Finances

Five Steps to Making Better Business Decisions

By Jennifer Jabaley, OD

August 24, 2016

One of the most daunting parts of running a practice is making a difficult decision. Decisions are influenced by many things, including emotions, experiences, timing, risks and rewards. A myriad of factors must be taken into account before reaching a conclusion. However, applying effective strategies in making difficult decisions, can provide good outcomes and give you peace of mind.

Understand Your Options

To make an educated decision, research all options. Look at multiple sources of information. For example, before dropping an insurance plan, calculate the percentage of patients in your office on that plan. Also, compute income per patient. If a lot of patients have that plan, but profitability per patient is low, cut the plan.
Poll your staff for feedback on their opinion. Is dealing with that insurance plan tedious? Does that segment of patients from that insurance plan tend to take up more staff time? More chair time? More information equals an easier choice.

Set a Goal

When overwhelmed with making a career or business decision, think of your own personal goals. Rank your priorities from highest to lowest. Goals can change and flux as our financial and personal situations change. At the start of one’s career, financial success may top the list. Eliminating student loans, new mortgages, credit card debt and saving for retirement may take priority. But as we settle down and have a family, the list may shift to include family time, good health or contribution to community. Assess your list of goals as they reflect your priorities and then decide which option best serves your needs.
A new grad with student loans may choose to work weekends. A new practice owner may also place priority on accessibility to new patients. An OD with a new baby may opt out of weekend hours to spend time with their newborn. The best choice will be different based on each individual’s current situation.
If you can identify your ultimate goal for this moment in time, it will be easier to assess which decision aligns with your priorities.

Weigh the Opportunity Cost

Opportunity cost is defined by Business News Daily as “loss of potential gain from other alternatives when one alternative is chosen.” In other words, by choosing one option, what you might lose by not picking the other option. For example, if choosing to cut an insurance plan, you may sacrifice a full schedule for a lighter volume of patients. Hopefully you will be filling your book with a higher profitable patient population. But to some, less volume in the waiting room, less cars in the parking lot, might give a perception of a less successful practice. Is that perception worth the decision to cut the plan and target more profitable patients? That is the opportunity cost.

Give the Decision the Weight it Deserves

Recognize nothing is un-fixable. Don’t make tough decisions harder than they have to be. With most decisions we aren’t doomed to live out our choices for the rest of our lives. If we are unhappy with the results, almost everything in life is reversible. At a recent staff meeting, we discussed moving from salaries to a time clock. Some of the staff looked panicked. My husband just shrugged and said, “If we don’t like it, we’ll go back to the way we did it before.”

Set a Time Limit

If decisions linger for weeks, months, or even years, you are most definitely stalling the progress of your practice or your career. Recognize that there may be no right or wrong decision. Sometimes it’s simply a choice, or a preference, and waiting will not bring clarity.
President Theodore Roosevelt said, “In any moment of decision, the best you can do is the right thing, the next best thing is the wrong thing and the worst you can do is nothing.” The answer may not always be clear, but the best antidote to confusion and feeling overwhelmed is forward momentum. Gather information, prioritize and decide.

Work Saturday? How We Made a Tough Decision.

Back when my husband took over his father’s practice, one of the very first business decisions he encountered was whether to continue to work on Saturdays. We were a young couple. We worked hard during the week and wanted to relax on the weekends. We had season tickets for college football games. But his father warned us that Saturdays were always full and the practice would suffer. We were paralyzed with fear that a wrong decision would negatively impact the future of our livelihood.
After careful thought, we decided to cut Saturday hours. But as a compromise, we make our cell phone numbers available to our patients so we are always available in cases of emergencies. We have both been called in on a weekend for emergency cases, but for us, it was a fair trade off to routinely have our weekends free. We’ve never heard complaints from patients, nor have we suffered a financial dip. And we sure do love attending those college football games.

What are the hardest business decisions you’ve had to make in your career? Were you happy with the outcome of most of those decisions? What tips can you pass along to other ODs struggling with challenging decisions?


Jennifer Jabaley, OD
, is a partner with Jabaley Eye Care in Blue Ridge, Ga. Contact: jabaleyjennifer@yahoo.com

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