrant downtown of Frederick, Md. Starting that practice cold was one of the most gratifying experiences of my life.

Identify Your Vision

I wanted to create an extremely unusual practice. I had tried to make the previous practice I owned into a funkier office, one that would be more creative and fashion-forward in style, but that practice’s patient base would only tolerate it changing slightly. I believed a practice had to be started from scratch to have the unique personality that I wanted it to have.

Set Your Time Table

It took me six months, from December 2010 to May 2011, to open my new practice. I sold the Pittsburgh practice at the end of 2010, worked the transition for two months, moved to Maryland at the end of February, and opened Unique Optique on May 5, 2011.

The Pittsburgh practice sold in one month from being contacted by the buyers to the closing. I worked there to transition for two months. Then I had three months off to do nothing but plan for the new practice, Unique Optique. If you are employed, I think it is best to be honest with the owner of the practice about when you intend to leave, but in some situations, that may cost you your job before you are ready. If you are the seller, you can have your preferences negotiated and built into your contract.

Find Your Seed Money

I sold my practice in Pittsburgh (which had been established for 50 years when I bought it), and used the proceeds from that to start Unique Optique. Overall, it was about $200,000-$250,000 to start the practice. In my case, I did not get a loan.

My budget:
Real estate: Varies widely depending on your location. My rent was $2,600 a month for 1,500 square feet.

Equipment: Again varies widely, depending on what you want. I got a new, fully automated lane that talked with the pre-testing room, and it cost me about $80,000.

Staffing: I started with one staff person, as an optician. Depending on your area’s employment market, you could pay from $10 to $25 an hour. I eventually had an optician/office manager, as well.

Insurance, legal: My business insurance was $2,000 a year.

Anne et Valentin eyewear on display in Dr. Higgins’ former practice, Unique Optique. Dr. Higgins says starting Unique Optique cold gave her the freedom to make unorthodox choices like filling her dispensary with only independent-brand frames. She had tried making big changes at a previous practice, and found the patient base unwilling to accept the new direction. Starting a practice cold meant she could court the type of patient base that would allow her to build the practice of her dreams.

Determine a Location & Name

Once you’ve calculated that you have enough money available, you need to decide on a location, including purchasing an office. Then you need to select a name for the new practice. Registering the business and the name comes next. Make sure the name is not already being used in the state you choose. Then you need to register the business in that state and get a lawyer to compose Articles of Incorporation.

Plan to Optimize Advantages & Confront Challenges

Advantages: Everything is new. You have control over everything. You learn everything from the ground up. You get to choose everything exactly as you want it.

Disadvantages: You have to buy everything. You have to research everything. You need to learn more than you do when buying an established practice. You aren’t just the doctor, you need to have expansive information from researching WiFi speeds, to the best toilet paper, to how to set up your EHR, to which coffee you want to serve and how to get an insurance clearing house.

When a practice is established, these decisions are often already in place, especially the larger decisions, such as EHR and equipment. In a new practice, you need to research everything. The practice I bought in Pittsburgh had been functioning extremely well for 50 years; everything was already in place.

Determine if You Need Help

As I began planning my transition between practices, I realized I could use expert help, so I hired the consultants at The Williams Group. They helped with the selling of the old practice and the set up of the new office. It was the best money I ever spent. I had also used their consultants when I bought my first practice in Pittsburgh, for which they taught me basic business practices, profit-and-loss statements, marketing analysis, business plan writing and key performance indicators. The second time I hired them, for Unique Optique, it was more specific to selling and starting a business.

My intuition was my best guidance. I tried to stop and feel if a decision felt right to me. Having an expert in the optometric field to discuss ideas, and to help me improve on my ideas, was important to my success. I knew in my gut that I wanted to carry only independent frames, and accept very few insurance plans. The Williams Group was able to help give me guidance and statistics in these areas.

Before/work-in-progress: Dr. Higgins’ Unique Optique office space in the process of renovation. The goal was to create a stylish, fun atmosphere for forward-thinking patients.

After: A practical, yet bright and multi-colored atmosphere, was created, designed for a smooth patient flow and to keep patients visually stimulated.

Take Care of Legal Needs of New Practice

If you’re opening your new practice in a different state from the one in which you have been practicing, you need to transfer your optometric license. That process could take years depending on if you have to retake certain boards.

I gave up my Pennsylvania license and transferred it to Maryland. If you want more than one state optometric license, then you would establish, or gain, the license in the new state.

You need to apply for the insurance panels with which you want to participate. This also takes a lot of time, sometimes months. In addition, you need to get your own business/malpractice insurances lined up.

Costs to complete all these legal requirements vary widely, from CE requirements to license transfers to lawyers’ fees to the time factor. Try to tackle each task with patience. Do things thoroughly and correctly the first time. In the end, it will cost you less than rushing and making mistakes that could damage your ability to practice.

Market Your New Practice

Facebook, Facebook, Facebook. Facebook Ads are the best marketing you can do, and reaches the most people for the least amount of money. After Facebook, Twitter, Linked In and Google + reach the most amount of people.

I joined local organizations that interested me and targeted the downtown community of my new hometown. In the beginning, I also placed ads in the local magazines and newspapers. Of all the marketing, social media worked the best.

In addition, I partnered with other businesses to help get the word out. The ROI for the magazines and newspapers was not worth it. I got more patients by sponsoring the local roller derby team. I joined different organizations that occasionally featured articles on me. I nominated Unique Optique for anything I could–the Business Recycling Award, the Best Place to Work award, etc. We won a lot, but then I also applied a lot.

Maria Higgins, OD, is current owner of The Unique Technique. She formerly owned The Unique Optique in Frederick, Md. To contact her: info@the-unique-technique.com.

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