By Carla Gasparini, OD
Nov. 28, 2018
When you envision your new practice, you may first imagine how you will improve patients’ lives, and build a flourishing business that you will eventually retire on. But before those things can happen, you need a business plan. Here’s how I formulated a business plan for my practice. In my experience, working from a business plan helps to let you know if you are running a profitable practice or not–and it defines where you are going.
I have been practicing for 13 years, and in that time, have created two business plans, for two different Walmart subleases. The points that need to be covered in corporate sublease business plans are mostly the same points, and beyond, what you need to cover when creating a business plan for an independent practice housed outside a corporate location.
A business plan is a formal, introspective blueprint that assists you in developing a successful business. Consider it as a plan of action that you set in motion to drive people into your place of business. It helps formulate your business idea on paper and provides you and others, such as banks, credit unions and corporations you might want a sublease from, with the strengths and weaknesses you are planning to address and optimize, and how you plan to do that.
Create the Executive Summary
A business plan must begin with an executive summary. This provides an overview of your company to be read by any other business that you need backing from, whether it’s a bank you want a loan from, or a corporation you want to give you a sublease. It must be clear and concise. For instance, you must be able to describe your target market, do a thorough industry and risk analysis, and present a marketing plan that takes an account of your competitive advantages and disadvantages. Your company motto and philosophy will need to be well thought out and evident throughout your business plan.
I started by taking a workshop about writing a business plan held at a local SCORE office, an organization with offices throughout the U.S. that teams volunteer business people with small business owners. Their help was invaluable–and free of charge!
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In addition, I researched and read business plans in other service industries, so I would have a good mix of examples to use as I created my own plan, and I went to an in-person workshop sponsored by Google that taught business owners about how to use its AdWords paid search engine optimizing, and how it could fit into a business’s overall marketing plan.
In a corporate environment, there are fewer start-up costs, so my business plan had income projections based on past Walmart locations. My start-up costs were minimal (less than $5,000), but I spent significant time researching how I would market myself in the community.
I needed enough money to cover my fixed costs such as rent, phone/internet and a computer/printer. Employee salary costs were left variable in the business plan, as were my office supplies. Keeping a positive cash flow is one of the hardest things to do, especially in a business just starting out. Therefore, I made a monthly budget that helped me keep my expenditures in check.
Identify Specific Financial Goals, Years 1-3
The business plan should be individualized to meet specific financial goals for years 1-3. That means, for instance, that you want to show in year one the major pieces of instrumentation you will need, and exactly how long it will take you to recoup your investment on each of those instruments. It also should show how much you plan to spend on staff costs, and how you plan to expand your staff as the number of new patients grows. You want to show your growth projections, in other words, and then the corresponding investment you plan to make to meet that growth. For items, such as furnishing and equipment, that you need simply to get started, you want to show how long it will take to grow enough to recoup the money you spent.
Do You Need a Financial Advisor?
I felt the need for a financial advisor, or accountant, was minimal in my case because I was not looking for a business loan from a bank or credit union to get started. However, if you are an independent practice outside of a corporate sublease, the help of an accountant or financial advisor is crucial to leverage the risk to your finances. Taking out a business loan for a build-out is an endeavor that an accountant should be a part of.
Make the Plan Flexible to Accommodate Unforeseen Needs
Your business plan should be created as a document that you know in advance will need to be tweaked as new needs arise. You can never predict exactly what the future has in store for you, but you can mitigate the risks by analyzing your strategic position, so predictions can be on target. Your core motto and company description are a mainstay. Everything else can change.
Market competition changes every year, so your business plan is a guide to weather the onslaughts you will face. For example, my Walmart-affiliated practice was in a brand-new location, so I had to predict how many patients were going to be drawn to me via print advertising, word of mouth and by other forms of marketing.
I used population data for surrounding zip codes, and the number of existing eyecare professionals, to aid me in those projections. Foot traffic in larger, more established Walmarts are tracked by division and regional managers, so the approximate data is available through the Vision Center Management.
You could do something similar for a practice in a non-corporate-located practice. You could visit your Chamber of Commerce to get statistics, and other information, about new businesses located near where your new office will be based. You also can make projections after consulting with other small business owners in your area, who are not competitors of yours, but in comparable businesses, like nearby dentists or other health-care practitioners like chiropractors, or even veterinarians.
I spoke to other Walmart-affiliated doctors to ask them questions about retaining patients, and marketing within their practices.
Stand Out from the Crowd
In order to compute profitability, you must project your major costs and how many patients you will need over a time period to cover those costs. You also must differentiate your practice from other similar nearby practices to draw new patients.
To accord to achieve the latter, take a look at all the nearest independent eyecare offices to your new office. Then, think about what you do or could offer that they don’t offer. You might notice that none of them have a good selection of independent frame brands, or that most of them don’t offer advanced medical eyecare screening technology. You may notice points related to customer service. You could even do eyecare “secret shopping,” and pretend to be browsing the opticals of those nearby offices. Note how attentive the staff is, and how your new office could do even better in making newcomers to the office feel welcome, and how the look and accessibility of your new optical could differ.
When you approach a group of business people looking to back your new office, whether it’s a corporate board, such as you would communicate with for a sublease, or a bank or credit union, you’re going to want to talk about how your office will fulfill an unmet need in your community. You want to show that you are thinking about how your practice will show new patients that your office is the best place to come for eyecare.